Facebook Twitter

Albertson’s flays Utah

State’s demand for $3.5 million called excessive

SHARE Albertson’s flays Utah

Albertson's Inc. has launched a public counteroffensive to Utah's efforts to get it to repay part of a $3.5 million grant.

American Stores received the money to expand in Utah before Albertson's acquired the company in 1999.

"It is more than a little ironic that at the same time the state of Utah is trying to attract new business investment, it is threatening to sue a company that has made a huge, multimillion-dollar investment in Utah," Albertson's spokeswoman Jenny Enochson said in a statement.

The state acknowledged it is preparing a lawsuit seeking repayment from Albertson's.

"This is not about not liking Albertson's," said David Winder, executive director of the Utah Department of Community and Economic Development. "It's about an obligation the company has to the state."

At issue are cash payments totaling $3.5 million from the state's Industrial Assistance Fund made in 1995 to American Stores on the condition that it build a corporate headquarters and employ more than 1,600 people in Salt Lake City, plus buy goods and services from Utah vendors.

Payments from the IAF are considered grants if recipients meet certain contractual requirements, and firms that do not meet those requirements must repay all or part of the money they get, Winder said.

American Stores built a 620,000-square-foot high rise in downtown Salt Lake City. But just six months after it dedicated the 24-story building, Albertson's announced plans to buy the Utah company and soon began to transfer or lay off more than 800 people working in the building. In May, Albertson's sold the building for $78.5 million.

American Stores did not fulfill its promises, and the money the state paid must be repaid, said Winder.

Enochson said Albertson's tried to pay $150,000 — what it believes it owes the state to settle the matter — but its check was returned.

"We returned the check because we believe they owe many times more than that," Winder said.