Arcadia-based Ashley Furniture has decided not to pursue a $6 million tax credit that the state’s job-creation agency board approved last year with terms that would have allowed the company to cut its state workforce in half.
“Our decision to no longer pursue the proposed agreement with (the Wisconsin Economic Development Corp.) will not affect Ashley’s Arcadia operations or employees,” company president Todd Wanek said in a statement. “Ashley will continue to grow in Arcadia, is committed to continuing a strong presence in Wisconsin, and will continue to meet with the city of Arcadia to assist it in finding other sources for funding its much-needed flood control project.”
The company also has decided voluntarily to return $256,706 in tax credits for a separate project that was supposed to create 225 jobs by this year.
Since January 2012, the company has created 87 positions as part of an $8 million expansion of its Whitehall operations. WEDC awarded the company $675,000 for that project in 2013.
“We take our responsibilities seriously and remain committed to growing in Wisconsin,” Wanek said, noting the company has been unable to attract the new hires needed in Whitehall.
The State Journal in August reported the availability of the $6 million in tax credits, approved by the WEDC board at a Jan. 30, 2014, closed meeting. A WEDC memo the board reviewed before its vote said the company would invest in a $35 million expansion of its headquarters and agree to retain at least half of its workforce through 2018 or forfeit the credits.
The company employs 4,500 people in Wisconsin and has added 350 jobs over the past three years, the company said Tuesday.
A contract with WEDC for the coveted enterprise zone tax credits was never finalized, and was on hold pending the U.S. Army Corps of Engineers completing its review of a local flood control project. A 2010 flood caused more than $10 million in damage.
The company planned to donate the $6 million to the city of Arcadia for the flood control project, which would have allowed the company to expand its footprint in the city of about 3,000 people.
In the statement, Ashley said cost increases and other hurdles have made the project “infeasible.”
WEDC spokesman Mark Maley said the state has a long history of working with Ashley and was prepared to assist the company with the Arcadia project, even though there never was an agreement or signed contract.
Gov. Scott Walker, who is chairman of the WEDC board, and WEDC CEO Reed Hall have declined to discuss the rationale for giving a company tax breaks without some kind of job creation expectation attached, saying they won’t discuss awards until a contract is finalized.
Both former WEDC CEO Paul Jadin and Hall have said they weren’t aware of any contracts the agency had signed that included a provision allowing the company to reduce its workforce.
The company also is facing $1.76 million in penalties from the Occupational Safety and Health Administration, which documented 1,037 worker injuries at the Arcadia plant over the past three years. The company has rejected those allegations.
Assembly Minority Leader Peter Barca, D-Kenosha, who sits on the WEDC board, said in a statement: “I hope WEDC will take this opportunity and provide assistance to companies that will add to the net jobs for workers of our state and boost taxpayer protections against companies that receive state assistance.”