Volkswagen eyes expansion in Chattanooga at Enterprise South

Volkswagen eyes expansion in Chattanooga at Enterprise South

May 30th, 2012 by Mike Pare in News

Volkswagen eyes expansion in Chattanooga at Enterprise South industrial park

Photo by Laura McNutt/Times Free Press.

Just a year after the official opening of Chattanooga's Volkswagen plant, the company and the city are making moves that suggest the potential for expansion of the factory and nearby supplier park.

On Tuesday, the city's Industrial Development Board agreed to accept $19.1 million in state funds, part of which involve regrading land next to the existing factory that has been identified for possible plant expansion.

The board also agreed to hire a company to begin planning for a new road to the supplier park and the layout of future buildings.

Jason Payne of the city's Public Works Department said nothing is imminent in terms of raising new buildings for the supplier park. But, he said, VW asked that the planning work be carried out.

"They want to get the layout done," Payne said.

The supplier park now has two 223,200-square-foot buildings, and Payne said VW is looking at four more structures.

Tom Edd Wilson, the Chattanooga Area Chamber of Commerce's chief executive, said VW and the state are finalizing earlier discussions about clearing the site adjacent to the plant to get ready for possible expansion.

"We've never doubted VW's continued interest in taking advantage of all the property," he said. "Here, they've got to get the site ready for whatever they may end up finalizing."

According to documents by engineering company Barge Waggoner Sumner & Cannon, which was hired to do the planning work, it will assess earthwork required for the new road leading to the supplier park, as well as sites for future supplier park structures and parking.

Volkswagen is considering expanding its facility at Enterprise South industrial park.

Photo by Dan Henry/Times Free Press.

Work on a new road is to start soon, connecting the supplier park to Highway 58.

Steve Leach, who heads the Public Works Department, said it will take 12 to 18 months for the regrading and site prep work to be done.

"Our responsibility is site preparation," he said, adding that the timing related to any potential expansion of the plant or supplier park is up to VW.

Laura Elkins, the Tennessee Department of Economic and Community Development's communications director, said $16.8 million of the state money is to fulfill obligations under the original 2008 memorandum of understanding between the state and VW for site prep.

She said the remaining $2.3 million is for a parking lot that was agreed upon as part of VW's recent announcement that it would create 800 new jobs. Earlier this year, VW said it would push its employee head count at the plant up to about 3,500 workers.

VW plant spokesman Scott Wilson said that, in 2009, VW agreed to delay the fulfillment of certain obligations provided in the memorandum of understanding. The Industrial Development Board's action is to fulfill those obligations and doesn't signal any imminent action or development at the plant, he said.

However, VW officials said recently they're certain the plant will be entrusted to assemble another vehicle. Currently, it makes only the Passat four-door sedan.

While the $1 billion plant will have capacity to build 150,000 vehicles a year, officials have said the factory ultimately could be expanded to produce 500,000 vehicles if VW decides to make the investment.

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