MEMPHIS, TN (abc24.com) – Taxpayers are picking up a large part of the tab for a Swedish manufacture planning to set up shop in Memphis.
Electrolux plans to break ground on a new $200 million facility in the Pidgeon Industrial Park in October 2011. The company plans to move its cooking operations to Memphis when construction of the plant is complete. When finished, Electrolux is expected to employ 1,250 people.
But to get the company to move its operations here has cost taxpayers money. Memphis and Shelby County both kicked in $20 million. The State of Tennessee contributed $97 million. If you do the math, one job will be created for $102,000 spent in taxpayer money.
“Was that the best deal that could have been negotiated? Probably not, but we need jobs,” said Shelby County Commissioner Mike Ritz. “I was willing to take the risk knowing full well we won’t be spending this kind of money, per job, in the future.”
Supporters of the project told abc24.com the added jobs will have a positive economic impact to the area. In addition to the jobs created by the Electrolux plant, suppliers will likely open shop near Electrolux and that could create an additional 2200 jobs.
“It is all the other jobs it is bringing along with it. The construction jobs, the spin off jobs that are needed to supply that industry,” said Shelby County Commissioner Terry Roland.
At least one Memphis City Councilmember is concerned about the deal. Councilwoman Janis Fullilove said there was nothing in the contract requiring the company to hire Memphians.
“We were told after the contract was signed that there was nothing in there requiring them to hire Memphians,” Fullilove told abc24.com.
The contract does state that $30 million dollars will be spent locally during the construction of the project. The state also will spend $3 million dollars for job training, though it does not specify Memphians will get hired.
Shelby County Commissioner Sidney Chism told abc24.com the deal is just the cost of doing business.
“Everyone wants the incentives. To get people to come to your city or state that’s what we have to do. I don’t think we can get away from it,” said Chism.
When complete the Electrolux jobs will pay on average, $14.64 without benefits. If the spin off jobs are created as analysts predict, it could have more than a $200 million impact on the area economy. Getting the company here, wasn’t luck, Ritz said politics was a factor.
“That was a political thing,” Ritz told abc24.com.
Ritz told abc24.com former Tennessee Governor Phil Bredeson committed the money to Electrolux to prevent it from closing its Springfield, Tennessee operations. Bredeson left office, and left current Governor Bill Haslam to follow through with the commitment.
“There would have been egg on Memphis in the corporate relocation world for years if that deal had been pulled off the table,” said Ritz.