Electrolux returns to tax rolls after ending incentive agreement

By Updated: March 04, 2019 5:11 PM CT | Published: March 04, 2019 4:45 PM CT

Electrolux will begin paying full taxes on the real and personal property at its Memphis plant, according to documents filed with the Economic Development Growth Engine (EDGE) of Memphis and Shelby County.

Effective Feb. 1, 2019, any amounts now due under the lease with the city and county, including “rental payments, PILOT payments and taxes shall be paid in full,” the termination letter in Electrolux’s PILOT file reads. The termination letter was signed by Electrolux on Friday, March 1.

Reid Dulberger, president and chief executive officer of EDGE, said in a statement Monday, “EDGE has been working diligently with Electrolux representatives for the past month.  It is unfortunate for all parties involved that the company is relocating.”

“Electrolux has voluntarily terminated its PILOT effective February 1, 2019; as the company indicated after meetings with both Mayors along with City/County officials. We will continue working with Electrolux representatives regarding its industrial sites located at Pidgeon Industrial Park and assisting Electrolux employees with finding new jobs as the company exits the market,” Dulberger said.

Electrolux Home Products Inc. received a 15-year payment-in-lieu-of-taxes, or PILOT incentive starting in December 2013 from the city county Industrial Development Board, the predecessor to EDGE.

The PILOT agreement required the company to pay about $1.5 million a year in lieu of city and county taxes, a discount of nearly $2.6 million from full taxes. The building and land, not including manufacturing equipment and other personal property, were valued at about $82 million in 2018.

The company announced Jan. 31 that it would be closing the Memphis facility, which makes wall ovens, and consolidating that work at a Springfield, Tennessee facility. It cited business headwinds ranging from tariffs to the closing of Sears stores that sold its products.

But Electrolux had never reached the 1,240-employee level it promised in receiving the PILOT, which was to save the company nearly $39 million over the course of the 15 years.

Last year, Electrolux shed more than half of its Memphis workforce leading up to the closing announcement.

WAYNE RISHER: Electrolux downsized staff by 55 percent in runup to closing announcement

Employment at the relatively new Memphis plant fell by 658 workers, including all 404 contract employees from temporary staffing firms, to 534 employees at the end of 2018.

At the end of 2017, the plant employed 1,192 employees.


Electrolux EDGE tax incentive

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