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Source: Commercial Appeal

By Amos Maki

Two other firms miss investment, job targets, lose a year from their tax freezes

Two companies specializing in areas the public and private sectors have targeted for growth -- logistics and high-level biomedical research -- won preliminary approval Thursday for tax freezes.

Meanwhile, two other companies will have their tax freeze benefits reduced for failing to produce the number of jobs, capital investment and wages they promised.

Trane Commercial and Residential Air Solutions and Novostem Therapeutics Inc. won approval from the Memphis and Shelby County Industrial Development Board's evaluation committee for payment-in-lieu-of-tax freezes. The IDB will vote on the PILOTs next month.

Heating and air systems manufacturer Trane plans to consolidate parts distribution facilities in La Crosse, Wis., and Memphis into one national parts center in the Memphis area in a move that could create 165 new jobs.

"We will be doing a lot of hiring in the next six to eight months," said Trane distribution center manager Dave Shelby.

Trane, which occupies 100,000 square feet at 4250 Concord, is considering two properties inside Memphis: a 350,000-square-foot space inside the 400,000-square-foot Building H at Pro Logis' Memphis Distribution Center, and a 350,000-square-foot space inside the 458,820-square-foot Summit III building inside Summit Distribution Center at 5050 Holmes. Trane is also considering two sites in DeSoto County.

Trane's capital investment would reach nearly $3.3 million, and the median wage for the jobs, including benefits, is $38,043.

The IDB's evaluation committee approved a six-year freeze for Trane, with a tax savings of $1.3 million for the ProLogis property and $1.4 million for the Holmes Road facility.

The evaluation committee also approved a seven-year PILOT for Novostem, a pharmaceutical research and development company that is working on a cure for cancer.

Novostem, which aims to destroy cancer by testing new and existing drugs against cancer stem cells, said it would create 25 highly technical jobs with a median wage of $60,000, including benefits.

"This is revolutionary science," said Gary Shorb, president and CEO of Methodist Le Bonheur Healthcare, which has invested $1 million in Novostem.

Novostem technology allows the company to rapidly screen thousands of compounds against cancer stem cells, which many researchers believe are the root cause of cancer tumors. Cancer stem cells have been identified in certain types of leukemia, breast tumors and brain tumors.

Although conventional cancer therapies do an effective job of killing cells within a tumor, they may miss cancer stem cells, which allow the cancer to regenerate.

"This has the opportunity to be one of the greatest things we've ever done in this city," said Shelby County commissioner and evaluation committee member Sidney Chism.

Cascade Tissue Group and Hewlett Packard had their tax freezes reduced by one year.

Cascade, a manufacturer of giant rolls of tissue and toilet paper, failed to deliver the number of jobs and amount of capital investment it promised in 2003. The company's PILOT term was reduced from nine years to eight.

Hewlett Packard also had its PILOT term reduced by one year for failing to meet the job creation and wage levels it promised at one of its sites. If HP doesn't maintain the current job and wage levels at the site, it could have its PILOT term reduced by another year.