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.