This story was updated Monday, Sept. 23, 2019, at 7:30 p.m. with more information.
Eight years after the Chattanooga Housing Authority closed one of the city's biggest public housing projects, a Japanese automotive paint manufacturer plans to begin building a $61 million plant next year on part of the abandoned site.
It is the largest manufacturing project to locate in East Chattanooga in more than a century.
Nippon Paint, one of the world's biggest paint and coatings companies, said Monday it will use nearly 30 acres of the 45-acre Tubman site for its new 270,000-square-foot factory. The plant is expected to create 150 jobs over the next five to seven years and should be in production by 2021 to supply the $1.6 billion Toyota/Mazda auto plant being built 100 miles to the southwest in Huntsville, Alabama.
Chattanooga Mayor Andy Berke said the Nippon project will provide a significant boost in East Chattanooga as the biggest new manufacturing employer in the area since the hosiery textile mill that became Buster Brown opened in 1917.
"We know that one of the most important things to rising out of poverty is how long it takes you to get to work," said Berke, who has pushed the city to spend nearly $9.5 million over the past six years to acquire, clear, maintain and clean up the former Tubman housing site. "When a good job is around the corner, you have a better chance to pay your bills and rise out of your economic circumstance. Unfortunately, there are not those places in East Chattanooga and Avondale."
Nippon Paint, which is based in Osaka, Japan, has strong ties to Japanese automakers such as Toyota and Mazda, and its U.S. subsidiary is working to expand in the North American market.
"The new manufacturing facility in Chattanooga is a key component of our strategic expansion plans for the Americas," said Tetsuruo Fujita, the CEO of Nippon Paint USA Inc. Fujita said the Chattanooga site was selected from four finalists across the South.
Fujita said the new plant will be the company's first LEED (Leadership in Energy and Environmental Design) certified factory and will bring Nippon's E-coat production to the United States. It will supply the new Huntsville plant, which will make both Toyota Corolla cars and Mazda crossover SUVs.
With $5.5 billion in global revenues, Paint & Coatings Industry magazine ranked Nippon Paint as the fourth largest paint manufacturer in the world.
The plant site has rail access, and a new truck entry way will be developed off of Sholar Avenue to limit additional traffic in the nearby neighborhood, Berke said. The city of Chattanooga will give the property to Nippon and the company will receive more than $1.1 million in a state Fasttrack grant to assist in construction costs.
1953: First phase of Harriet Tubman complex completed
1963: Expansion grows size of complex
2005: Chattanooga Housing Authority demolishes 10 buildings
2012: CHA evicts residents, puts complex up for sale
2013: Lakewood Realty Group agrees to buy site for $2.8 million, but the deal is never closed
2014: The city acquires the 440-unit complex and begins demolition
2019: The site is rezoned from residential to manufacturing in January. In September Nippon Paint announces plans for 150-employee plant
In its request for the state aid approved last month by Hamilton County commissioners, the county estimated the 150 new jobs created by the paint plant will pay an average wage of $22.63 per hour. Berke said wages at the plant will range from $13-$31 per hour, with the majority being $16-$22 an hour.
Berke said Nippon, like many Japanese manufacturers, wanted to locate in a neighborhood with a nearby labor force.
Within a half mile of the site, there are 663 households and 28.5% of the population in the neighborhood does not own a car. Berke said Nippon and the jobs and tax revenues it will generate in the area have the potential "to change many lives and to help this entire area."
Ken Smith, president of the Avondale Neighborhood Association, welcomed the new investments which his group has been working to promote since the former Harriet Tubman housing project was closed in 2012.
"Everybody wanted to see a change come to this community and we sought to see a sustainable investment in this area," Smith said. "Nippon Paint is that sustainable investment in this community."
Despite opposition from the local Unity Group and a citizens watchdog group known as Accountability for Taxpayer Money, the Chattanooga City Council voted unanimously in January to endorse the rezoning of the former housing project for manufacturing use to help recruit Nippon to Chattanooga.
Several East Chattanooga residents and community groups asked earlier this year that the city hold off on the manufacturing rezoning until the planning process for the area was completed. Others have said they want to see the Tubman property zoned for a mix of retail, housing and light manufacturing, which the staff at the Chattanooga-Hamilton County Regional Planning Agency had once suggested for the area.
Local activist groups, including Hope for the Inner City, have urged the city to require any buyer of the site to sign a community benefits agreement specifying how the local community will gain access to the jobs created by the new plant.
Chattanooga City Council member Anthony Byrd, who called Nippon's announcement "awesome for our community," said he is open to having such an agreement if the company does not employ local residents. But he said Nippon has indicated its desire to hire from the neighborhood "and it is up to us and the community to help identify those individuals who want these jobs and do what we can to help them take advantage of this opportunity."
Dr. Everlena Holmes, a Glenwood resident and activist who has helped organize East Chattanooga Neighborhood Leaders, said she thinks the Nippon announcement "is great" but she wished there had been more community involvement.
"I'm all about transparency and I wish the community would have known about this before today," she said. "The leaders in East Chattanooga need to know about this so we are all involved in the planning for this area, from the river to ridge."
Her group will meet with the staff of the Regional Planning Agency at 10 a.m. Saturday at Orchard Knob Elementary School.
About the site
Location: 1900 Sholar Ave.
Original use: The Harriet Tubman housing complex with 440 units, which opened in 1953
Size: Nearly 30 acres being given to Nippon Paint, or about two thirds of the entire 45-acre former Tubman site
City officials said they have had repeated meetings with community groups and will continue such meetings to help ensure the neighborhood benefits from the new investment. Cherita Allen, deputy city economic development director, said she has been at 14 meetings in the community where the Tubman project has been discussed "and we have tried to listen to what the community wants" for both community and economic development.
Nonetheless, the Unity Group of Chattanooga Monday urged the city to require a community benefits agreement with Nippon to ensure the neighborhood benefits, and is not hurt, by the project.
"While we are strongly in favor of economic development and policies that can help our inner city communities, particularly those that have been marginalized and for too long neglected, gain greater upward mobility to help them become more vibrant and sustainable, we renew our call for a Community Benefits Agreement," the Unity Group said in a statement distributed by its chairman Sherman E. Matthews, a former school board member. "We are concerned that often times when development and investors enter inner city communities it is often times, to the detriment, and not the benefit, of the residents who live within the community and those surrounding neighborhoods directly impacted."
Nippon will pay full property taxes on its development, which city officials said will provide more money for local schools and city efforts to work on the rest of the Tubman site not being transferred to Nippon. The rest of the site could be used for housing, retail and other development to help the community, Berke said.
The former Harriet Tubman housing project was built in 1953 and expanded in 1963. Berke said he has worked on redeveloping the former housing project since he was elected mayor in 2013.
"When I became mayor Tubman has been closed for a year and was vacant and deteriorating," he said. "It was 72 buildings boarded up, staring at a neighborhood telling local residents the government didn't care about them. That was really tragic to me."
Berke balked at the idea of reopening the housing complex with low-income housing, because he said the property could be better used for economic development to help provide jobs in a part of the city where the jobless and poverty rates are still much higher than the rest of the city.
Charles Wood, vice president of economic development for the Chattanooga Area Chamber of Commerce who helped negotiated the deal with Nippon, said the project "is part of an overall strategy to locate jobs and investment in areas that have traditionally seen disinvestment.
"Our hope with this project is that the community will be able to leverage it for additional investment and community development in East Chattanooga," Wood said.
Berke said he understands the community's skepticism about government projects in the neighborhood and broken promises in the past. Although the Tubman site has taken seven years to find a new user after the closing of the public housing project, the mayor said the Nippon announcement breathes new life into the area and complements the city's recent opening of a new Avondale Youth and Family Development center, the revitalization of the Wilcox tunnel and new sidewalks installed along Glass Street.
"East Chattanooga is rising," Berke said.
Contact Dave Flessner at email@example.com or 423-757-6340.