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ServiceMaster Global Holdings, Inc.

Project Number: 20160601
Project Type: Expansion
Parcel ID:
County Commission District: 08 | City Council District: 06

Summary

ServiceMaster Global Holdings, Inc. (“Applicant”) is seeking a personal property Expansion PILOT and a $2.3 million EDGE Cost Reimbursement Grant (“EDGE Grant”) to retain 965 employees in the City of Memphis and relocate/consolidate its corporate headquarters at the vacant 315,450 sq. ft. former Peabody Place retail/entertainment facility located at 150 Peabody Place, Memphis, TN.

In addition, EDGE will act as a conduit for the $5.5 million Tennessee FastTrack Economic Development Grant awarded the project.

The retained employees will include the Executive Leadership Team and other headquarters staff. The average base salary for the 965 Retained Jobs is $95,741 excluding benefits.

Total project investment is $36 million, including $26.7 million in real property improvements and $9.3 million in personal property. In addition to their corporate offices, Applicant will create a state-of-the-art Information Technology Innovation Center at their new location. EDGE, the State of Tennessee, the Center City Development Corporation, the Center City Revenue Finance Corporation, the Downtown Parking Authority, and the Tennessee Valley Authority are providing Incentives and assistance for the project.

Established in 1929, ServiceMaster includes such well-known brands as Terminix, Merry Maid, and American Home Shield and is traded on the New York Stock Exchange. The Applicant’s 2015 Annual Report shows $2.59 billion in revenue and 13,000 total employees.

In October 2006 the Industrial Development Board of Memphis and Shelby County (“IDB”) approved a PILOT to encourage Applicant to relocate their corporate headquarters from Illinois to Memphis. The PILOT closing was delayed for three years. During that period the Applicant was acquired by a private equity firm. In December 2009 the IDB approved a 10-year real and personal property PILOTs to encourage Applicant to lease space valued at $17 million in Ridgeway Center, create 116 net new jobs, and invest $12 million. The Applicant currently occupies a combined 287,057 sq. ft. at 855, 860 and 889 Ridgeway Boulevard. PILOTs on those properties closed effective August 1, 2010 and terminate on August 1, 2020. The Applicant has met or exceeded its commitments for jobs, wages and investment.

The IDB real property PILOT will terminate upon the earlier of: (1) the cessation of the Applicant’s operations in 50 percent or more of its space on Ridgeway Boulevard; or (2) the Applicant begins receiving real property PILOT benefits through the Center City Revenue Finance Corporation.

Staff projects $76,575,081 in total local tax revenues will be received during the PILOT term. The personal property PILOT will provide an estimated $3,143,831 of benefit to the Applicant.

In addition, staff proposes an EDGE Grant in the amount of $2,300,000 to partially offset the costs of construction, renovation, tenant improvements, the IT Innovation Center, and new furniture, fixtures and equipment at the downtown headquarters location. EDGE will reimburse the Applicant for documented expenditures. Other terms and conditions, including performance monitoring and compliance, will mirror those of the TN FastTrack Economic Development Grant. Additionally, EDGE will act as a conduit for the TN FastTrack Grant at no cost to the Applicant.

PILOT Term:

15 years

Projected New Jobs:

Not applicable

Projected Retained Jobs:

965

Total Jobs:

965

Projected Average Payroll of New Jobs:

Not applicable

Projected Average Payroll of Retained Jobs:

$95,741

Annual New Direct/Indirect Payroll:

Not applicable

Annual Retained Direct/Indirect Payroll:

$92,390,065

Total Capital Investment:

$36,000,000
Real Property Investment:
$26,700,000

Personal Property Investment:
$9,300,000

Community Reinvestment Credit (CRC):
Not applicable

Capital Investment not in PILOT:
Not applicable

Projected Tax Revenue:

$76,575,081

Projected Taxes Abated:

$843,831
City: $369,242 (25%)
County: $474,589 (25%)

Benefit/Cost Ratio:

24.36

Projected MWBE/LOSB Spending:

$20,866,875

Incentive Provided:

$3,143,831

Compliance Information

Not applicable

Approved

6/15/2016

Ramp up Period

4 years

Closing

Not applicable

Effective

Not applicable

Lease Begins

Not applicable

Lease Expires

Not applicable

Amended

Not applicable

Property Details

Lease Began

Not applicable

Lease Expires

Not applicable

ServiceMaster Global Holdings, Inc.

150 Peabody Place, Memphis, TN 38103