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Medtronic Logistics LLC & CEVLogistics U.S., Inc.

Project Number: 20211205
Pilot Type: Jobs
Status: Approved
Parcel ID:
County Commission District: 11 | City Council District: 03,08

Summary

Medtronic Logistics LLC and CEVA Logistics U.S., Inc. (“Co-Applicants”) was awarded a fifteen-year Jobs PILOT to encourage the construction of a new 1,014,000 square foot, $133,350,000 light manufacturing and distribution center at 5300 Airways in the City of Memphis. The project intends to retain 365 existing Memphis employees and create 265 jobs paying an average wage of $48,715.

Capital investment from the project includes $42,100,000 for building shell construction and site improvements, $20,150,000 for tenant specific improvements and $71,000,000 for new machinery, computerized technology, equipment, and other personal property. Community Reinvestment Credit has been requested.

The 79-acre project site at 5300 Airways will be made up of seven contiguous parcels that will be combined and re-platted:
- 5214 Airways: (Parcel 094400 00088) is 0.74 acres of vacant land appraised at $50,600.
- 2263 E. Holmes: (Parcel 094400 00092) is 2.10 acres of vacant land appraised at $37,500.
- 2295 E. Holmes: (Parcel 094400 00093) is 1 acre of vacant land appraised at $20,400.
- 2353 E. Holmes: (Parcel 094400 00094) is 38.86 acres of vacant land appraised at $419,300.
- 2235 E. Holmes: (Parcel 094400 00124) is 2.04 acres of vacant land appraised at $118,800.
- 0 Airways: (Parcel 094400 00160) is 13.30 acres of vacant land appraised at $441,300.
- 0 Airways: (Parcel 094400 00161) is 21.33 acres of vacant land appraised at $686,400.

Medtronic is evaluating consolidation of its six U.S. distribution centers into two facilities and working with a partner to improve the customer experience and logistical efficiencies. One of the two facilities would be located in the Mid-South area, with CEVA operating logistics services from this facility. Medtronic also plans to use a portion (30%) of the building for manufacturing, surgical kitting, product packaging and assembly operations, while CEVA will be contracted to operate logistics services in approximately 70% of the property.

The Mid-South facility would replace Medtronic’s existing 376,000 square foot Memphis facility at 4340 Swinnea Road and add substantial additional capacity. Medtronic will occupy and directly operate approximately 30% of the property for light manufacturing and assembly.

If Memphis is chosen, the baseline staffing levels from the existing Swinnea Road would be maintained and significantly expanded. The Project would be operated as an integrated facility supporting only Medtronic activities. CEVA would not support other clients or customers from this facility.

The property under consideration currently produces $28,908 in City of Memphis and Shelby County property taxes annually. Estimated annual property taxes will average $540,687 during the PILOT term and $1,841,052 after the PILOT terminates. Staff projects $26,113,344 in total local tax revenues to be received during the PILOT term of this Project and a $22,384,869 benefit to the completed project.

**Medtronic and CEVA will jointly receive PILOT benefits for the Project and collectively be responsible for PILOT commitments, reporting and compliance. Both real property improvements and new personal property located on the site will be included in the PILOT. To accommodate growth and technological advancements, additional future personal property investment, in an amount not to exceed 50% of the amount approved by EDGE, may be added to the project and receive benefit for the PILOT Term remaining at the time the property enters the PILOT program.**

Medtronic Logistics is a division of Medtronic Public Limited Company. The Dublin, Ireland- based medical device manufacturer has a long history in our community, acquiring Memphis-based Sofamor Danek in 1999, expanding into spinal and biologic treatments. Today, Medtronic has revenues of $30 billion and more than 90,000 employees worldwide.

CEVA Logistics U.S., Inc. is a privately held Delaware company. Its parent company, CEVA Logistics AG, is a fully integrated supply chain management company headquartered in Marseille, France with 78,000 employees in 160 different countries and $7 billion in revenue.

PILOT Term:

15 years

Projected New Jobs:

265

Projected Retained Jobs:

365

Total Jobs:

630

Projected Average Payroll of New Jobs:

$48,715

Projected Average Payroll of Retained Jobs:

Not applicable

Annual New Direct Payroll:

$12,909,475

Annual Retained Direct Payroll:

Not applicable

Total Capital Investment:

$133,350,000
Real Property Investment:
$62,250,000

Personal Property Investment:
$71,100,000

Community Reinvestment Credit (CRC):
Not applicable

Capital Investment not in PILOT:
Not applicable

Projected Tax Revenue:

$26,113,344

Projected Taxes Abated:

$22,384,870
City: $9,852,493
County: $12,532,377

Benefit/Cost Ratio:

1.17

Projected MWBE/LOSB Spending:

$18,920,230

Incentive Provided:

$22,384,869

Compliance Information

Not applicable

Approved

12/15/2021

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

Medtronic Logistics LLC & CEVLogistics U.S., Inc.

5300 Airways Blvd, Memphis, TN 38116