The erstwhile Mall of Memphis property received an injection of federal tax credits to help fund its conversion into the TAG Truck Center. The credits go towards the revitalization efforts for low-income areas.
The partnership between Stonehenge Capital, McCormack Baron Salazar and Suntrust Community Capital will finance the 164,000-square-foot space. The firms are investing $23 million through the Federal New Markets Tax Credit Program.
“TAG Truck Center is a great example of a community-transforming investment made through New Markets Tax Credits, providing needed jobs in a low-income area and positioning the business for future growth,” said L’Quentus Thomas, Stonehenge’s director of community development.
When complete, the TAG Truck Center is expected to provide hundreds of jobs to the long-abandoned site. The mall closed in 2003.
The redevelopment came about because of a lack of space for a company eager to grow. Initially, TAG Trucks wanted to buy 40 acres of the property.
Last September, Huntington Industrial Partners and Johnson Development Associates, both out of Atlanta, pursued a 15-year, $24.7 million tax break from the Memphis-Shelby County Economic Development Growth Engine Board (EDGE).
A speculative venture, the plan was to build warehouses on the remaining expanse. The EDGE board voted to postpone the decision as speculative projects had never been issued a payment-in-lieu-of-taxes incentive (PILOT) before.
Rejected, the developers approached TAG Trucks about buying the entire site.
“As soon as that PILOT was denied, they called us and said ‘Hey, do you want to buy the whole property?’” said Gary Dodson, CFO and co-founder of TAG.
So, they went ahead and purchased the entire 113-acre parcel.
During the transaction, a friend counseled Dodson to consider both the New Market Tax Credit Program and the local PILOT as well.
“We started doing research about the economics of the area and were taken aback by what we found on the average incomes and level of unemployment,” said Dodson. “At this point, we really started to think about how much we could help the area with this project.”
“I believe our development will help the community and I think it will do the things the EDGE program is trying to do,” said Dodson.
“TAG Truck Center is the type of investment that our low-income communities need – investments that bring access to living wage jobs for entry-level employees, on-the-job training, and room for career advancement,” said Laurel Tinsley, McCormack Baron Salazar's Urban Initiatives CDE’s executive director.
When the site is developed, TAG Truck Center will merge their four area operations at the new location. The remaining 113 acres bordered by American Way and I-240 will be sold.
“We really think it can become a hub for the logistics business and provide us a better place to do business for our customers,” said Dodson.
Currently, TAG Trucks trains its technicians at an older building in West Memphis that isn’t configured for its needs. The new building will remedy the shortcomings.
At the new center, a full-service body shop, retail store and distribution center will populate the space. There will also be a technician training facility. The beneficiary of an expansion, the training facility will offer job training and education opportunities. There will be an estimated 205 full-time employees working at the center.
“We train all of our technicians ourselves. We are like a car dealership for big trucks. Most of our customers are business to business, meaning we do have some owner-operators but mostly we deal with large fleets – Swift, FedEx – and we’re a Daimler dealer so they are some off-site training in Detroit,” said Dodson
No experience is necessary to apply. After graduating, students will be fully certified and prepared for upcoming certification exams.
“We don’t hire college graduates to be technicians. They are generally high school graduates or GED that can work their way into a middle-class wage and get some money circulating in the community.”
TAG deals in Freightliner, Mitsubishi and Sprinter trucks and has 10 full-service dealerships in five states.
The new center is under construction and expected to be open by the end of the year.