EDGE Sewer Incentive Pays Off

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The name, Sewer Capacity Management Incentive doesn't exactly ring with excitement but the program is leading to growth, opening the door for development where there otherwise might never had been any.

The tax incentive was created to help developers who were facing issues with sewage capacity in certain areas of the city. That was exactly the case for Arlington Properties in 2018, when they were looking to build a large apartment project near Shelby Farms. The company contemplated abandoning the project when they were told they might not be able to connect to the city’s sewer lines.

“When we were first made aware of the sewer capacity issue in this part of Memphis, we determined this development was dead and moved on to other projects," said Arlington Properties executive vice president David Ellis. 

The Sewer Capacity Management Incentive PILOT helps applicants absorb the cost of constructing offline sewer storage and pumping facilities by abating City property taxes to offset the cost of the required offline sewer system. The projects must be PILOT eligible, located in the City of Memphis, and recommended by the Department of Public Works.

The incentive renewed Arlington Properties’ interest in the Shelby Farms site. The company will move forward with its 267-unit, $37.6 million apartment community. It was approved for the incentive in December of 2019. As part of its PILOT agreement, the company will install two, 20,000-gallon sewage tanks on site. Those will pump the waste into the city system during off-peak hours, between 11 p.m. and 5 a.m.

"The EDGE sewer incentive saved this deal and brought it back to life," said Ellis. "We are very excited to get moving.”  

Building permits were filed for the site in early-March. The project includes $37,650,000 in capital investment at 7620 Raleigh Lagrange Road across from Shelby Farms Park. During the two-year PILOT term, Velo will generate more than $1.66 million in tax revenue for the city. 

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