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Memphis mayor: Electrolux agrees to drop PILOT, pay full share of local taxes

MEMPHIS, Tenn. — Electrolux will voluntarily release its PILOT agreement, meaning that the appliance maker will pay its full share of local taxes as it winds down production at its Memphis facility, Memphis Mayor Jim Strickland said Friday.

Strickland, Shelby County Mayor Lee Harris, EDGE President and CEO Reid Dulberger and Greater Memphis Chamber Senior Vice President Eric Miller met with Electrolux representatives Friday afternoon.

“Shortly after the meeting, Electrolux informed us that it is voluntarily releasing its PILOT, meaning it will begin to pay the full taxable amount on the property,” Strickland said in a statement.

On Thursday, Electrolux announced it would be closing its Memphis plant in order to consolidate its manufacturing at its Springfield, Tennessee location. The move affects 530 employees. The Memphis facility opened in 2014.

In 2010, city, county and state officials agreed to the following incentives to lure Electrolux to the city, according to the city: Two parcels of free land totaling 800 acres in Pidgeon Industrial Park; $40 million from the city and county; $2 million from the city and county for ancillary costs; a 15-year PILOT abating 90 percent of city taxes and 75 percent of county property taxes; a $95 million cash grant from the state of Tennessee; and a $3 million federal grant from Delta Regional Authority.

“During the meeting, Electrolux reiterated my comments from yesterday that a tough global economy, rising tariffs and losing a major product retailer has had a significant impact on its business,” Strickland said. “We made our expectation clear that our number one priority was taking care of the employees that will lose their livelihoods. In addition, we asked for the land and buildings to be returned to the citizens who paid for them. We will keep the lines of communications open and continue to work towards a resolution to the benefit of Memphis and Shelby County.”

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.

Burgess estimated the plant’s closure would cost Shelby County $3 million in tax revenues, and $2 million for the city. The property on which the Electrolux plant sits in southwest Memphis was given to the company, he said.

Reid Dulberger, CEO of EDGE, said the board had learned a lesson with its generous incentive package to Electrolux.

“I think we have known for a while that if we make that decision, to play in the game, to be aggressive, we can do so in a way that provides a little more protection for the community than perhaps we’ve done in the past,” Dulberger said Friday.

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