IKEA Memphis falls short on promised jobs, asks to adjust tax deal

MEMPHIS, Tenn. — The IKEA outlet in Memphis is voluntarily giving up two years of its 11-year tax deal after the company failed to deliver the jobs and wages it promised in 2015.

The Swedish furniture and home goods retailer had agreed to hire 175 employees at its Memphis location, with an average wage of $41,011 when it received its $9.5 million PILOT, or payment in lieu of taxes deal.

According to its 2018 performance report, the company employed 147 people locally with an average wage of $36,944 at the end of last year.

In an April 4 letter to the Economic Development Growth Engine board, IKEA said it was requesting the adjustment “in order to maintain the transparency that is at the core of IKEA’s culture and values, and to uphold its commitment to EDGE, the City of Memphis, and Shelby County …”

The company noted some success in the environmental sustainability portion of its agreement. For instance, 45% of energy used at the Memphis location is generated using solar panels on the roof of the building.

IKEA opened its outlet store in December 2016 at Interstate 40 and Germantown Parkway. It is Tennessee’s only IKEA outlet and was the 43rd outlet in the U.S. when it opened.

Also on Wednesday, EDGE announced that the board approved PILOT deals for expansions at two companies:

Smuckers will create 25 net new jobs with an average base salary of $43,244 excluding benefits and invest $8.8 million at its facility at 4740 Burbank Road, producing JIF Creamy Clusters granola bars. EDGE Staff projects $1,462,267 in local total tax revenues to be received during the PILOT term.

Cleveland Track Material will create 51 net new jobs with an average base salary of $47,380 and invest $6 million at the facilities located at 391 East Mallory, EDGE said. Staff projects $2,176,616 in local total tax revenues to be received during the PILOT term.

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