RINGGOLD, Ga. - Catoosa County Economic Development Authority officials approved a tax break Tuesday meant to help breathe new life into an old rug plant.
Shaw Industries Group Inc. won't pay any taxes for three years on some $45 million worth of equipment it plans to install to retool a plant on Industrial Drive near Interstate 75 in Ringgold to make luxury vinyl tile flooring, under a memorandum of understanding with the development authority.
County, city and school taxes on the equipment will be phased in gradually, starting in year four, until the equipment is taxed at 100 percent after 10 years. However, by then, depreciation will have reduced the equipment's value.
In return, county attorney Chad Young said, Shaw promises to create at least 90 full-time jobs by 2018 at the factory that is known locally as the 44 Shaw Plant or the old Salem Carpet Mill.
"We're glad to get some of these jobs back," development authority Chairman Randall Peters said.
Dale McCurdy, chief appraiser for the Catoosa County Tax Assessors' Office, couldn't immediately say Tuesday afternoon how much in taxes Shaw would save, due to the complicated nature of the tax break and uncertainties about Shaw's timeline to phase in all the equipment.
No officials from Shaw attended the development authority's 4 p.m. meeting at the Catoosa County Administrative Building.
According to an announcement that Shaw made in January, the company plans retool its Ringgold rug plant through 2014 and reopen in the first quarter of 2015 as a new vinyl plant, using brand-new technology. During the retooling, the "vast majority" of the plant's 400 employees were to have opportunities at other locations in the company, the announcement said then.
Foreign competition has driven down the price of rugs to the point that Shaw and other U.S. rug makers have switched to luxury vinyl tile flooring, which uses digital imaging to mimic stone or hardwood.
"The economics of the rug business today simply do not allow for future growth or encourage further investment," Shaw's Chairman and CEO Vance Bell said. "Over the past few years, we have developed a significant business and market-leading position in the [luxury vinyl tile] flooring category."
Shaw Industries Group Inc. is a subsidiary of Berkshire Hathaway Inc., a holding company run by investor Warren Buffett, one of the world's wealthiest men. Headquartered in Dalton, Ga., Shaw is the world's largest carpet-maker.
Contact staff writer Tim Omarzu at email@example.com or twitter.com/TimOmarzu or 423-757-6651.