City offered Lipton $3.7 million

Published 10:01 pm Tuesday, March 12, 2013

The city of Suffolk offered Lipton up to $3.7 million to stay in Suffolk and expand its operations, officials revealed Tuesday.

The grants are based upon future taxes the city expects to receive from the new equipment and building improvements, a city spokeswoman wrote in an email. The money will be paid in six installments after investments from Unilever, the parent company of Lipton.

Officials announced Monday the company would stay in Suffolk after looking at other options. It will replace aged processing equipment at the facility on West Washington Street, which opened in 1955 and packages all Lipton tea bag products sold in the United States — one million tea bags per hour and nearly six billion tea bags annually.

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No new jobs will be created immediately as part of the deal, but the company said Monday that more employment could be created in the future.

The money from the city will come from the Economic Development Investment Program and will only be provided once the equipment and investment has been verified by city staff, city spokeswoman Diana Klink wrote Tuesday.

If the equipment is installed for a particular phase, but the projected investment amount is not fully achieved, the grant amount would be prorated.

The largest portion would come in the first two phases, in which the city expects to pay out nearly $2.1 million. The remaining $1.6 million is split unevenly during the next four years.

The company also received a state incentive of $1 million from the Virginia Investment Partnership Program.