By Richard Locker, Memphis Commercial Appeal
May 10, 2011

NASHVILLE — Electrolux is on the verge of getting $97 million in Tennessee taxpayer funding to help build its $190 million home products manufacturing plant in Memphis.

The state Senate gave final legislative approval Monday night to two bills providing a total of $97 million in taxpayer funding for Electrolux and $34.6 million for the Wacker Chemie polycrystalline silicon plant near Cleveland, Tenn. The House passed both bills last month; they now go to Gov. Bill Haslam, who has said he supports both projects.

The Electrolux deal in Memphis was the more controversial of the two because of what former state officials say is the unprecedented portion of the actual construction and equipment costs of the plant that the state is contributing to the project. The percentage of the $1.5 billion Wacker plant is far less.

Senate Speaker Ron Ramsey, R-Blountville, was particularly vocal in questioning the level of the funding, agreed to by former governor Phil Bredesen, and the absence of a “clawback” provision in the funding agreement that would refund all or some of the state’s money if the company failed to create the 1,250 jobs it promised.

But the Senate vote was unanimous and without debate, and Ramsey even added his name as a co-sponsor of the bill. “I’ve always been in favor of the project and wanted to make sure we did it properly and I believe the questions were answered,” Ramsey said.

Senate Republican Majority Leader Mark Norris of Collierville, who sponsored the bills, said the passage of the Electrolux funding marked a milestone for economic development in Memphis and Shelby County.

Memphis and Shelby County are contributing an additional $40 million to the project, mostly through tax breaks.

The bulk of state funding of both projects is being funded through a state bond issue of $106.4 million — $77 million for Electrolux and $29.4 million for Wacker Chemie. The other bill that passed Monday night contains direct appropriations from current funding of $20 million for Electrolux and $5.2 million for Wacker.

The bond bill will cost taxpayers $67 million in interest charges, in addition to the principal amount.

Harvey Kennedy, Shelby County government’s chief administrative officer, said local officials are “obviously extremely pleased” with the state’s action. “This is the final piece of the puzzle. Both the city and county appropriated their funds and we were waiting for the state money. It was unusual because it was under two different governors’ administrations and some things had to get worked out. This is big for Shelby County — 1,200 jobs inside the plant and a total of 2,250 in Shelby County, including suppliers.”

Kennedy said work on the plant is to begin within two months. “We are really indebted to Sen. Norris, who carried the water for us on this, and we’re indebted to the entire Shelby County delegation.”


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