On Thursday, Electrolux announce it would be closing its Memphis plant in order to consolidate its manufacturing at its Springfield, Tennessee location. The problem is that when the company moved to Memphis in 2014, it entered into an agreement that mandated the company make a capital investment of over 1,200 jobs, $126 million in personal property and over $69 million in real property.
In return they received a tax abatement.
On Friday, Shelby County Assessor Melvin Burgess said if it is determined that Electrolux didn't hold up its end of the bargain he will take action.
"As Assessor of Property, the moment Electrolux is declared in breach of this agreement, it is my duty to place Electrolux back on the tax rolls and back-assess them to the date they entered into the agreement. This action will allow our local governments to collect millions of dollars in back taxes."
Burgess said he has already sent a team of appraisers to the plant to determine the "true value of the property."
“Electrolux’s breach of the PILOT (payment in lieu of taxes) agreement will result in an approximate loss based on assessed property value of three million dollars for Shelby County Government and two million dollars for the city of Memphis,” Burgess said on Thursday. “I estimate that the City and County have already abated revenues totaling five million dollars.”
The company opened its Memphis plant just five years ago.
According to Congressman Steve Cohen, Electrolux received $188 million in government incentives. That includes 800-acres of land, a break on property taxes, a cash grant from the state and millions from both the city of Memphis and Shelby County.
Leaders also said tax payers should get their money back.
"My goal is wanting to make sure that if there are any clawbacks or anything of the city of Memphis is entitled to or the overall investment in Electrolux that we receive those funds," said Councilman Berlin Boyd.
City leaders are expected to meet with the company on Friday.
"In 2010, the State, County and City acted in good faith and made an unprecedented investment in this company and in Memphis," Memphis Mayor Jim Strickland said. "Just like they are exercising their option to leave, we will exercise our option to vigorously defend our investment."
In a statement released to WREG, Electrolux said "This decision is not about Memphis or doing business in Memphis. This decision is about appropriately right sizing the company for the changing market. We want to continue to work with the Memphis community and intend to meet our obligations."