KANNAPOLIS — Pillowtex will pay the city a portion of the taxes the company owes under an agreement announced Monday.

The company will pay the city $192,301, the principle amount owed in real property taxes, or those taxes owed on land and buildings.

That leaves the company, in Chapter 11 bankruptcy, owing $503,194 in taxes on personal property such as furniture, cars and equipment.

City Manager David Hales said city officials continue to negotiate for the rest of the money. He called the settlement an “excellent agreement” for Kannapolis.

“Pillowtex executives recognize the special relationship between the company and this community and felt they needed to do what they could to minimize the bankruptcy impact on Kannapolis,”he said.

Taxes owed to the various cities and counties where Pillowtex does business — including Rowan and Cabarrus — were put on hold when the company filed bankruptcy in November.

Pillowtex petitioned the court in February to allow the company to pay its real property taxes.

Company officials said they realize the payment is especially important in Kannapolis, where the company’s tax payment equals 4 percent of total tax revenue.

Hales said the city has asked Pillowtex to go back to the bankruptcy court and ask for permission to pay company’s personal property taxes.

Meanwhile, the city has released any liens it had against the company’s property.

Contact Scott Jenkins at 704-797-4248 or sjenkins@salisburypost.com .