published Friday, October 15th, 2010

City, county to buy more land for VW

by Cliff Hightower

The city of Chattanooga and Hamilton County want to buy 34.8 acres for Volkswagen.

The city and county may buy the property from the U.S. General Services Administration for $327,000, with each government paying half. But they had a chance to buy it 10 years ago.

“If we knew then what we know now, the property would have been acquired,” said Paul Parker, the county’s property manager.

The Chattanooga City Council is expected to vote Tuesday on a resolution concerning the deal and the county will take the purchase up later.

Parker said Thursday that he was asked by Volkswagen’s attorneys to buy the land, which lies within the footprint of the automaker’s new assembly plant at Enterprise South industrial park.

“It interferes with [Volkswagen’s] development,” he said.

Parker said he understood why some might question the city and county buying property and giving it to Volkswagen when the company did not pay for any of the land in the beginning.

“It’s more of a practical matter,” he said. “Otherwise, it would have sat there in the way with no value to anyone.”

VW’s Chattanooga spokesman, Guenther Scherelis, said Thursday he hadn’t heard anything about the deal yet.

The property goes through the middle of Enterprise South, Parker said, and the federal government designated the tract in 2000 for a connector road from Interstate 75 to U.S. Highway 58.

The city and county had a chance at that time to buy the land when they bought 940 adjoining acres, he said. But they thought it would be cheaper and more convenient to let the federal government keep it and just build the road on it, he said.

Then VW chose another route for the road, so the city and county had to acquire some of the automaker’s property for that roadway.

But the local governments are contractually obligated to make sure Volkswagen has 1,300 acres, he said, and there are problems getting federal permission to use the property or install utilities, he said. So the easiest thing to do is to just buy the land and turn it over to VW, he said.

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fftspam said...

I cant wait for all the regular naysayers and poo-poo people to start screaming.

October 15, 2010 at 12:03 a.m.
Allison12 said...

Ok, I will start. It is undisputed that 1) VW is exempt from paying City/County property taxes for 30 years, and only pay the school portion, 2) VW is exempt from paying City/County stormwater fees for 30 years; 3)The City/County taxpayers issued a $30 million dollars bond for the site work, uitlities, and a VW welcome center; 4) The City/County taxpayers gave the land to VW, 5) all incoming Federal transporations funds are being spent for infrastructure improvements in conjunction with VW; 6) The City/County has not been truthful with the public about the total expenditures in other budget areas for VW spending, Chamber consulting fees, and lots of spending beyond the $30 million bond issue. VW will not have the local jobs impact that is being portrayed to the public.

October 15, 2010 at 8 a.m.
fairmon said...

This investment would be one of the few good investments our governments make. The investment in VW will provide returns to the city beyond what most can imagine. Think about all the supporting businesses building and locating here. Houses and other purchases by employees plus purchases by the businesses from local vendors. Property and other taxes and fees collected will be a windfall far beyond the VW investment to both local governments.

The national economy would benefit immensely with similar action across the country if people quit confusing the BOD of corporations over paying of CEO's and high level managers and the success of the business. The businesses are stressed by management excesses plus local, state and federal government legislation rendering them unable to complete with imports.

People complain about the high prices of domestic products and buy imports without thinking about why the prices are different. The up to 30% legislatively embedded cost in domestic products is usually more than or close to price differences. Many countries have no government imposed cost on businesses and all are less than the U.S. Keep bashing them and milking them and they will keep leaving and doing business and hiring people where they are more appreciated, wouldn't you?

October 15, 2010 at 8:02 a.m.
fairmon said...

Allison12. You support your facts plus speculation of more spending than reported with the subjective conclusion that the jobs impact will not be as portrayed to the public. Do you know what was portrayed and what causes you to reach a different portrayal?

What would you propose be done different but still attract good jobs to the area? Or, do you think muddling along with high unemployment, jobs at fast foods, quick stops, and motels making up most of those available locally?

The property tax and other increases were not necessary and result more from poor management than any other cause. City operations and to a lesser extent county operations are very inefficient and in many cases "nice to have" but not needed.

October 15, 2010 at 8:18 a.m.
Allison12 said...

VW foreign interests have no loyalities to this region. The same $30 million investment and endless taxpayer investment given to VW into small to moderate business investment would have yeilded a much greater return. VW has generated 2,000 tangible jobs at the plant, about 100 to 200 are Hamilton County residents. The jobs at VW cost the local taxpayers about $130,000 per tangible job. The secondary jobs you mentioned are purely speculative, because YOU are assuming that the workers will reside and spend in the area of Hamilton Co. and Chattanooga that made this huge investment, and not hit the road home. It does not matter, the truth about VW taxpayer investment far exceeding the $30 million bond issue willl rise to the surface. When do all of these jobs materialize?

October 15, 2010 at 10:02 a.m.
deltenney said...

It is like trying to "buy love" -- it does not work long-term. Sorry. I join the naysayers.

October 15, 2010 at 10:03 a.m.
Allison12 said...

deltenney Welcome! naysayer in Chattanooga = someone that asks questions. If you do not blindly follow and do a cheer for our property tax dollars going to VW, then you are labeled as negative.
After the taxpayers gift of $40 million in a bond issue plus all of the hidden VW spending that has occurred in other budget line items in City government, questions need to be asked about all of the 28 "Ad Volorem" tax deals brokered by the Chamber of Commerce. VW has picked City taxpayers clean, and wants $300,000 more for land, why? Because they can.

October 15, 2010 at 10:45 a.m.
camo705 said...
  • With all the great incentives that VW has received, the starting salaries are still BELOW other AUTO MANUFACTURING JOBS in TENNESSEE. I know for fact that alot of the employees are coming from outside of Hamilton county. So yea buy VW some more land!!!!!
October 15, 2010 at 1:17 p.m.
fairmon said...

The majority of the 2,000 employees are from the Chattanooga area. The proof will come if the national economy will just sputter up and is not tanked by the legislatures that also fail to understand business and the economics involved. Think past next year, It is not a one year return but within 7-10 years it is a great investment.

The area would prosper if businesses had zero local, state and federal taxes. Who actually pays taxes, fees and other government imposed cost to a business? Hint; it is included in the price of their goods and services.

I rather buy VW more property than pay 2 million dollars for an EAC department to plan and install the art and ugly sculptures around town that will have to be maintained in the future. Which has the best chance of benefiting tax payers?

The VW investment will have a better ROI than parking lots including one for free parking for TVA employees.

The city and county have sufficient unused property and subsidized businesses that could be sold to make the purchase.

October 15, 2010 at 4:50 p.m.
Allison12 said...

harp3339 approx 2,000 employees will be hired as VW employees per the MOA executed in conjunction to recieve $150 million in local incentives. The first 1,000 employees at VW were hired in August, 324 are from the Chattanooga area. That is Ok, you believe the VW and City PR like most people. I know for a fact that only 375 local have been hired to date, and 3/4 of the hiring as occured.

October 15, 2010 at 8:29 p.m.
Humphrey said...

I don't think we ought to give a foreign company (partially owned by a foreign government) money to build a factory so that we can be the workers and they can be the bosses, and so we can buy the product and they keep the profit. Chattanooga is paying to be Germany's Mexico.

October 15, 2010 at 10:33 p.m.
fairmon said...

I can see how prevailing local attitudes discourage companies from locating here and those here to leave.

I have been interviewed by many finder consultants seeking a location for some large corporations and major employers.

The majority rate Chattanooga very low on their list for various reasons. The major reasons are school, people and politics.

October 15, 2010 at 11:11 p.m.
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