The public recently learned of a new payment-in-lieu-of-tax (PILOT) application for a property tax abatement for Novonix, an affiliate of PUREgraphite LLC. The company plans to purchase the “Big Blue” building at the former Alstom site, create about 300 jobs, and build components for the emerging electric battery market.
PILOTs have come under scrutiny in Chattanooga in recent years, with questions raised about whether we are paying enough attention to what is a good deal and what is not a good deal. Our city and county governments are very dependent on general fund property taxes to pay for needed services, such as fire, police, streets, youth & community programs, and affordable housing. PILOTs (and other forms of tax incentives) reduce general fund revenues.
So we need to make sure that any tax incentive provides significant public benefit and meets the “but-for” test (i.e., determining whether a company would locate here without an incentive).
This company appears to meet several key aspects of the public benefit test. It would create about 300 jobs; it has the potential to create more jobs, and it would give Chattanooga a presence in the sustainability and electrification arena.
The project also appears to meet the “but-for” test. Company officials said they looked at sites in Texas and throughout the Southeast, including Huntsville, Alabama. Likely these places were interested in the project and may have been willing to offer incentives.