KINGSPORT, TN (WJHL) – While another company considers buying the assets of the now bankrupt Pure Foods, $1.2 million in state grant money hangs in the balance.
According to a contract Pure Foods signed with the Tennessee Department of Economic and Community Development in 2015, the company agreed to create and maintain more than 215 jobs by 2022 or pay back some or all of the state grant money it received.
The Kingsport specialty snack maker recently filed for Chapter 11 bankruptcy. Another company could buy Pure Foods’ assets as early as Thursday, according to a company attorney. However, other potential buyers could also spark an auction next week.
The company expected to create 273 jobs, but instead the workforce peaked at just under 70, according to Networks Sullivan Partnership CEO Clay Walker.
Despite the imminent end of Pure Foods, Walker says he is optimistic a new company will soon take control.
“I’m not going to bet on 273 jobs with the companies, but they’re somewhere in between 100 and that 273 number, and more stable,” he said.
The question, however, remains if that company will also take ownership of Pure Foods’ agreement with the state.
“We’re very interested in what the outcome will be and if there’s a position there for us to be supportive, we will continually maintain that,” TNECD Chief Operating Officer Ted Townsend said. “In this case, we’re monitoring it very closely.”
Townsend says the state will base its next steps on what bankruptcy court decides about the sale, but Townsend says the main priority is ensuring jobs are created.
“We’re not approaching this as being punitive,” he said. “We want to see something successful come out of this situation. The most important thing is that the job creation occurs, based on what our expectations were, that the taxpayer is protected on that and that we see local investment there.”
Walker says it’s too soon to draw any conclusions about this site long-term.
“We’re going to have jobs in the building,” he said. “We’re going to have a great company in the building. I’m really going to be shocked if that’s not the final story here.”
Regardless how the story ends, he maintains economic development leaders did not make a bad deal.
“We don’t do bad deals,” Walker said. “It doesn’t mean you don’t take risks. That’s a part of economic development.”
An attorney for Pure Foods says its pending sale is contingent on the buyer reaching an agreement with the state about this issue. However, other companies may come forward in the days ahead with competing bids, he said.
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