Synthetic Industries Corporation, which announced in mid-March it was moving to the 401 Building in downtown Chattanooga, has decided not to move there, officials said Monday.
Kemp Harr of SI said the firm is still looking for a site in downtown Chattanooga, however.
Larry Armour, one of the owners of the 401 Building, said, "I was surprised by Mr. Harr’s statement. Our lease terms and rents haven’t changed at all since SI made their announcement to move to the 401 Building.
"I understand that their build-out cost and moving expenses were more than they had anticipated, but that was not in our control. SI's move to our building, was not only significant for us, but for the entire downtown market. We are still hopeful that something can be worked out."
Mr. Harr said, "We were at about 90 percent agreement when we made the annoucement, but the floors we were to occupy needed to be fully built out so the costs for that kept escalating."
Mr. Harr said, "We are now looking for an office site in Chattanooga that will be more easily adaptable for our needs."
He stated, "SI's focus on our company, our products and our people mandates wise financial stewardship and flexibility. The costs associated with relocating to 401 Chestnut St. in downtown Chattanooga were continuing to mount far beyond our expectations. Changing lease negotiations were driving up original overhead costs to the point that they would impact future pricing and company operations. Rather than continue with plans to move to this Chestnut Street location, we are searching for downtown space that offers a more fiscally sound investment.
"We remain committed to consolidating our leadership team in Chattanooga’s downtown area where we can be closer to the economic leadership of this region. SI is focused on profitable growth and we are committed to being a long term, healthy supplier to our customers and a steady employer to our teammates and their families. Our goal is to find a new home and headquarters in downtown Chattanooga that is also a good financial decision."
Gov. Phil Bredesen and Tennessee Economic and Community Development Commissioner Matthew Kisber had come to town for the gala announcement of the move, bringing over 100 workers downtown.
The recently renovated 401 Building is at Fourth and Chestnut streets.
SI president Joe Dana announced at the time that employees would begin moving into the new offices by the end of summer.
“We chose Chattanooga for the home of our corporate headquarters because of the uniqueness of this community,” he said. “Chattanooga has a forward thinking ‘can do’ attitude from your elected leaders to your business leaders. Additionally, Chattanooga offers a tremendous quality of life to those who live here and we are excited to be a new neighbor in your business community.”
SI Corporation is a leading manufacturer of support and stabilization products with focuses in two key business segments: furnishings, which includes woven and non-woven products targeted to carpeting, furniture, bedding, automotive and recreation products; and, construction materials, which includes woven, non-woven geotextiles for construction site stabilization, highway construction, and erosion control. This also includes synthetic and steel fibers for concrete reinforcement applications.
The 401 Building includes over 30,000 square feet per floor of Class-A office space and the largest amount of space available for lease in downtown Chattanooga, it was stated.
The building is owned by Larry Armour of Armour Commercial Real Estate and Steve Dillard, of Dillard Construction of Dayton.
SI is located at Chickamauga, Ga.