Gestamp plant director Corey Young on Tuesday afternoon elaborated to members of the Chattanooga City Council on details about the newly announced metal pressing facility to be constructed on the Volkswagen campus as well as the planned expansion to the existing Gestamp facilities at Enterprise South in seeking a $13.5 million PILOT (payment in lieu of taxes) tax abatement.
He said that in the past six years that Gestamp has been located in Chattanooga, the company has not only fulfilled its promises to spur economic growth in the area, but has surpassed expectations by investing more, employing more people, and maintaining a higher average wage than originally forecast.
In his presentation, Mr. Young said that since coming to Chattanooga, the firm has hired 70 more employees than expected, and maintained an average wage that is approximately $6,000 more than expected at $44,882. This was good news for legislators since the new plant is expected to add more than 500 jobs after the construction of the new plant.
He also said that Gestamp plans on continuing to invest in the community by providing opportunities to the public and schools for individuals who may be interested in pursuing a career at the company. By hosting open houses, attending job fairs, and giving tours of their facilities at Enterprise South, Gestamp hopes to help train an upcoming generation of potential employees in the community.
Mr. Young also emphasized that opportunities are available at Gestamp for all interested individuals, regardless of education level, even if one has not finished high school. Gestamp also offers a tuition reimbursement program to its employees who are interested in pursuing higher education.
While the numbers with the projected economic impact on the Chattanooga area seem good, some council members questioned why the presentation had only been handed to them that day after the announcement and asked the representative from Gestamp if the project would happen without the PILOT program.
Council member Chris Anderson said, “If it’s going to happen anyway, why do the PILOT?”
Joe Conner, an attorney at Baker Donelson who has been working closely with Gestamp, said that this is has been a tremendously complex project and that negotiations have been on the table since the fall.
He continued, “Three months ago, Gestamp didn’t know if they had a contract with Volkswagen. Three weeks ago, I didn’t know if this project was going to be in Chattanooga or not.”
He also said that several important legislators in Tennessee had been heavily involved in trying to make the plant possible. He said Senator Bob Corker had been making several calls to the Gestamp President and CEO Francisco Riberas over the past several weeks to get him to come to the announcement, something that he would not have been done if the project was a sure thing.
Mr. Young added that moving forward with the project made sense because Gestamp is a quality company that has made good on its promises to the community and that cooperation would allow them to continue to expand business, growing with Chattanooga.
In response to the presentation, Council Member Moses Freeman thanked the representatives from Gestamp for their work and the company’s contributions to Chattanooga.
He said, “I consider Chattanooga as being married to Volkswagen, and you come in close as an in-law.”
He also said that more than 20 years ago, Chattanooga had developed a vision to attract industries like Volkswagen and Gestamp to the area in order to replace companies that had left decades prior. This would be done by offering any incentives or money possible in order to develop an economic engine that would drive the community.
The plan and resolutions to approve the Gestamp expansions that were presented to the council will be reviewed and voted on in the scheduled meeting on June 30.
A presentation was made to the Hamilton County Commission on Wednesday morning, and Commissioner Tim Boyd said it was the type of large job-generator that the tax abatement program was designed for.
Charles Wood of the Chamber of Commerce said it had been a very complex project that required bringing in big guns Bob Corker and Bill Haslam for a "full-court press."
He said the site is currently not on the tax rolls and would deliver $5 million in new school funds.
It is a 10-year abatement that is at zero payment the first year, 75 percent the second year, 60 percent the third year, and 50 percent the fourth year on to the 10th and final year.