Draft PILOT docs show scale of three huge Blue Oval supplier projects
Suppliers at BlueOval City are receiving PILOTs (payment-in-lieu-of-taxes) in exchange for projects with big wages and investments, according to draft agreements obtained by Memphis Business Journal.
Magna International and Avancez Assembly are, to date, the only suppliers to detail the scale of their operations at BlueOval City in Stanton, Tennessee. Construction is underway at all six BlueOval City Supplier Park facilities, but not all have unveiled the company involved, the number of jobs, or the size of the investment.
Universal Logistics is one of the companies taking up a slot, but the company has yet to reveal the scale, purpose, or scope of its facility. The identity of two of the slots remain unknown even with the ground broken.
The Megasite Authority of West Tennessee estimated the numbers based on information provided by the supplier companies, but the actual numbers won’t be known until assessments are done and bills are sent out on an annual basis. The draft PILOTs date to May 2024.
The PILOTs will have to be discussed and approved by the Megasite Authority of West Tennessee, though Megasite CEO Clay Bright said that supplier PILOTs could begin payments as soon as February 2025 in the authority's May 2024 meeting.
Magna’s facilities bring big wages
Magna is taking up two of the supplier park slots to build a seating facility codenamed Thor and a battery enclosure structure facility codenamed Heartland. It is also building a third facility, in Lawrenceburg, Tennessee, that would supply Ford at BlueOval City.
According to the draft PILOT document, Magna Seating of America Inc. is estimated to cost $77.5 million, including $53 million for the building and land costs and $24.5 million for equipment.
It is expected to bring 295 jobs, which would pay an average wage of $35.34 an hour — about $73,500 annually for a 40-hour, 52-week work year.
The PILOT for the seating facility would see payments over 10 years, with 10% saved on both real and personal property taxes. In total, Magna Seating would save an estimated $635,000 over its PILOT term.
Magna Structures LLC is behind the second facility. According to the draft PILOT document, the facility is expected to cost $365.91 million, with an estimated $65.25 million going toward the building and land and $300.66 million in equipment.
The Structures PILOT would see payments over 10 years, with 50% of real and personal property tax reduced. In total, it is estimated to save Magna Structures $8.8 million over its term.
The structure facility is anticipated to bring 500 jobs with an estimated average wage of $45.07 an hour, or $93,600 a year.
A July 2024 white paper by the Tennessee Department of Economic and Community Development cited larger numbers for the Structures project. Referring to as Magna's operating company Cosma International of America Inc., the white paper indicates that the facility making battery enclosures for Ford had a new job commitment of 750 workers and a capital investment of $516.29 million.
PILOTs often provide differing numbers as they are contractural obligations covering a specific period of time, rather than the lifetime of a project.
For example, HVAC manufacturer AAON originally indicated in its PILOT application the project would create 291 net new jobs, but the company has now announced the actual count is 828 over five years.
Avancez brings a lot of jobs, and wages similar to BlueOval SK
Avancez Assembly announced its facility in late April.
The $54 million facility is estimated to cost $26.7 million in building and land, and $27.3 million in equipment, according to the draft PILOT.
It would receive a 10-year PILOT that reduces its tax burden by 10%, saving Avancez $363,000.
Avancez LLC would build a facility, codenamed Aubum, employing 501 people. It would bring an average hourly wage of $23.55, which comes out to $48,880 annually based on a 40-hour, 52-week year.
That average wage puts it in a similar range of battery supplier BlueOval SK’s facility, where production operators start at $21 an hour. Other roles start at $24 an hour and $28.50 an hour with more training, experience, and certifications.
None of the provided draft PILOT plans provide a breakdown of the roles and their starting wage rates.
The other BlueOval Supplier facilities have yet to be announced, and it may be some time until they are. With Ford's Tennessee Electric Vehicle Center launch bumped back to 2027, suppliers may move back their time tables as well.
