NASHVILLE -- Tennessee officials on Thursday will consider final approval of a proposed $5.5 million economic development grant for Spanish automotive supplier Gestamp's planned $180.1 million plant expansion in Chattanooga.
The grant, which has Gov. Bill Haslam's backing and already won approval from the governor's Department of Economic and Community Development, will be voted on by the five-member State Funding Board, which has final say-so.
Gestamp, which intends to hire an estimated 510 new workers for the expansion, is a "major supplier and a quality company," according to Clint Brewer, assistant commissioner with Tennessee's Department of Economic and Community Development.
"We're hopeful the funding board will give approval for the grant," he said. "It is an important project for Hamilton County. It is also an important project for Volkswagen and the automotive sector in this state."
When Gestamp announced its plans back in June to expand its Chattanooga operations to gear up for VW's new line of SUV production, Haslam said it "fulfills a vision we have that Chattanooga would be a major manufacturer and supplier hub."
In his letter to the Funding Board, Economic and Community Development Commissioner Randy Boyd explained the $5.5 million grant will be funneled through the Hamilton County Industrial Development Board for Gestamp's benefit.
The money will "assist the company with construction and improvements for the new facility," Boyd's letter said, also noting the project activities would not be eligible for the FastTrack Infrastructure Development Program.
FastTrack grants are designated for site preparation as well as infrastructure needs such as water and sewer lines, road and rail improvements and worker training. The Economic Development grant created by state lawmakers back in 2012 at the behest of top ECD officials, can do more.
"It can cover some things that the training grant and the infrastructure grant can't," Brewer said. "Building costs, retrofitting buildings, things related to the site."
Gestamp would submit bills for such expenditures to the Industrial Development Board for reimbursement.
In his letter to State Funding Board members, Boyd said the project "will yield a proportionately significant impact on the community due to the number of new jobs and substantial capital investment."
Gestamp has committed to creating 510 new jobs and making a $180.1 million capital investment within five years, Boyd said.
"The company will have an average wage of $17.09 per hour for the new positions," Boyd said. "This project will have an exceptional impact due to the number of new jobs being created and large capital investment being made by the company."
The five-member State Funding Board is comprised of Haslam, Finance Commissioner Larry Martin, Comptroller Justin Wilson, Secretary of State Tre Hargett and Treasurer David Lillard. Governors, however, rarely attend Funding Board meetings.
Contact Andy Sher at email@example.com or 615-255-0550.