TAG Truck CenterTAG Truck Center

QUICK FACTS

MEMPHIS, TN

For more information contact: Tammy C. Propst | 864.271.2737

tpropst@taxadvantagegroup.com

PROJECT SPONSORTAG Truck Center, LLC

CDEsMBS Urban Initiatives CDE, LLCStonehenge Community Development, LLCSunTrust Community Capital, LLC

TOTAL DEVELOPMENT COST$37,000,000

NMTC ALLOCATION$23,000,000

LOCATION4451 American WayMemphis, TN 38118

SQUARE FOOTAGE164,000

LEVERAGED LENDERMercedes-Benz Finance

NMTC INVESTORSunTrust Bank

PERMANENT JOBS577 Direct166 Indirect/Induced

CONSTRUCTION JOBS70 Direct72 Indirect/Induced

TARGETED DISTRESSMedian Family Income: 63.07%Poverty: 28.5%Delta Regional Authority Distressed AreaUnemployment: 11.4%

FINANCING COMPLETEApril 2017

But TAG has a larger vision for the training institute. With the help of NMTC financing, they are establishing a program to equip unskilled local residents with the skills to become certified techni-cians. The ingenious program started when MBS Urban Initiatives CDE worked with McCormack Baron Salazar (MBS) to leverage community connections with Advance Memphis, RISE Memphis, the Memphis Urban League and the Boys and Girls Club of Memphis. Each of those organizations will connect TAG to program applicants and – with $50,000 of collective financial support from TAG – help coordinate training efforts. In addition, the NMTC financing will provide $100,000 to assist Low-Income Persons (LIPs) with purchasing/financing the cost of starter tool kits, thus eliminating the single greatest barrier to entry for LIPs.

Not only will the increased capacity provide TAG with a steady stream of highly skilled workers – the company expects to train at least 400 students throughout the 7-year NMTC period – it will also supply the skilled labor needs of non-competitive companies in the area like FedEx, Swift, Ozark Motor Lines, Penske, Ryder and other large fleet customers of TAG Truck Center. In the future, TAG anticipates that LIC residents who enter and complete the training program will be able to either work directly for TAG Truck Centers or fill one of the 2,800 local mechanic/tech positions forecasted by the Tennessee Dept. of Labor.

Total jobs for the project include 405 new employees, 172 retained employees and 142 construc-tion-related jobs.

“We are indebted to Tax Advantage Group for spearheading and managing the New Markets financing for this multi-faceted project. Not only does it ensure a bright future for TAG Truck Center, but for all of Southeast Memphis.”

− Gary Dodson, Vice President and CFO, TAG Truck Center

BackgroundThe New Markets Tax Credit (NMTC) Program permits taxpayers to receive a credit against federal income taxes for making Qualified Equity Investments (QEIs) in designated Community Develop-ment Entities (CDEs). Substantially all of the QEIs must in turn be used by the CDE to provide investments in Low-Income Communities (LICs).

The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over the seven-year credit allowance period. Investors may not redeem their investments in CDEs prior to the conclusion of the seven-year period. The NMTC program provides financing availability for projects in underserved geographic areas and with extremely favorable terms for businesses and real estate developers or owners. The result of these investments fulfills financing gaps for projects, and allows projects to enhance community-oriented outcomes to generate measurable community impacts.

ProjectTAG Truck Center is a full-service commercial truck dealership that offers a complete line of sales, service and parts distribution for Freightliner, Western Star, Mitsubishi Fuso and Sprinter trucks. The company operates from five locations throughout Greater Memphis, all which are overcrowded due to the company’s rapid growth. TAG has purchased the site of the former Mall of Memphis to consolidate their locations, bringing hope to a once thriving, but now long-neglected area.

Built in 1981, the Mall of Memphis once served as an anchor of growth for Southeast Memphis. It had popular stores, a food court, plenty of parking, an indoor ice skating rink, and the area was flush with secondary retailers. But in the late nineties, the mall and its surroundings fell victim to the decline of the suburbs. Businesses moved out as drugs and violence took over. Poverty set in. In 2003, the Mall of Memphis closed, a chain link fence was put up to keep vandals out, and the site fell into a state of decay.

Community ImpactThe construction of a 164,000 SF multi-faceted corporate headquarters for TAG does far more than ensure the successful growth of the company. It is revitalizing an entire community. The scope of the project allows TAG to consolidate all five of its current locations and expand its training services.

The main building (132,000 SF) will feature a showroom for new and used trucks, 42-bay service department, a 12-bay body shop, an oasis center for drivers while trucks are repaired, a retail shop, and an employee center with locker rooms, break rooms, bathrooms and showers. The service area will be unique in the industry in that the entire space will be heated and cooled.

A second building (32,000 SF) will house the TAG Technical Institute (TTI) and the company’s rapidly growing parts distribution center. The TTI is an in-house program that trains and certifies Daimler diesel engine technicians. With the help of NMTC financing, TAG has a larger vision for the TTI. TAG is establishing a program to equip unskilled local residents with the skills to become technicians, and is providing $100,000 of financial assistance to assist Low-Income Persons (LIPs) with purchasing starter tool kits, thus eliminating the single greatest barrier to entry for LIPs in the industry. Also, TAG partnered with the CDEs to leverage community connections with Advance Memphis, RISE Memphis, the Memphis Urban League and the Boys and Girls Club of Memphis. Each of these organizations will connect TAG to program applicants, and with $50,000 of TAG financial support will coordinate training efforts. The expanded TTI will allow TAG to supply 400 trained technicians for itself and other local logistics companies – double its prior capacity – within the seven-year NMTC compliance period.

“We are indebted to Tax Advantage Group for spearheading the New Markets financing for this multi-faceted project. It ensures a bright future for TAG Truck Center and Southeast Memphis.”

− Gary Dodson, Vice President and CFO, TAG Truck Center