City holds Barcalounger to lease with city

Rocky Mount city officials will not allow Barcalounger to get out of its $10,423-a-month lease with the city even though the motion chair company is closing down its production headquarters at 1450 Atlantic Ave.

Barcalounger signed the lease with the city on March 1 and it extends until Feb. 29, 2012.

“Since (Barcalounger) made the decision to leave, our position is they need to honor their lease,” Rocky Mount City Manager Steve Raper said.

Barcalounger is not keen about having to make the payments through the duration of the lease, Barcalounger chief financial officer John Braxmeyer said.

“We tried to negotiate out of (the lease),” he said. “We’ve got to revisit that.”

In April, Barcalounger announced that it was closing the 364,484 square-foot furniture plant that had been in the area since 1964.

Barcalounger Home, which manufacturers more than 600 styles of motion furniture including recliners, had entered into a shared services agreement with American of Martinsville.

As a result of the agreement, Barcalounger Home decided to relocate its manufacturing and corporate headquarters from Edgecombe County to Martinsville, Va. Barcalounger Home and American of Martinsville are both owned by Hancock Park Associates in Los Angeles, Calif.

Braxmeyer said he knows “painfully well” that Barcalounger is obliged to live up to the legally binding lease, but he hopes that another company will find the plant building enticing. The lease allows Barcalounger to sublease the building to another company.

“We’re open to anything right now. There are a lot of vacancies in Rocky Mount,” he said. “A couple of people have come through and looked at (the building). I’m not sure what companies were looking at it.”

The Carolinas Gateway Partnership, a public-private industrial recruitment agency that markets the area to businesses, has not yet been asked to help market the building to another company, said John Gessaman, the chief executive officer of the organization.

The agency has a list of empty industrial and manufacturing buildings on its Web page.

Braxmeyer said he would like to talk to the partnership about its assistance.

Barcalounger is not completely out of the building yet, but that should happen by the end of the year, he said.

“It’s just a small cut and sew operation (left in the building) and some office people,” he said. “We’re still transitioning functions to the other company.”

Braxmeyer said they could be out of the building tomorrow if another tenant wanted to occupy it.

Raper said Barcalounger’s lease payments somewhat offset the city’s losses from the plant closure, such as lost electric revenues.

But Raper said he would much rather the plant be operating.

“A major concern was the loss of those jobs, and from a company that has been here many, many years,” Raper said.