Memphis officials gave IKEA nearly $10 million in incentives to set up shop there, but company officials reportedly can’t do what they promised.
So, IKEA officials are giving up some of their previously approved 11-year tax abatement, according to The Daily Memphian.
IKEA did not hire the number of jobs or pay the level of wages it promised city and county officials in exchange for lesser property tax payments, the website went on to say.
“As was indicated in IKEA’s most recent Annual Report to EDGE for the year-ending Dec. 31, 2018, while IKEA met the Capital Investment commitment, it was unable to meet the Job and Wage commitment,” The Daily Memphian quoted attorney Chad Wilgenbusch as saying.
“IKEA ended 2018 with 147 employees on site, 28 jobs short of its commitment to bring 175 new jobs to Memphis. Employees were making a median average wage of $36,944 at the end of 2018, $4,067 short of the IKEA’s commitment to pay employees $41,011 without benefits.”
According to localmemphis.com, the Economic Development Growth Engine, which awarded the incentives, says “process standards would reduce their 11-year PILOT by a year.”
“IKEA was originally awarded a PILOT for 11 years, 10 months for real property and 11 years for personal property. IKEA’s own projections show further shortcomings and voluntarily says they’ll give up not one but two years on their pilot.”
As Town Hall reported in 2015, EDGE, an unelected board of 11 people in Memphis, decided to grant $9.5 million in tax incentives to the IKEA corporation.
Officials with the European-based company described just how selective they are in choosing store locations. IKEA’s application revealed the company picked communities based on where it can get the most generous tax incentives.
Those areas include St. Louis, Merriam, Kan., and Centennial, Colo., according to IKEA’s application with the city, Town Hall reported.
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