Oreck Manufacturing will repay more than half of a $3 million, low-interest loan granted by Harrison County and the state of Mississippi to help establish its Long Beach plant in 1997.

The vacuum cleaner manufacturer has been phasing out the 450 jobs it once had in Long Beach. The plant officially closes in October. The plant was relocated to the company’s operation in Cookeville, Tenn.

The 450 jobs in Long Beach will be phased out from February through October 2007.

New Orleans-based Oreck was the first manufacturer to reopen along the storm-battered areas of south Mississippi after Hurricane Katrina struck on Aug. 29, 2005. The vacuum maker was running 10 days after the storm. Oreck announced the plant’s closure in December 2006, citing difficulties and costs associated with work after Katrina.

In August 2006, the company announced that its 100-employee call center in Long Beach would be closed and moved to Cookeville by October.

The Mississippi Development Authority said Oreck still owes $1.65 million on the loan. The company was given 20 years to repay the loan at $150,000 annually. Loan maturity was scheduled for Nov. 1, 2017.

The one stipulation was that the number of employees remain over 200. When the phase-out dropped employment below 200 this year, the MDA and Harrison County asked for the loan to be repaid in full.

County Attorney Joe Meadows, in a letter to county leaders, wrote that an attorney representing the Mississippi Development Bank in Jackson “has advised that Oreck has agreed to pay off the loan, in full, to settle all of its obligations.”

Tom Oreck, Oreck president and CEO, said Friday, “We are in the process of discharging any and all obligations.”

“The low-interest loan keyed on getting jobs into Harrison County,” said Chuck Mobley, MDA financial resources manager. “If you don’t maintain these jobs you are in technical default.”

MDA officials did not say what deadline Oreck was under to repay the money.

The company, founded by David Oreck in 1963, bought the 375,000-square-foot plant in Long Beach in 1997. Hurricane Katrina in 2005 heavily damaged both that plant and the company headquarters.

Oreck also makes canister vacuums, air purifiers and other home products sold at 475 retail outlets, on the Internet and by direct response.