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The Pallet Factory Inc.

Project Number: 20191110
Pilot Type: Jobs
Status: Approved
Parcel ID: 073092 00066C
County Commission District: 11 | City Council District: 03, 08

Summary

Amended and Restated – November 18, 2020
The Pallet Factory Inc. (“Applicant”) is seeking a seven-year Jobs PILOT to enable the company to create 23 Net New Jobs with an average base salary of $55,767 excluding benefits and invest $3,500,000 in new construction and $1,800,000 in manufacturing equipment at 3740 Arnold Road in the City of Memphis.

Parcel 073092 00066C is 9.53 acres and contains an existing 46,508 square foot manufacturing facility. The Applicant will construct a new 40,000 square foot facility on the parcel. All of the real estate will be placed in the PILOT, but the applicant’s benefit and PILOT payments on the real property portion will be calculated based on the amount of new space created.

The Pallet Factory makes pine and hardwood pallets and refurbishes existing pallets to customer specifications. The company was launched in 1979 and has operated in this location since 1998. The Memphis-based company serves customers in a 200-mile radius. The Pallet Factory has added a Nashville facility and grown to 120 total employees and $30 million in revenue.
The current Memphis facility is not sufficient to support continued growth. The company is evaluating options that will improve efficiency, reduce material handling time and movements, and modernize production. Additionally, the Pallet Factory needs to divide the facility dedicated to new construction and the refurbishment operation.

Staff projects $952,320 in local total tax revenues to be received during the PILOT term of this project and a $637,926 benefit to the Applicant.

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The Pallet Factory Inc. (“Applicant”) was approved for a seven-year Jobs PILOT to enable the company to create 15 Net New Jobs with an average base salary of $55,767 excluding benefits and invest $3,500,000 in new construction and $800,000 in manufacturing equipment at 3740 Arnold Road in the City of Memphis.

Parcel 073092 00066C is 9.53 acres and contains an existing 46,508 square foot manufacturing facility. The Applicant will construct a new 40,000 square foot facility on the parcel. All of the real estate will be placed in the PILOT, but the applicant’s benefit and PILOT payments on the real property portion will be calculated based on the amount of new space created.

The Pallet Factory makes pine and hardwood pallets and refurbishes existing pallets to customer specifications. The company was launched in 1979 and has operated in this location since 1998. The Memphis-based company serves customers in a 200-mile radius. The Pallet Factory has added a Nashville facility and grown to 120 total employees and $30 million in revenue.
The current Memphis facility is not sufficient to support continued growth. The company is evaluating options that will improve efficiency, reduce material handling time and movements, and modernize production. Additionally, the Pallet Factory needs to divide the facility dedicated to new construction and the refurbishment operation.

PILOT Term:

7

Projected New Jobs:

23

Projected Retained Jobs:

Not applicable

Total Jobs:

23

Projected Average Payroll of New Jobs:

$55,767

Projected Average Payroll of Retained Jobs:

Not applicable

Annual New Direct Payroll:

$1,603,301

Annual Retained Direct Payroll:

Not applicable

Total Capital Investment:

$5,300,000
Real Property Investment:
$3,500,000

Personal Property Investment:
$1,800,000

Community Reinvestment Credit (CRC):
Not applicable

Capital Investment not in PILOT:
Not applicable

Projected Tax Revenue:

$952,320

Projected Taxes Abated:

$637,926
City: $281,367
County: $356,559

Benefit/Cost Ratio:

1.49

Projected MWBE/LOSB Spending:

$970,689

Incentive Provided:

$637,926

Compliance Information

Not applicable

Approved

11/13/2019

Ramp up Period

2

Closing

12/31/2020 (Real)

Effective

12/31/2020

Lease Begins

12/31/2020 (Real)

Lease Expires

12/31/2027 (Real)

Amended

11/18/2020

Property Details

Lease Began

12/31/2020 (Real)

Lease Expires

12/31/2027 (Real)

The Pallet Factory Inc.

3740 Arnold Road, Memphis, TN 38118