A company that saw record-setting, multi-billion-dollar revenues and record-setting, multi-million profits in 2018, won’t have to pay full taxes for its new operations in Memphis over the next eight years.
Raymond James Financial won a $3.2 million payment-in-lieu-of-taxes (PILOT) deal
from the Memphis and Shelby County Economic Development Growth Engine (EDGE) Wednesday for a project to move its Memphis operation from Downtown to East Memphis.
The vote was unanimously approved by EDGE board members, with two members recusing themselves from the vote. The vote came after zero debate on the deal and only a few questions from one board member.
The broker-dealer firm will have its full tax bill partially forgiven here over the next eight years for a $23.6 million project in East Memphis. That project would add 100 employees here and yield more than $5.8 million in local taxes over the term of the agreement, according to the company.
EDGE president Reid Dulberger said the properties Raymond James will move into now yield about $670,000 each year in real and personal property taxes for the city. During the eight-year course of the PILOT, the properties will yield $805,000, which Dulberger characterized as a "tidy increase for the city and county." Once the PILOT term is finished, the property will yield $1.1 million in taxes annually, Dulberber said in his short remarks to introduce the project to the EDGE board Wednesday.
With the PILOT in hand, the Memphis facility will expand, providing service for the Private Capital Group, Equity Capital Markets, Fixed Income Markets, and maintaining a portion of the company’s back office operations.
The company said it needs to leave the iconic, step-roofed building in Downtown Memphis for a new location in East Memphis. Raymond James officials would not give any timeline as to when the 705 employees in the tower now will leave for the space in East Memphis.
Worth Morgan, the recently re-elected Memphis City Council member, hold the council's non-voting seat on the EDGE board. He said while it's hard to see companies leave Downtown Memphis, he doesn't lose sleep over the future of the Raymond James tower the way he does over properties like 100 N Main.
“Because of the deterioration of its Downtown facility, Raymond James has signed two leases to relocate its operations into a 250,000 square feet in two buildings located in East Memphis,” reads the firm’s application to EDGE. “The leases are contingent on EDGE’s approval of our PILOT application. If approved, Raymond James will add at 100 jobs at these East Memphis locations.”
Those jobs would come with a an average salary of nearly $64,000, far north of the $40,400 salaries targeted by EDGE. More than half of those new jobs would be operations clerks with annual salaries of $50,000 and a benefits and incentive package worth $20,000. Thirty-five asset management clerks would earn the same package.
An operations manager could earn a package worth $152,000 annually. An asset manager supervisor could earn $154,000.
Each year, the company would pay nearly $8 million in wages and benefits to all of its employees here, according to its application.
Raymond James is based in St. Petersburg, Florida. In 2012, Raymond James and Memphis-based Morgan Keegan merged to form “one of the country’s largest independent full-service wealth management and investment banking firms not headquartered on Wall Street,” according to the Raymond James website.
The company posted “record annual net revenues of $7.27 billion” in its 2018 fiscal year, according financial reports. In 2018, the company also posted “record annual net income [or profits] of $856.7 million.” It’s total return on equity during the year was 14.4 percent.
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“Our focus on attracting and retaining client-centric financial advisors and providing them with industry-leading tools and resources continues to produce record results,” Raymond James Financial chairman and CEO Paul Reilly, said in a statement at the time. “It is especially gratifying to deliver shareholders an attractive return on equity in fiscal 2018, particularly given our strong capital position and the significant investments we made during the year.”