McKee Foods got these tax breaks for its $100 million expansion

A Hamilton County panel has agreed to tax breaks for McKee Foods Corp.'s proposed $102 million expansion at its Collegedale plant.

The county Industrial Development Board approved a 10-year payment-in-lieu-of-tax agreement in connection with the $78.5 million in equipment the Little Debbie snack maker plans to install along with $24 million in improvements to its headquarters.

The company also said it would create 50 new jobs over a five-year period with annual wages averaging $43,843.

Steel is coming out of the ground to build new office space at McKee Foods Corp. as part of its $102 million expansion in Collegedale. Contributed photo

Leisa Cagle, the company's vice president and controller, said the expansion may be related to new products, which she didn't identify.

McKee Food Corp.'s new office will create about 60,000 square feet of added space for the Collegedale-based snack cake manufacturer. Contributed rendering by River Street Architecture

She said work already has started to the company's home office, which includes a conference center for employee meetings.

Under the agreement, McKee will pay the school portion of the county property tax bill each year on the improvements. In 2017, it will pay no general fund taxes related to the expansion. In 2018, the company will pay 25 percent of the tax bill, rising to 50 percent in 2020 to 2026, according to the agreement.

McKee attorney Kurt Faires said the average wage for the jobs is above the Hamilton County average.

Helen Burns Sharp, of the Accountability for Taxpayer Money citizen watchdog group, said she's hopeful Chattanooga and the county next year will look at procedures and policies for PILOT agreements.

She said she'd like for IDB members to ask if the PILOT is in the public interest and whether the project wouldn't happen without the tax breaks.

IBD member Grady Rhoden said he doesn't have enough time to study potential PILOT agreements before voting on them. He said he'd like a presentation "from people handing this to make sure we're getting what we're getting."

Quenston Coleman, another member, said he'd like to see the panel receive training, possibly bringing in technical people to help do so.

Annie Hall, who led the meeting, said she believes the technical staffers already are in place, citing board attorney Ross Schram and Chattanooga Area Chamber of Commerce employees.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.