MEMPHIS, TN (WMC) - IKEA will receive an 11-year tax break worth $9.5 million dollars to open a store in Memphis.
The Economic Development Grown Engine (EDGE) board approved the tax breaks Wednesday putting IKEA one step closer to breaking ground in Memphis next year.
"It's very likely the project would not be advancing, if the vote didn't go this way today," said IKEA spokesman Joseph Roth.
The tax breaks are part of a PILOT plan. PILOT stands for Payment in Lieu of Taxes. It's something that local governments use when allowing organizations to build on government-owned land. IKEA is the first retail company to ever get a PILOT from EDGE.
The deal gives IKEA more than $9.5 million in tax breaks over 11 years. Board members say the company will still pay $15.5 million during that time.
"That's what makes this project attractive to Memphis - is that we create almost 200 jobs in the $41,000 range," EDGE board member Johnny Moore said.
Memphis city council member Wanda Halbert says the council got assurances from IKEA that community investment was part of its long-term plan.
After Wednesday's vote, the board decided not to grant any other PILOTs to retailers until new standards are adopted.