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INCENTIVES OFFERED FOR VW EXPANSION• $165.8 million grant from the state of Tennessee for costs associated with site development and preparation, infrastructure, production equipment acquisition and installation, and facility construction.• $ 52.5 million — Local government assistance to VW, split equally between the city of Chattanooga and Hamilton County, for upfront expenses for the plant addition. VW will pay back $2.5 million in an economic development fee each year for the next 10 years to repay about half of the loan and VW will transfer 300 acres at Enterprise South industrial park back to the city and county.• $12 million — State grant for training new employees• $33 million — Property tax breaks expected to be offered for $600 million expansion over the next decade• Unspecified incentives from TVA under the Valley Incentive and Valley Advantage programsAs part of the incentive package, Volkswagen Group of America has agreed to waive its right to claim certain statutorily available tax credits directly related to the expansion. VW will pay more than $1.4 million in additional school property taxesSources: Tennessee Department of Economic and Community Development, Mayor Andy Berke, Hamilton County Trustee’s office.
Volkswagen plans to invest another $600 million in its Chattanooga assembly plant and hire another 2,000 workers to start making a sports utility vehicle by the end of 2016.
More than a third of that investment will initially come from state and local governments who agreed to pump more than $230 million of upfront tax dollars into the project to woo VW into expanding in Chattanooga rather than at its other major North American plant in Puebla, Mexico where labor costs are far lower.
Combined with other property tax breaks, TVA incentives, road projects and other potential tax credits, Volkswagen could qualify for more than $300 million of grants, credits and other government assistance over the next decade, Chattanooga Mayor Andy Berke said Monday.