Kroger Co. has defaulted on its agreement with the City of Groveland, and city officials are demanding the company pay back $1.4 million by the end of January.
The city decided last month to seek the money it spent helping the national grocery chain open an eCommerce fulfillment center.
Kroger announced in November that it is closing the three-year-old facility, though its agreement with Groveland said it would operate for 15 years, providing at least 60 jobs. It ended up employing more than 900 people but failed to stick around.
The city wants its money back by Jan. 30.
As part of an incentive agreement, Groveland waived building permit fees and offered tax rebates to Kroger.
“Failure of Kroger to maintain substantial operations at the project site constitutes a material breach in the agreement,” said Tim Maslow, the city’s Community and Economic Development Director, during a December city council meeting. “In other words, there is a claw-back mechanism.”
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Kroger announced on Nov. 18 that it would be closing the facility at Ford Commerce Park by Feb. 1. The closure is set to impact about 935 on-site employees and nearly 500 others, many of them delivery drivers, stationed in Jacksonville, Rockledge and Tampa.
“We are deeply disappointed by that decision and the impact it has on workers,” said Mayor Keith Keogh in a newsletter. “We have an obligation to protect taxpayer dollars and enforce the agreements that were put in place.”
In addition to paying back the city, Kroger is ineligible to receive incentive and rebate payments for tax year 2025.
Kroger will be required to reimburse $104,000 in job growth incentives, $209,892.37 in ad valorem tax rebates, $390,603.36 in impact fees and $755,737.76 in waived building permit fees for a total refund of $1,460,233.49, the city said.
Requests for comment from Kroger were not returned.
British online grocery company Ocado, who worked with Kroger and Groveland to provide technical aspects of the eCommerce facility, also received an incentive package and incentive payments from Groveland totaling $802,917.10. According to Groveland officials, discussions with Ocado officials are ongoing.
In December, under a termination agreement the company signed Lake County, Kroger agreed to pay back $460,714.53 in incentive and impact fee rebates to the county. Kroger also agreed to forgo its 2025 incentive and rebate payments, expected to total about $400,000.
Some of the 2025 money that was earmarked for Kroger will now be used to pay tuition and other costs for local, soon-to-be-out-of-work, Kroger employees who want to attend Lake Sumter State College, Lake Tech College or other job training programs, county officials said.
