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MHR Fund Management LLC

Project Number: 20220105
Pilot Type: Jobs
Status: Approved
Parcel ID: 081093 00002
County Commission District: 04 | City Council District: 02, 09

Summary

MHR Fund Management LLC (“Applicant” or “MHR Management”) was awarded a fifteen-year Jobs PILOT to encourage the company to invest $112,500,000 in a shipping container and chassis manufacturing facility at 8400 Winchester Road in the City of Memphis, creating 400 new jobs paying an average wage of $44,647 (“Project”).

Total investment includes $38,000,000 to purchase the land and building, $2,500,000 for facility renovations, construction and site improvements, and $72,000,000 for new machinery, equipment and other personal property to equip the facility. Community Reinvestment Credit will be awarded.

The property located at 8400 Winchester (Parcel 081093 00002) is 37.017 acres and contains an 817,000 square foot warehouse built in 1982. The property is currently valued at $17,085,400 ($3,892,500 land and $13,085,400 building). The Applicant will occupy 100% of the building. The building has been vacant since Nike relocated its operation from the site approximately six years ago. Both real property improvements and new personal property on the site will be included in the PILOT.

MHR Fund Management, a Delaware limited liability company, is a New York-based investment firm that manages capital across a variety of industries ranging from logistics to entertainment to steel plate fabrication. Founded in 1996, MHR is a control-focused private equity investor with assets of more than $5.5 billion. The company seeks out or builds management teams to guide creation of business plans for new investments, facilitating long-term portfolio growth.

MHR has recognized growing demand for 53-foot chassis and shipping containers that, today, are almost exclusively manufactured in China. The company believes a location in the Central United States is important for a manufacturing and assembly operation and has been evaluating sites in multiple states. If selected, Memphis would become home to three manufacturing lines running multiple shifts with the capacity to produce approximately 22,500 containers and 30,000 chassis annually.

The property located at 8400 Winchester currently produces $421,261 in City of Memphis and Shelby County property taxes, annually. During the PILOT, estimated annual property taxes will average $436,794 and $1,264,863 after the PILOT term expires. Staff projects $37,026,444 in total local tax revenues to be received during the PILOT term of this Project and a $15,336,878 benefit to the Applicant.

**Note Regarding Previous Approval for 8400 Winchester**
EDGE approved a PILOT for the proposed development of an electric vehicle manufacturing plant at 8400 Winchester on March 17, 2021. Mullen Technologies Inc. (the previously approved Applicant) has subsequently pursued a North Mississippi facility for the primary manufacturing plant and is no longer in contention for this site or eligible to close on the PILOT approval based on the prescribed terms and conditions. ROIB2 Winchester, LLC (the property owner) now has a purchase and sale agreement for the property with a subsidiary of MHR Management and has ceased marketing activities with any other potential purchasers.

PILOT Term:

15 years

Projected New Jobs:

400

Projected Retained Jobs:

Not applicable

Total Jobs:

400

Projected Average Payroll of New Jobs:

$44,647

Projected Average Payroll of Retained Jobs:

Not applicable

Annual New Direct Payroll:

$17,858,800

Annual Retained Direct Payroll:

Not applicable

Total Capital Investment:

$112,500,000
Real Property Investment:
$40,500,000

Personal Property Investment:
$72,000,000

Community Reinvestment Credit (CRC):
Not applicable

Capital Investment not in PILOT:
Not applicable

Projected Tax Revenue:

$37,026,444

Projected Taxes Abated:

$15,336,878
City: $6,750,384
County: $8,586,494

Benefit/Cost Ratio:

2.41

Projected MWBE/LOSB Spending:

$2,925,532

Incentive Provided:

$15,336,878

Compliance Information

Not applicable

Approved

1/19/2022

Ramp up Period

2 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

MHR Fund Management LLC

8400 Winchester Road, Memphis, TN 38125