Volkswagen gets cache of breaks in taxes

Volkswagen gets cache of breaks in taxes

March 13th, 2012 by The Knoxville News Sentinel in Business Around the Region

Tennessee Deputy Governor Claude Ramsey, left, talks with VW executive Rawdon Glover following groundbreaking ceremonies Tuesday for the new Volkswagen distribution center in Roane County.

Photo by The Knoxville News Sentinel /Times Free Press.

By Bob Fowler, Knoxville News-Sentinel

KINGSTON - Roane County dangled big incentives to land a huge Volkswagen regional distribution center, officials said after groundbreaking ceremonies Tuesday.

There's the 100 percent property tax break for 10 years, the $435,000 worth of local matches of two state grants totaling more than $1 million, and a break-even land purchase deal.

In ex-change, the company will invest $40 million in a 400,000-square-foot warehouse that will result in 45 jobs in the Roane Regional Business and Technology Park. The annual payroll is pegged at $3 million. The facility can be expanded to 600,000 square feet, officials said.

The long-term payoff, says Roane County industrial recruiter Leslie Henderson, is the cachet the Volkswagen name will lend to Roane County and the likelihood more industries will locate there because of the prestigious automaker's presence.

"We're going to promote the heck out of this," said Henderson, president and CEO of The Roane Alliance. "This will be a magnet for more projects."

"You'll see other businesses located up and down this corridor," predicted Tennessee Deputy Gov. Claude Ramsey.

Roane County offered what Henderson acknowledged were "very aggressive" incentives to become the front-runner from among 48 contenders for the VW center, including 17 sites in Tennessee.

Officials with Volkswagen Group of America said the new warehouse should be in operation by early next year. It's estimated the construction phase will result in a $10 million economic impact to Roane County.

At first, VW executive Rawdon Glover said, the center will distribute parts throughout the hemisphere for the VW Passat, now being made at the company's $1 billion plant in Chattanooga.

Some 2,700 employees there are producing 500 Passats daily.

Later, the new warehouse will provide VW and Audi parts of all types to 122 automotive dealers in the Southeast U.S., he said.

Glover said the park's location just off Interstate 40 and near Interstate 75 is of crucial importance to VW.

Roane County had to scramble to land the warehouse, Henderson said, including the purchase of additional land to match VW's needs.

"I just would not let them (VW) tell us no," Henderson said.