The story for Memphis in recent months, when it comes to corporate headquarters, is one of retention and expansion. Large corporate relocations to the Mid-South aren’t dominating headlines, but existing players in the market are making new – and big – investments in Memphis, adding up to positive change for the corporate landscape.
“What we’re seeing with companies like Orgill and ServiceMaster and Sedgwick, they’re not only staying, they’re growing,” said Mark Herbison, senior vice president of economic development with the Greater Memphis Chamber. “And the good thing is, they’ve got real estate in other communities and could have chosen to expand somewhere else, but they are choosing to stay and expand here in Memphis.”
Sedgwick Claims Management Services, for example, in February announced a corporate headquarters expansion that brings an investment of $34 million to the local economy and 150 new jobs. Sedgwick’s President & CEO, Dave North stated that community involvement is a major plus in deciding where to locate their headquarters.
“For a company the size of Sedgwick, we can feel like we have a real part of the community. Our colleagues get to participate in social and economic activities in the city, a city that is welcoming to us. We can reach out to so many other businesses in town like Le Bonheur Children’s Hospital and St. Jude Children’s Research Hospital, FedEx and others that just add to the rich environment. Memphis is a terrific place to have a business,” said Dave North, President & CEO, Sedgwick Claims Management.
ServiceMaster is in the midst of relocating its East Memphis headquarters – and 1,200 ServiceMaster employees – into a 328,000-square-foot space Downtown, at the site of the former Peabody Place mall.
Memphis-based hardlines distributor Orgill Inc. is building its new world headquarters in Collierville, a $15 million investment that will bring 115 new jobs.
ServiceMaster’s CEO, Rob Gillette stated in the press release for the headquarter announcement: “We’re thrilled to be joining the downtown business community and being a part of the city’s ongoing downtown revitalization efforts,” said ServiceMaster Chief Executive Officer Rob Gillette. “We’re excited to start the process of creating a new headquarters that reflects our winning culture and will help us attract and retain great talent in Memphis.”
The Chamber’s Economic Development team works every day with companies looking to relocate or expand—holding a one-stop-shop approach to doing business in Memphis. Whether it’s getting data from the Chamber’s research department, connecting on workforce, utilities or state incentives, the Chamber brings together all the representatives to provide the information a business needs to choose Memphis for their business.
“We’ve been members of the Chamber for a long time and they’ve been great partners in this. Through the Chamber of Commerce, we’re able to see a lot of what’s going on in Memphis that one company alone can’t have vision into, but through the Chamber we get exposed to everything that’s going on in Memphis,” said North.
“We’ve done a good job of retaining the corporations or the companies that have been here for a while,” said Steve Guinn, vice president with Highwoods Properties. “ServiceMaster, it was a huge win to keep them in Memphis. Sedgwick has been an expanding company. Obviously International Paper, FedEx.”
So what makes Memphis attractive to large corporate clients? The answer is the same for any city, and it’s basically that there is no secret formula. And that’s why every positive change that happens in Memphis is good for economic development in the city overall.
From Downtown’s residential boom to revitalization in key entertainment districts like Cooper-Young, Broad Avenue, the Highland Strip and Overton Square, the city is changing – and so is its appeal to workers of all types, but particularly to young professionals.
“Young people look for those places where they can make a big impact. In other communities, it can be difficult to stand out and make a difference. But in Memphis, you can take an idea or contribute to a cause and it makes such a huge impact on the community,” said Herbison.
Memphis’s central location, logistics capabilities and transportation resources have helped the region retain its status for decades as one of America’s prime distribution hubs. Attracting corporate businesses is a slightly different animal than attracting industrial and warehouse users, but Memphis has amenities to offer both, Herbison said.
“We’re lucky here to have an abundance of really nice corporate office buildings in every class, A, B and C,” he said. “We have nice green field areas like Schilling Farms where there’s acreage to build corporate headquarters and back office operations. And we’re at the center of the country, which, if you’re a corporation, makes it easy to serve both the West and East Coasts at the same time.”
Not only is cost of living low, so is cost of office space compared with larger markets. Herbison pointed to a recent Manhattan real estate deal that rang in at more than $400 per square foot.
“Our average is somewhere around $18 to $20 a square foot,” he said. “Just in real estate cost alone, a company can save millions of dollars being in Memphis. So when you couple that with fun things to do in a city like Memphis, professional sports, museums, communities like Downtown and Midtown, I put the quality of our neighborhoods and our business environment against any city in the country. That’s what we’re out there promoting, that and the fact that being here, you can save millions of dollars on your bottom line.”
Mike Mullis, Jr., who consults on site selection with companies around the world in his role as senior vice president of J.M. Mullis Inc., said when it comes to attracting large corporate offices, there are two types of end users to consider – a company that plans to move with its existing employee base versus a company opening a brand new operation and hiring from the local workforce.
“Every decision is not made based on the exact same criteria,” said Mullis, also a partner in Farnsworth Holding Co. “If you are a company that’s looking to relocate and you’ve got a lot of people that travel, then air service is going to be a big issue for you. How many flight opportunities are there, and where do they go? What are the spousal employment opportunities? Are we going to a place where I’m going to have a job but there are not a lot of opportunities for my spouse?”
Strong school systems and cultural amenities are important in this category, as well. For companies in the other category, schools are key for a different reason.
“Then you want to know about the educational system in town, but you’re more interested in it from the standpoint of, what kinds of employees are they producing?” Mullis said. “Am I going to be able to hire 3,000 to 4,000 people around that location to staff my headquarters? They look at it differently.”
“We approach economic development by first understanding key motivators in making an expansion or relocation decision,” said Ernest Strickland, senior vice president of workforce development for the Greater Memphis Chamber. “Thankfully, we have strong relationships with site consultants and we’re able to package our workforce narrative in an easily understood manner according to the various motivating factors. Simply put, we guarantee a quality workforce. To ensure we honor that promise, a primary function of our workforce team is to collaborate at the highest levels with partners in order to produce one of the best workforce development ecosystems in the country.”
“I think Memphis is a great place to live,” added Guinn. “We’ve got a lot to offer from the standpoint of weather, cultural amenities, cost – it’s a fairly low-cost place to live. I think people are looking for opportunities, and the more we can do to grow our workforce the better. I think from that standpoint, we’ve done well.”
Story by: Stacey Wiedower
Photo by: Isaac Singleton
This article is part of the Summer 2017 issue of Memphis Crossroads. View the entire issue here.