Local leaders support more public industrial parks in Chattanooga area

Local leaders support more public industrial parks in Chattanooga area

February 10th, 2019 by Dave Flessner in Business Around the Region

When the military quit making TNT and shut down the Volunteer Army Ammunition Plant in Chattanooga after the end of the Vietnam War, the city of Chattanooga and Hamilton County governments were able to secure more than 6,000 acres between Interstate 75 and Bonny Oaks Highway.

After cleaning up much of the former munitions-making facility, the city and county created the Enterprise South Industrial Park in 2003 and in the next decade used the former military site to lure Volkswagen, Amazon and a variety of other businesses which now employ more than 10,000 workers.

Do you believe local government should acquire property and develop another publicly-owned industrial park to recruit more business?

Yes: 63 percent

No: 26 percent

Don’t know or no opinion: 11 percent

Source: Power poll of business, civic and government leaders in Hamilton County. Results based upon responses from 90 persons.

But among the thousands of acres the city and county once had for new development, only about 40 acres remains readily available for new industry at Enterprise South, which was by far the biggest of the half dozen industrial parks developed over the past four decades in Hamilton County. Hamilton County's second biggest publicly owned industrial park — the Centre South Riverport along Amnicola Highway on one side and the Tennessee River on the other — has only 65 remaining acres. Even that land is split in two parcels with not all of the land available for development, according to the Hamilton County Department of Real Property.

As the Chattanooga Area Chamber of Commerce prepares a new five-year strategic plan for economic development — known as "Chattanooga Climbs" — many leaders are urging local governments to once again assemble more land for another industrial park in Chattanooga.

"We don't have the speculative industrial buildings that are being built like in you have in Atlanta, Nashville or even Birmingham," said David DeVaney, president of Charter Real Estate Corp. in Chattanooga and a 30-year veteran in the commercial and industrial real estate market. "The market for buildings and land availability for industrial projects in Chattanooga is much tighter than usual and there is just not much quality industrial land still available in Hamilton County. We certainly don't have the quality industrial sites like we have had in the past in Hamilton County and I think we need to do more to create such properties to make sure we don't lost industrial prospects to other communities that we might otherwise attract."

Chattanooga's industrial vacancy rate has dropped below many of its rival cities and created more limited options for industrial expansion. A study by Avalanche Consulting found that in the second quarter of 2018, the industrial vacancy rate in Chattanooga was only 3.6 percent, or 28 percent less than the national average vacancy rate of 5.0 percent and nearly 36 percent below the Southern average for such vacancies now at 5.6 percent.

Chattanooga had a lower vacancy rate for industrial properties than rival communities in the South, including Atlanta, Nashville, Huntsville and Charleston, South Carolina.

"Our infrastructure (roads, bridges, utilities and water systems) and our built environment (housing, office and industrial sites) provide the foundation upon which our economy grows," the Avalanche Consulting study concluded. "We must continually reinvest in this backbone or deal with the consequences of stressing our systems to the limit."

Bradley County is moving to address the shortage of developed industrial sites with the development of the Spring Branch Industrial park near the Interstate 75 inter change at Exit 20. The city of Cleveland and Bradley County jointly acquired the 330 acres for the project, which is being marketed by by the Cleveland/Bradley County Chamber of Commerce as a venue for Volkswagen suppliers, industrial prospects and other businesses wanting to locate in the region and be near I-75.

Doug Berry, vice president of economic development for the Cleveland/Bradley County Chamber of Commerce, envisions a 10-year build out of the park, which has taken nearly that long to acquire and prepare for its opening later this year.

In the past, manufacturers would often option private land and develop the site themselves for new factories. But Berry said businesses today want and need to move quicker, so properties must be ready for development with utilities and roads in place.

"We're currently talking with five prospects about projects there (at Spring Branch)," Berry said. "We think Spring Branch will be a great asset for Bradley County and frankly for the whole region. We definitely see a need for this park."

Two years ago, the biggest new industry locating in the region — the $360 million Nokian Tire plant — landed in the Dayton industrial park in Rhea County, which also was developed and ready for building.

"We obviously would prefer to have new and expanding industry locate in Hamilton County, but we also benefit as a region when major new companies come in this area," Hamilton County Mayor Jim Coppinger said.

But a majority of local leaders responding to a Power Poll of business, civic and government leaders in the Chattanooga area say they want Hamilton County to build another industrial park. Among 90 leaders responding to the latest Power Poll survey by the Times Free Press, 63 percent said they favor local governments buying and developing another industrial park in Hamilton County. Only 26 percent of the respondents said they oppose local government building another industrial park.

Coppinger and Chattanooga Mayor Andy Berke have advocated trying to fill up existing sites in Hamilton County — both in public industrial parks and redeveloped sites like the former Tubman housing project in Chattanooga. But neither has yet proposed any funding to buy and develop another industrial park.

But Coppinger said the county maintains its healthy reserve fund, in part, to be ready for opportunities to enhance business recruitment and expansions in the region.

"That's how we were able to help with the Volkswagen expansion a couple of years ago, and even though VW has been given some tax breaks, VW still pays $4.3 million in annual school taxes," he said.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.