Attorney General's News Release

December 23, 1999

IKON pays $500,000 to state to settle Nixon's suit for breach of block grant terms

Jefferson City, Mo. — Attorney General Jay Nixon today announced that IKON Office Solutions will pay $500,000 to the Missouri Department of Economic Development to satisfy the terms of a 1997 state block grant in connection with a representation by IKON that it would create 100 new jobs at a new facility in Jefferson City. Nixon filed a lawsuit in October against IKON after the decision was made not to build the new facility.

The Department of Economic Development approved a $500,000 community development block grant to the city of Jefferson City in 1997 for infrastructure developments in connection with IKON's proposed building site for its remanufacturing and distribution center. IKON represented that it would invest $2.5 million in this new facility, which was never built.

"Missouri taxpayer money should not be used to finance businesses that do not uphold their obligations to the state. Certainly, Missouri should not let a company off the hook if things don't work out," Nixon said.

IKON officials signed a participation agreement in connection with the grant in which they agreed to employ 100 additional persons at the new facility over the next two years, with at least 51 of those jobs to go to people from low and moderate incomes. IKON also agreed to maintain a total of 246 jobs in Jefferson City for a five-year period.

"When the state uses taxpayer money to stimulate economic growth in the private sector, it has the right to expect that the specific results contracted for will be produced," Nixon said. "It is unfortunate that the state was compelled to file this lawsuit, but we now are satisfied that this payment brings this matter to a close."

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

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