The Alstom plant is seen from the Republic Centre building Thursday, May 28, 2015, in Chattanooga, Tenn. The Republic Centre is the tallest building in Chattanooga.A Chattanooga panel agreed Tuesday to end a lease for about a half-acre of riverfront property with Alstom, but not before the deal drew criticism amid the company's plan to shut three facilities and cut 235 jobs in the city.
The city's Industrial Development Board agreed to let Alstom terminate its lease with the group so the company can transfer the land to Norfolk Southern Railway Co. for a spur line.
But panel member Jimmy Rodgers said Alstom had promised to bring a lot of jobs to Chattanooga and failed to fully deliver.
"Now, we're giving away land to the very company that didn't hold up their end of the deal," he said at a meeting of the group. "I'm not at all excited about giving Alstom property. It's difficult for me."
In June, new Alstom owner General Electric announced its plans to close the Chattanooga facilities, end manufacturing and lay off all but about 50 workers doing engineering and commercial functions in the city. Alstom invested $300 million to expand and upgrade its Chattanooga Riverfront complex less than a decade ago in hopes of a nuclear power renaissance in America. At the time, Alstom said it would expand its workforce to about 900 workers.
But only a handful of nuclear reactors are being built in the United States, while even more existing reactors are being shut down by utilities switching to cheaper natural gas amid a slowdown in the growth of power demand. Alstom failed to meet the employment level promised when the city and county granted the tax breaks to the company.
City Attorney Wade Hinton said Tuesday the panel owns the Alstom property and is leasing it back to Alstom as part of the tax incentives the city and Hamilton County have been awarding the company. He said Alstom can terminate certain parts of the lease agreement and transfer land to another party.
Hinton said the 0.61 acres Alstom wants to transfer to Norfork Southern will fully go back on the tax rolls.
"The [payment-in-lieu-of-tax agreement] said this would be abated," he said. "Now they're taking it out of the agreement."
It wasn't immediately known why Norfolk Southern wanted to build the spur.
Hinton also said the city is continuing to talk with Alstom about the future of the property tax breaks given the company's plans to close most of its Chattanooga facilities.
General Electric and Alstom are the corporate successors to Combustion Engineering, which was once Chattanooga's biggest manufacturing employers with nearly 6,000 workers in the 1970s.
The company is in the process of closing its Steam Turbine Manufacturing facility, the Boiler Service Center and the Materials Technology Center in Chattanooga by the end of this year.
"This planned action, while extremely difficult, is viewed as necessary to allow GE to manage costs and capacity in a very competitive market," the company said when it announced the plant shutdowns in June.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.