Southern Champion Tray on Monday won property tax breaks valued at about $500,000 from Chattanooga's Industrial Development Board for the company's planned expansion in the city.
Charles Wood, the Chattanooga Area Chamber of Commerce's vice president for economic development, said the company had been considering its Dallas-Fort Worth location for the expansion as well.
"It's a legacy company in Chattanooga," said Wood about the business that was founded in 1927 and makes bakery and food packaging items.
The payment-in-lieu-of-tax agreement will run from 2015 to 2022. The tax breaks will range from 25 percent to 50 percent of what the business would otherwise pay over the seven-year period. The tray maker will pay all of the county school taxes, according to officials.
Southern Champion plans to invest $18.1 million and add at least 105 employees over three years. The business expects to have about 565 workers in Chattanooga after the expansion. The jobs will range from truck drivers to entry-level posts.
The company put the average annual wage at $45,000, excluding benefits, for the new jobs.
"I just thought that was impressive," said board Vice Chairman James Miller about the wage level.
John Zeiser, Southern Champion Tray's chief executive, said most of its workforce is from Hamilton County, and about 25 percent of employees are minorities.
At its North Chattanooga plant on Compress Street, Southern Champion Tray will add manufacturing machines including a cutter, gluer and new tray-forming equipment.
At its 365,000-square-foot Amnicola Highway site, plans are to relocate its fleet service facility on a 4-acre parcel behind that location.
"We've got a fleet of 25 tractor-trailers," Zeiser said, adding that the new facility will handle those vehicles as well as parking.
He said that plans are to use local contractors for the work.
Zeiser said that new products, added markets and more business from existing customers are fueling the expansion.
Southern Champion Tray employees work at the company's North Chattanooga plant, where they straighten boxes and maintain equipment, as shown in this file photo.He said the incentives will "slow the pace" of property tax increases from the added investment.
"Business has continued to grow," he said. "We've started to run out of space."
Southern Champion Tray sales have topped $100 million a year and Zeiser expects revenues to grow about 10 percent this year.
The company also has the operation in Texas, where it employs about 100 workers.
The third-generation, family-owned company makes paperboard packaging primarily for the food industry, while also serving other industries including cosmetic, automotive, hardware and office. It has more than 400 bakery and food service packaging items in stock.
In addition, its products include sleeves, inserts, blister cards and point of purchase displays. Zeiser said it's consistently bringing out new items to grow its business.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.