Battery materials company eyes second Chattanooga plant as it seeks tax breaks for factory at Alstom site

Staff file photo / The former Alstom manufacturing site on Riverfront Parkway in Chattanooga is shown in this file photo.
Staff file photo / The former Alstom manufacturing site on Riverfront Parkway in Chattanooga is shown in this file photo.

An official for a company planning a new 300-worker plant in a former Alstom facility in Chattanooga said Tuesday it could put another factory in the area with about 1,000 employees.

"It will go a long way to calling Chattanooga a hub," said Daniel Deas, chief operating officer of a company affiliated with Novonix. He made the comments to the City Council as the panel discussed tax incentives for the business.

Last week, Novonix unveiled plans for a $160 million plant to develop and commercialize material for the lithium-ion battery market that will create some 300 jobs.

Novonix, a Nova Scotia, Canada-based company that opened a smaller facility in Lookout Valley in 2019, is expected to purchase and retrofit a building off Riverfront Parkway at the former Alstom site.

The planned 400,000-square-foot plant in Alstom's former turbomachinery factory, often called "Big Blue," eventually will produce up to 10,000 tons per year of synthetic graphite, according to Novonix.

Deas, chief operating officer for Novonix-affiliate PUREgraphite LLC, told the City Council that the company's new plant will use "an extraordinary amount of power" that eventually would make it the top consumer of energy in the state.

Low power rates and good labor costs are two benefits to the Chattanooga area, he said. Deas said the company also looked at locations in White, Georgia; Huntsville, Alabama; and in Arkansas, Louisiana and New York.

"When I go back and look at the incentives, that provides an incentive for us to be here," he said.

But he added Novonix may not stop at building out Big Blue. The company is looking at another facility in the area that could produce 30,000 tons per year of synthetic graphite and employ 1,000 workers, Deas said.

City Councilman Darrin Ledford said the panel is interested in growing opportunities in Chattanooga.

"I love your commitment," he said.

Under a proposed Payment in Lieu of Tax (PILOT) agreement with the city and Hamilton County, a property tax break for Novonix and PUREgraphite would range from zero to 50% over 10 years. The company would pay all of the county school taxes.

The company has the option to decide when it wants to start the incentives within five years, the agreement said. The City Council is expected to finalize a tax agreement next week.

Deas said he expected the company will be on site this year with work picking up in mid-2022 and up to capacity by mid-2023.

He added the company is talking to county schools and Chattanooga State Community College about an employee pipeline.

Novonix' product is used in making ultra-long-life, high-performance anode material for lithium-ion batteries, specifically for electric vehicles and similar storage applications, officials said.

"I think it will be an awesome addition to the Alstom facility," said Charles Wood, the Chattanooga Area Chamber of Commerce's vice president for economic development. "This is manufacturing in a sector that has a long growth curve out ahead of it."

Novonix established its anode materials business, PUREgraphite, in March 2017. Its Lookout Valley plant, where it's leasing space, employs about 35 people.

Chattanooga businessman Jimmy White purchased the former 112-acre Alstom property, now called The Bend, along with local hotel developer Hiren Desai for $30 million in 2018.

White said his Urban Story Ventures group had been waiting for a company such as Novonix. White has said the proposed redevelopment of the Alstom property could bring $2 billion to $3 billion in investments, add more than $11 million in tax revenue annually for Chattanooga and Hamilton County and spur more than 5,000 jobs.

Use of the former Alstom property for manufacturing goes back more than a century as a location for making pressure vessels, tanks, fire tubes and water tube boilers. In 2007, Alstom announced plans for a new $300 million Chattanooga plant and built the turbine manufacturing facility.

But in 2015, GE bought France-based Alstom's power operations and later announced it was closing the turbine manufacturing plant and two adjacent facilities, cutting nearly 235 jobs in Chattanooga.

Contact Mike Pare at Follow him on Twitter @MikePareTFP.

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