CLOSE

Gov. Bill Lee, La Vergne Mayor Jason Cole and Rutherford County Mayor Bill Ketron talk about Icee relocating its headquarters to La Vergne.

Murfreesboro Daily News Journal

Costco deal adjusted for 110 workers instead of 225

Story Highlights

  • MAHLE provides automotive supplies to Nissan, Volkswagen and General Motors factors in Tennessee
  • Company will be making $34 million capital investment to expand operations in Murfreesboro
  • The expansion will add 140,000 square feet to Butler Drive operation
  • For every $1 in tax abatement, deal is expected to generate $8 in local tax revenues

MAHLE, an automotive supplier, will get an $822,726 property tax break by adding 345 jobs through an expansion in Murfreesboro, officials decided Wednesday.

“These are all great jobs,” said Patrick Cammack, Rutherford County Chamber of Commerce’s senior vice president of economic development.

Buy Photo

Air cleaner covers for automobile engines fill storage cages at MAHLE Wednesday. (Photo: John A. Gillis/DNJ)

MAHLE has an operation on Butler Drive and provides products to Nissan, Volkswagen and General Motors, which operate automobile factories in Tennessee, Cammack said. 

The Rutherford County Industrial Development Board expects the five-year agreement under the code name, “Project Phoenix Tres” to generate $6.6 million in local taxes. The IDB had a similar approach for  “Project Bear” in offering a tax-abatement deal to attract Icee to move a headquarters and soft drink distribution center to La Vergne from California.

MAHLE is expected to make a $34 million capital investment and provide an average wage of $50,000 per year for the jobs, which include engineering positions, Cammack said.

The pay for the added jobs is slightly more than the county average of $49,322, according to an IDB consultant report from Younger Associates of Jackson, Tennessee.

The estimated wages were based on the company’s average pay with a 20% fringe benefits allowance, according to the report. 

The jobs plan comes at a time unemployment has been high because of the pandemic.

MAHLE will add 140K square feet

The deal with MAHLE is expected to provide a total economic impact of $52.5 million, according to the Younger report. For every $1 in property taxes abated, the project is expected to generate $8.03 in local taxes.

MAHLE, a leading international automotive supplier based in Stuttgart, Germany, will add 140,000 square feet to its operations at 906 Butler Drive in Murfreesboro, according to a press release from the Tennessee Department of Community and Economic Development (TNECD).

Gov. Bill Lee also praised the company’s plans to add jobs in Rutherford County, according to the press release.

“I applaud MAHLE for its expansion in Murfreesboro,” Lee said. “Substantial investments like MAHLE’s are crucial to get Tennessee’s economy back on track and ensure quality jobs are available for Tennesseans.” 

The expansion will support a new injection molding production on site. The addition in Murfreesboro will allow the company to better optimize its production footprint and be closer to automotive customers located in the Southeast.

Tennessee Commissioner Bob Rolfe, who oversees the state’s community and economic development pursuits, also touted the expansion.

“MAHLE’s significant expansion is terrific news for Murfreesboro and surrounding areas,” Rolfe said in the press release. “With many Tennesseans in need of quality job opportunities, TNECD is focused on supporting our local communities and attracting investments like MAHLE’s to Rutherford County.”

Since 2015, TNECD has supported nearly 30 economic development projects in Rutherford County, accounting for over 3,800 job commitments and $1 billion in capital investment, according to the press release.

Costco deal with IDB adjusted

In addition to approving a tax-abatement plan for MAHLE, the IDB adjusted an agreement for a proposed Costco store in Murfreesboro, west of a nearby Interstate 24 interchange with New Salem Highway. 

The original agreement approved September 2019 was for the company to add 225 jobs off Warrior Drive north of New Salem Highway. The new agreement, which did come at the request of the national retailer, calls for 110 jobs based on sales revenue estimates, said Cammack, adding that he expects Costco to go beyond the agreement in hiring.

“We are anticipating the jobs still being above 200,” said Cammack, adding that Costco averages 275 workers at each store.

Costco is expected to pay workers an average of $26 per hour, which should be $54,000 annually, Cammack said. 

The tax break agreement for Costco will remain nearly $1 million. For every dollar in taxes abated, the deal is expected to generate $11.20 in local taxes, which is a decrease from the $12.30 in the original agreement, Cammack said. 

The adjusted agreement did not come at the request of Costco, IDB attorney Sumner Bouldin said. 

SUPPORT OUR WORK: To support award-winning journalism here in Rutherford County, sign up for a digital subscription to DNJ.com.

What jobs would you like to see come to Rutherford County? Reach reporter Scott Broden at [email protected] or 615-278-5158, and on Twitter @ScottBroden.

Read or Share this story: https://www.dnj.com/story/news/2020/07/29/murfreesboro-may-gain-345-jobs-through-tax-break-agreement-rutherford-county-idb/5534377002/