HomeServe USA To Expand In Chattanooga; Will Create Nearly 200 New Jobs; Firm Asks City For PILOT Tax Break

HomeServe USA officials announced Tuesday that the company will expand in Chattanooga, investing $5.5 million to construct a new building for its customer service operations in Hamilton County. The expansion will create nearly 200 new jobs over the next five years, officials said.

HomeServe, which is located on Perimeter Drive near the I-75 East Brainerd exit, will build the addition some two miles away on Lee Highway across from St. Stephen's Church.

HomeServe officials went before the City Council on Tuesday afternoon asking for a $174,559 tax break over a five-year period.

Charles Wood of the Chamber of Commerce said it was the first PILOT to go to the city in over a year. He said four projects last year went forward without one, but he said it was felt this one was warranted.

He said, "My friend Helen (Burns Sharp) asked if we at the Chamber "offer a cup of coffee and a PILOT to guests." He said it is much more stringent. 

The firm will have a 100 percent exemption the first year, 75 percent the second, 60 percent the third year and 50 percent the final two years before going to full taxes. All along, it would pay the school tax and an economic development fee.

Councilwoman Carol Berz called it "a no brainer," saying it was not a large request and said it would provide the type of jobs the city has been seeking. Officials said pay would be $17 per hour for production workers, which would make up the bulk of the new employees.

The state and TVA are also providing incentives, it was stated.

Mr. Wood said the city is competing against many other locations that offer high incentives. He said Southern Champion Tray was persuaded to build a plant at Mansfield, Tex., near Dallas, by a $910,000 cash incentive. 

Councilman Chip Henderson said he would like to see requirements in place that the company hire some employees from parts of the city that are economically deprived.

Councilman Ken Smith said his concern was that it may be difficult for people from low income communities to get to the new call center.

Councilwoman Demetrus Coonrod asked if the firm would build the center without the tax help. An official said he could not say it would not, but he said it was "a significant part of the decision process."

“I’d like to thank HomeServe for its commitment to further invest and create new job opportunities in Southeast Tennessee,” Governor Bill Haslam said. “Our job in the public sector is to create the best possible environment for existing and new business to create jobs in Tennessee. The continued expansion by existing employers such as HomeServe brings us closer to our goal of making Tennessee the number one location in the Southeast for high quality jobs.”

“There’s no better vote of confidence in Tennessee than when an existing company decides to create additional jobs in one of our communities,” Commissioner Bob Rolfe said. “HomeServe’s expansion is a prime example of the private investment that will enable the continued growth of Tennessee’s economy and the creation of new jobs for our residents.”

HomeServe offers homeowners monthly plans to cover major household repairs from plumbing and electrical to heating, cooling, and appliances. HomeServe partners with many of the nation’s leading utility companies and municipalities to provide coverage plans to more than 3 million homeowners, officials said.

“Chattanooga is home to our largest contact center employee group. Our dedicated employees at the center deliver award-winning customer support, which is key to our business operations,” Tom Rusin, CEO of HomeServe, said. “We are thrilled to expand our growth in Hamilton County and remain appreciative of the support we receive from the State of Tennessee, Hamilton County, the City of Chattanooga, the Chattanooga Chamber of Commerce, and the Tennessee Department of Economic and Community Development.”

Serving customers since 2003, HomeServe has operated in Chattanooga since 2010. Today, HomeServe has 320 employees in Chattanooga. The company has outgrown its existing space and will build a nearly 46,000-square-foot facility, which is expected to be operational by March 2018.

“With this expansion, HomeServe will create close to 200 good, middle-class jobs right here in Chattanooga, bringing its local workforce to over 500 strong," Chattanooga Mayor Andy Berke said. "Today's announcement provides another example of an excellent company choosing to both invest in our city and grow our local workforce."

“HomeServe has been a wonderful partner in our business community for more than six years now,” Hamilton County Mayor Jim Coppinger said. “We congratulate HomeServe on its growth in Hamilton County as it continues to provide award-winning customer service from Hamilton County.”

“We’re proud of the work we do at the Chamber every day to create jobs for our community,” Bill Kilbride, president and CEO of the Chattanooga Chamber of Commerce, said. “We applaud HomeServe’s growth and investment in our region.”

“Congratulations to HomeServe USA on its decision to expand and build a new facility in Chattanooga, Tennessee,” TVA Senior Vice President of Economic Development John Bradley said. “TVA and the Electric Power Board of Chattanooga are privileged to partner with the State of Tennessee, the Chattanooga Area Chamber of Commerce, the City of Chattanooga and Hamilton County to support existing business and industry growth.”

Helen Burns Sharp of Accountability for Taxpayer Money said, "The local press reported today on the expansion of the local HomeServe USA office. According to the news release, the company plans to construct a new office building for its customer service/call center operations because they have outgrown their office space on Premier Drive in East Brainerd. They sell home service repair service plans across the U.S. for water, gas, electrical, HVAC, etc. (Similar to what AAA does in the area of emergency road service.)

"The Chamber of Commerce will present a PILOT application to the City Council this afternoon. (PILOT stands for "payment-in-lieu-of-taxes.) If it is approved at a future meeting, it would reduce the amount of property taxes the company would pay. The tax break request was not mentioned in any of the news coverage.

"Accountability for Taxpayer Money (ATM) is a public interest advocacy group that focuses on the wise expenditure of taxpayer dollars and transparency in government. We believe that the city and county need PILOTs in their economic development toolboxes but that they should be reserved for projects with significant public benefit that would very likely not happen without the tax break. (This is called the "but for" test.) This application raises several "yellow flags" for ATM with regard to public benefit and but for.