Chattanooga planning $40 million bond for VW site work

The Chattanooga City Council will look at approving a $40 million bond within weeks that will help pay for improvements at Enterprise South industrial park as part of expenditures for Volkswagen AG, officials said Saturday.

Dan Johnson, chief of staff for Mayor Ron Littlefield, said Saturday the money will be used for new work and does not pay for work already conducted at the 1,350-acre site.

“It’s going to authorize us to start spending money,” Mr. Johnson said. “It’s just to get the ball rolling.”

The money is part of almost $500 million in incentives that federal, state and local officials plan to spend over the next several years, records show. The Chattanooga City Council will look at approving the measure at its regularly scheduled business meeting on Tuesday, Aug. 19, the city’s agenda states.

According to the agenda, the money will be used to pay for infrastructure like site preparation, sewers, railroad lines, a training center, a welcome center, a fire station and telecommunications.

Mr. Johnson said the $40 million is one portion of what will be paid for improvements at the site. The state will also pay $70 million for work at Enterprise South and the county will add an additional $40 million, he said.

Incentives to VW included a property tax break, Mr. Johnson said. He said the money to pay for the bond could be generated from the suppliers that locate at Enterprise South to service the German automaker.

“We’ll have other tax collections from the offshoots,” he said. “Our suppliers won’t get the same deal.”

Mr. Littlefield said Saturday the work would include a proposed $6 million to $12 million welcome center and a $1.5 million to $2 million fire station. The welcome center will sit off Interstate 75 and be visible from the road, he said.

“It’s a way to show of Chattanooga and Hamilton County’s progressive and environmentally sustainable way of doing business,” he said.

Mr. Littlefield said the county and VW also plan to help fund the center.

Councilman Jack Benson, whose district includes Enterprise South, said Saturday he still was gathering information about what the city will ultimately pay for VW-related expenditures. He said he had not heard yet from city officials about the bond.

“I don’t know how all this is going to play out,” Mr. Benson said. “We haven’t been given anything in writing.”

The city’s credit rating should be fine, he said.

“I think we are in good shape to borrow the money,” Mr. Benson said.