Ikea Plant Receives Virginia’s Largest Incentive Grant

Swedwood, the first U.S. factory for the Swedish furniture retailer, obtains $12 million in state incentive grant funds.

RICHMOND, Va. (AP) — Virginia has handed out $165 million in incentive grants in the past five years, with a Danville furniture plant receiving the biggest single grant.
Swedwood — the first U.S. factory for Swedish furniture retailer IKEA — topped the list at $12 million, according to a report Secretary of Commerce and Trade Patrick O. Gottschalk presented last week to the House Appropriations Committee.
''We were aware that we were one of the most significant economic development projects in Virginia during 2006,'' said Jorgen Lindquist, vice president of Swedwood North American.
Lindquist said it is important to keep in mind that the incentives were tied to a full, four-phase project and that the company is only in the first phase.
The plant is now increasing its pace to full production, Lindquist said, with one shift operational and 112 employees on the payroll. He said Swedwood should have three shifts running by the end of the year.
Swedwood expects to eventually hire 780 people and invest $281 million in the region, Lindquist said.
Danville City Manager Jerry Gwaltney said it doesn't surprise him that Swedwood topped the list.
''We were aware that Swedwood was one of the largest projects in the state in recent years,'' he said, adding that local officials helped put together the large incentive package ''because of the significance and long-term effect to the community.''
Gwaltney said that the final figure the city had on the amount of state incentives provided for the Swedwood project was $12,688,800.
The infrastructure in place at Cane Creek Industrial Park was boosted by a $6.4 million incentive package secured by state officials. The package included a $3 million grant from the
Governor's Opportunity Fund, which was one of the fund's highest grants since the program began in 1992.
Swedwood also received a $1 million grant from the Virginia Investment Grant Fund and $2.4 million from the Virginia Tobacco Commission.
Gwaltney said the project received additional Enterprise Zone grants, railroad access and industrial grants, and work force investment grants.
Lindquist said some of the tobacco grant money was paid out up front and more will be paid out as the company hires.
The company recently hired all the graduates from Danville Community College's new manufacturing technician certificate program.
''That was very helpful,'' Lindquist said, adding, ''We made absolutely the right choice to come here.''
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