Developer Matt Phillips said Monday that work should start soon - pending final approvals - on a $102 million project at the former Dupont plant in Hixson.
Four large buildings designed for Class A Industrial Space are planned on the 88-acre tract. It will yield some 600 full time jobs, he said.
Mr. Phillips, who is partners along with Geoff Smith and Greg Wilson in Rise Partners, said the idea for the development came after he sought to find out if the spot now used for the Dupont soccer fields was available for sale.
He said Invista, which bought out Dupont and then later sold the main plant to the Turkish company Kordsa, happened to have 88 acres for sale - all but the plant operated by Kordsa.
Mr. Phillips said the far-flung property had laid idle for years and was worse for the wear. He said it was found that some sewer lines and utility lines went to dead ends.
He said there is a dire need in Chattanooga for Class A Industrial Space. He said tenants are already being lined up.
Officials said the developers plan to work with the city in extending a new greenway from North Chickamauga Creek across a section of the property along the Tennessee River.
Mr. Phillips said the county schools will get $8.2 million over the life of the TIF in tax funds off the property.
On Monday, the city Industrial Development Board forwarded an application from the Phillips group for Tax Increment Financing for the project on to the City Council.
A TIF allows for the provision of infrastructure up front, and the costs are covered later from additional taxes generated by the improvement.
City officials asked that the soccer fields be outside of the TIF.
Helen Burns Sharp of Accountability for Taxpayer Money said of the TIF application:
1. This project appears to be a good candidate for tax increment financing.
The applicant wants to create about 800,000 square feet of “class A” industrial space by building four new speculative buildings. Chattanooga lags comparable cities in the southeast in the availability of light industrial space. The applicant’s economic impact analysis projects the project could create 600 direct jobs, as well as 700 construction jobs.
The project would take place on both sides of North Access Road near the former Dupont plant. The property has been described as underutilized and aging. TIF funds would be used to replace old or mislocated infrastructure, address stormwater concerns, and improve traffic control and safety for this area.
2. This project presents an excellent opportunity to jump-start the North Chickamauga Greenway project.
The city is developing parks and outdoors plan. It will likely include a greenway along the Tennessee River from Dupont Park toward Chickamauga Dam. The applicant is willing to donate an easement on their riverfront parcel as a community benefit for the TIF project. The city already owns the riverfront property south of the soccer fields at Dupont Park. Korsda owns the other riverfront property. The city could approach them to see if they would donate or sell an easement. Parks are considered infrastructure in the state TIF statute and thus the costs associated with the greenway could be added to the project and paid for with tax increment funds.
3. The IDB should consider requiring this applicant (or any TIF applicant) to provide a performance bond or insurance to limit public risk.
This is a recommended TIF Rule from MTAS for TIF projects. Cities in Tennessee frequently seek advice from the Municipal Technical Advisory Service on all aspects of city government. The cost of premiums issued in favor of the IDB can be built into the project,
“The public risks can be high in the initial stages of the project. Ideally, the developer is committed with a development agreement or contract requiring that he undertake certain objectives and commit to spend a fixed amount of money. There are still risks. What if, for example, the project burns as soon as it is constructed, or if the developer goes bankrupt when only the pilings are set? Is the community willing to live with an eyesore funded with public dollars? Insurance or performance bonds may mitigate such losses, but the key is to have this spelled out in the development agreement and to have the ability for the public agency to take control over the project or select another developer and move to completion. All projects have such risks.” (MTAS)
4. The IDB should require the applicant to provide at its expense a Phase I site assessment report for the project and/or plan area, as authorized by the city’s adopted TIF policies and procedures. Very likely the applicants already have one.