Groveland seeks over $1.4M from Kroger for 'breach of contract' amid distribution center closure

Groveland seeks over $1.4M from Kroger

The city of Groveland is seeking a refund from incentives, tax rebates and fees from The Kroger Company. This demand comes after Kroger decided to close its Groveland distribution center site after four years in operation.

GROVELAND, Fla. - Groveland officials are working to recover over $1.4 million from Kroger as compensation for incentives the company received to establish a grocery distribution center in the city.

The city is pursuing a refund from Kroger no later than Jan. 30, 2026.

Groveland: Kroger is in ‘default’

What we know:

Following Kroger's decision to close its Florida distribution centers by January 2026 – causing 1,400 Florida Kroger workers to lose their jobs – Groveland is now saying Kroger is in default with their previous agreement.

Groveland City Council members are saying Kroger must reimburse all incentives they've received, including per-job incentives and ad valorem tax rebates for tax years 2022-2024.

"Kroger is ineligible to receive incentive and rebate payments for tax year 2025 and must also refund the value of impact and building permit fees the city waived as part of the agreement," the city said in a released statement.

Kroger also signed a termination agreement with Lake County, in which the company will reimburse over $400,000 to the county by the end of the year.

Lake County wants $1.3M in Kroger incentives back

Lake County officials want to recover as much of the $1.3 million in incentives given to Kroger after the grocery retailer announced it would close its massive Groveland warehouse and effectively end its Kroger Delivery service in the Orlando area.

The backstory:

Kroger's Customer Fulfillment Center in Groveland opened in 2021. The center is an automated warehouse facility with digital and robotic capabilities, also known as a "shed."

The Groveland CFC is located at U.S. Highway 27 and American Way and occupies 375,000 square feet.

Kroger CFCs are in partnership with the Ocado Group. Kroger currently has eight CFCs, with two new sites in Charlotte and Phoenix to start in 2026, the Ocado Group said.

Under this agreement between the city of Groveland and Kroger, the city said Kroger's incentive agreement includes maintaining a minimum of 60 jobs for 15 years with an average annual payroll of $3.6 million.

According to notices filed with the state, most of Kroger's employees in Rockledge, Tampa, Jacksonville, Groveland will be let go from the company on Feb. 1, due to the permanent closing of operations at multiple Kroger fulfillment and spoke centers in Florida.

According to filings, 1,403 people in these four facilities will lose their jobs.

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These employees are not represented by a union and there are no bumping rights, a Kroger spokesperson said.

Lake County seeks repayment after Kroger announces early exit

Lake County officials say Kroger’s decision to close all its Florida facilities — including a major warehouse in Groveland — is the economic equivalent of a natural disaster, cutting nearly 1,000 jobs and eliminating an estimated $1.3 million in expected revenue.

Why is Groveland's distribution center closing?

Employees impacted by the facilities' closure come after Kroger announced on Nov. 18 that they were closing three of its eight Customer Fulfillment Centers. Fulfillment centers in Groveland, Florida, Pleasant Prairie, Wisconsin and Frederick, Maryland are expected to close in January 2026, the company said.

Kroger said the three centers were not meeting its financial expectations.

In a letter sent to Kroger customers, Kroger said delivery will be ending on Feb. 1 and delivery orders can still be received through Jan. 31.

Kroger and Ocado's new customer fulfillment center – an automated warehouse facility with digital and robotic capabilities, also known as a "shed". (PRNewsfoto/The Kroger Co.)

How much money is Groveland pursuing?

Groveland released a breakdown of incentives, rebates and fees they're demanding in a refund from Kroger no later than Jan. 30, 2026. The city demanded $1,460,233.49 from Kroger for a "breach of contract," including:

Job Growth Incentive: $104,000.00
Ad Valorem Tax Rebate: $209,892.37
Value of Impact Fees: $390,603.36
Value of Building Permit Fees: $755,737.76

Kroger is also seeking money from The Ocado Group, totaling $802,917.10. The cost breakdown includes: