Burgess says assessment allowed Electrolux to underpay local taxes by $100 million
MEMPHIS, Tenn. —Shelby County Assessor Melvin Burgess says Electrolux has been underpaying its property taxes to the tune of $100 million, and his office intends to get that money back for the county.
That’s in addition to a 15-year PILOT the company received in 2010, which already took the company off the hook for 90 percent of city taxes and 75 percent of county property taxes, Burgess said.
Electrolux announced last week it would close its Memphis manufacturing facility and consolidate near Nashville, after receiving millions in state and local tax incentives. The company had until recently employed about 1,200, but is currently down to 530 employees.
Burgess, who took office late last year, says the problem began during a countywide reassessment in 2017. He says the assessor’s office wasn’t able to get to Electrolux’s 800-acre property and 650,000-square-foot facility in Southwest Memphis to update its value.
Electrolux property was assessed at about $39 million, Burgess said, but he believes it is undervalued by about $102 million.
Burgess said his office will reassess the property immediately, and will go back two years to adjust assessed values that he feels are in error.
He said his office will then go through other companies’ PILOTS to make sure a similar situation isn’t in those agreements.
Shelby County properties are up for reappraisal in 2021. Burgess said his office is short-staffed, but he hopes to train new appraisers to fill the ranks.
Last Friday, after a meeting with city and county officials, Electrolux voluntarily agreed to drop its PILOT tax incentives.
That means the property will be on county tax rolls at full value by March 1, Burgess said.
He presented his findings to the Shelby County Commission on Wednesday.
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.
Tennessee officials said the Swedish appliance maker won’t be required to pay back millions in state funds because there was no clawback provision in its 2010 contract with the state.