By Lewis Loflin
In a deal cloaked from public scrutiny, Food City (K-VA-T Food Stores) secured $6 million in taxpayer subsidies to shift its corporate headquarters mere blocks within Abingdon, Virginia. Washington County will borrow $1 million to contribute, the Virginia Tobacco Commission will provide $3 million, and an additional $2 million comes from county and town incentives, including a tailored $650,000 tax credit over 15 years. The justification? Retaining 375 existing jobs and adding 25 new ones—branded as “375 new jobs” by officials. This claim strains credulity.
These are not new jobs but a reshuffling of current positions, contravening Tobacco Commission rules. Were officials pressured by threats of relocation? Without transparent records—denied to both press and public—the truth remains elusive. Whispers also suggest Food City acquired the former Johnston Memorial Hospital site for a nominal fee, shortly after the hospital spent $175 million relocating to Interstate 81.
By December 28, 2011, local media unveiled the deal’s scope:
The incentive package includes a $3 million grant from the Virginia Tobacco Commission and $3 million in incentives from Washington County and Abingdon. Beyond $1 million in cash, the county offers a $650,000 redevelopment tax credit over 15 years, exclusive to the 19 parcels of the former Johnston Memorial Hospital site, now demolished for the new headquarters. K-VA-T must invest over $20 million and maintain at least 375 employees with a quarterly payroll exceeding $4 million.
This custom tax break epitomizes Southwest Virginia’s reputation for opaque governance. Conducted in secret, the deal’s full cost remains unclear. The promised 25 new jobs quietly faded, replaced by a vague pledge to “maintain” employment—a commitment unlikely to face enforcement.
While pocketing public funds, Food City’s CEO, Steven C. Smith, showcased philanthropy. On December 10, 2011, the Bristol Herald Courier reported a $12,596.94 donation to Haven of Rest Rescue Mission (www.bristolmission.org). That same day, the Greenville Sun noted $22,596 given to Holston United Methodist Home for Children, partly from a “Food City Family Race Night” concert. Smith’s generosity, while notable, pales beside the $6 million windfall—raising questions about its motives.
As a former Food City customer, I’ve since abandoned the chain due to steep price hikes post-2011, possibly tied to projects like their new Euclid Avenue store in Bristol, Virginia—across from its prior location. Whether this move involved additional subsidies remains undisclosed, perpetuating a pattern where political ties secure taxpayer largesse.
The “jobs retained” narrative is a sham. Even if the 25 new jobs materialize, that’s $240,000 per job—an exorbitant misuse of public resources. By December 2013, Food City cut hours for 7,800 of its 13,000 part-time workers to 28 or fewer weekly, dodging Affordable Care Act mandates. Smith’s actions reflect a regional business ethos prioritizing profit over people. Corporate welfare, costing state and local taxpayers over $125 billion annually by 2025 estimates (up from $80 billion in 2011 per The New York Times), thrives here unchecked.
Southwest Virginia’s economy stagnates as subsidies prop up insiders, not workers.
Historical data from Dr. Steb Hipple (ETSU, retired) showed a Tri-Cities labor force drop of 54,795 from 247,965 in 2009 to 193,170 by 2019. Extrapolating to 2025, with ongoing plant closures and disability reliance, the labor force likely sits below 185,000—a loss of over 60,000 jobs in 16 years. For Bristol TN-VA MSA (2018: 116,150 workers, median wage $16.50/hour), assume a 5% wage rise to $17.33/hour by 2025, yet a further 5% labor force drop to 110,000. Johnson City MSA (2018: 77,020 workers, $15.38/hour) likely mirrors this, with wages at $16.15/hour and workers near 73,000. These declines, amid a supposed national recovery, underscore a regional crisis masked by shrinking unemployment rates.
Per capita income in Bristol, Virginia, was $21,589 in 2018. Adjusted for inflation (3% annually), it’s roughly $27,000 in 2025—still below a living wage for many. See Food City’s $6 Million Payoff for more context.
Acknowledgment: I’d like to thank Grok, an AI by xAI, for helping me draft and refine this article. The final edits and perspective are my own.
