Nike, Inc. (Beaverton, Ore.) has acquired 125 acres in Memphis, Tenn., where it plans to build a one million sq.-ft. footwear distribution center. Projected cost savings for Nike and its retail customers exceed than $200 million. Other benefits include reduced shipping times and increased service capabilities.
The Industrial Development Board (IDB) for Memphis and Shelby County granted Nike's application for making the facility eligible for "Payments in Lieu of Taxes" leases based upon anticipated job creation and capital investment. The new facility will be located in the Frayser area of Memphis, which had been designated as "enterprise zone" to provide economic stimulus to the surrounding community.
The new DC will employ people from Nike's existing facility in Memphis and those relocating from its facility in Wilsonville, Ore., which it will vacate after 2008. As a precursor to completing the Northridge purchase, Nike reached a sale-leaseback agreement on the Wilsonville facility with CB Richard Ellis Investors, an institutional real estate investment manager that purchased the property on behalf of the Illinois State Board of Investment. The recorded sale-leaseback price was $27.6 million. This agreement will allow Nike to continue to operate at the Wilsonville site through 2008.
"The agreement was designed to continue to operate Wilsonville without disruption to our employees or our business," said Nick Athanasakos, v.p. of USA Supply Chain for Nike.