After helping attract a company that will assemble electric vehicle axle components for Volkswagen Chattanooga, a developer has begun work on a second Enterprise South industrial park site in hopes of landing another big project.
Site prep has started on a vacant 18-acre tract off Hickory Valley Road, where Chattanooga Industrial plans to put a 255,000-square-foot building, Jeff Londis, a partner in the company, said.
Londis said in an interview that the VW supplier project coupled with the new one are expected to represent about $50 million in new facilities, not counting equipment.
On the newest parcel, about 60,000 square feet of the planned structure already is pre-leased to a distribution business, which he declined to name.
Londis said his company is in talks to fill the remaining space, which could go to an auto-related venture or for a different kind of manufacturing or for warehouse or distribution space.
"We're in close contact with Volkswagen," he said about the 4,000-employee production plant nearby. "They know it's an alternative for a supplier."
Londis' Chattanooga company, White Oak Enterprises, earlier partnered with Columbus, Ohio-based Tenby Partners, to create Chattanooga Industrial and develop the two properties.
Last year, Sese Industrial Services moved into a 300,000-square-foot plant off Hickory Valley Road on the first tract, where the company will assemble electric vehicle axle components for VW's new ID.4 SUV. Spain-based Sese plans to employ about 240 people.
Boston Londis, business development director for White Oak Enterprises and Jeff Londis' son, said there's "a significant need" for industrial space in Chattanooga.
He said the city and county a few years ago were entertaining prospective companies, but those ended up building projects elsewhere.
"They had people coming to look, and they left," Boston Londis said in an interview.
Local government then worked a deal with Chattanooga Industrial for it to construct the pair of buildings on the Enterprise South sites.
"They like the idea of coming up here and building Class A [top tier], high-end space," Londis said.
Jeff Londis said Chattanooga Industrial first agreed to develop the 22-acre site on which Sese landed and then work on the second location. Plans are to finish the newest building in early 2023, Londis said.
He said the Enterprise South parcel is attractive because of its close proximity to Interstate 75. Also, the site is close to VW and other tenants of the industrial park, Londis said.
"We're talking to people in Switzerland and Korea," he said. "People are looking across the Southeast."
Planning a structure amid the pandemic is challenging, Londis said, adding that roofing materials must be ordered a year out. Construction costs have risen 60% in the past year, he said.
"Tenants want [the building] to be close to done or done," the developer said.
Contact Mike Pare at firstname.lastname@example.org or 423-757-6318. Follow him on Twitter @MikePareTFP.