Angelica, a commercial uniform and linen service catering to health-care industries, has informed Tennessee officials that a Memphis Medical District laundry will close July 3, eliminating 87 jobs. Wayne Risher/The Commercial Appeal
A uniform and linen supplier is closing a Memphis Medical District laundry plant that it began operating five years ago with the help of a local tax incentive.
Angelica Textile Services told the state it would close a laundry at 245 S. Camilla effective July 3, leaving 87 people out of work.
The notification came after Alpharetta, Georgia-based Angelica in April announced a voluntary bankruptcy reorganization and an asset purchase agreement with a unit of global investment firm KKR.
“Angelica has informed customers and employees of its plans to close its plant in Memphis,” a company statement reads. “We thoroughly considered every option for this facility and the decision to close it was a difficult one based on the Company’s business needs. We are continuing to serve customers through nearby Angelica facilities with no interruption to deliveries or service.”
The plant at Camilla and Dr. Martin Luther King Jr. Boulevard was built in 1977 to serve Baptist Memorial Hospital and later, Crothall Laundry Services.
Angelica touted a $6 million investment and eventual employment up to 110 people when it won a partial property tax freeze in 2011 from the Economic Development Growth Engine of Memphis and Shelby County.
The plant is one of 26 Angelica laundries around the country that serve more than 3,800 hospitals, clinics and long-term care facilities.
It could not be immediately determined whether Angelica is subject to repayment provisions for closing the plant while a seven-year PILOT agreement is still in effect.
The tax abatement was previously projected to save the company $634,365 in Memphis and Shelby County real and personal property taxes over its term, while generating $2.2 million in new tax revenue.
Angelica informed the Tennessee Department of Labor and Workforce Development in a May 3 letter that the plant was closing due to “continue(d) market deterioration and service issues.”
The Memphis plant is one of three proposed for closing in Angelica’s reorganization, said Harris Raynor, Southern regional director for Workers United/Service Employees International Union, which represents the workers.
The union has negotiated severance for affected workers and will work to help them find comparable jobs , Raynor said.
Angelica attributed the Chapter 11 bankruptcy filing to declining revenues due to cost-cutting in the health care industry.
In Angelica’s April 3 announcement about restructuring, company president David A. Van Vliet said, “Angelica’s operations are strong and will continue to operate as normal throughout this court-supervised process.”
An end of year compliance report to the EDGE organization said the facility had 93 workers on site.