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Staff Photo by Matt Hamilton / CEO John Zeiser speaks at the new facility location at Centre South Riverport on Wednesday. Southern Champion Tray held a groundbreaking event on Wednesday, October 13, 2021.

A 94-year-old Chattanooga-based manufacturer on Wednesday broke ground on its biggest-ever expansion that's projected to eventually hold about 1 million square feet of space.

John Zeiser, Southern Champion Tray's president and chief executive officer, said at Centre South Riverport that the company plans to deliver its products weekly to every major city in America and to multiple sites internationally.

"We want to be easy to love and hard to leave," he said, citing both customers and employees.

The company, which makes paperboard packaging products including food sleeves, trays, window boxes and cupcake inserts, is investing $60 million at the Riverport on Amnicola Highway.

The new facility, to be built by Hoar Construction, will initially add more than 300,000 square feet of manufacturing space and is the first of four phases planned for the site.

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Southern Champion Tray expanding

Zeiser said SCT officials looked at building a larger facility at first, but he cited rising construction costs.

SCT plans to add more than 150 workers over seven years with the expansion. The manufacturer already employs about 800 people companywide in Tennessee, Texas and Ohio, including more than 500 in Chattanooga. The new factory on the 56-acre site is to open around December of next year, officials said.

Hamilton County Mayor Jim Coppinger said the Riverport won the project in competition with two other states.

"This is an iconic company for Chattanooga and Hamilton County," he said. "When you've got a legacy company like SCT, you want to make it happen."

The Hamilton County Commission in 2020 approved a payment-in-lieu-of-taxes agreement covering five years. SCT will pay zero county taxes the first year and then 25% in the second, 40% in the third and 50% in the fourth and fifth years, according to the PILOT. But SCT will pay the school tax portion of its property taxes for the project over the period and an economic development fee.

The city didn't participate in the PILOT, which officials said last year was believed to have been the first time Chattanooga didn't do so with the county on such a project.

Sam Wills, the state's regional director for economic and community development, called SCT "one of the foundations of Chattanooga."

"We get excited by the new penny," he said, but SCT is "the bedrock of what Chattanooga is today."

Brian Hunt, SCT's chief operations officer, said the property which sits next to manufacturer Hamilton Plastics in the Riverport has some challenges. The company received an Aquatic Resource Alteration Permit from the state for the site.

Hunt said the new air-conditioned structure will be highly automated and hold advanced manufacturing equipment.

"While our growing company had maximized all operations in three states, a new large-scale site was needed," he said.

Hunt estimated that company revenues are expected to grow between 5% and 10% this year over 2020.

Zeiser said SCT is having "a strong year" as the coronavirus has helped drive demand for its products.

He recalled that his grandfather started the company in 1927, and it was later grown by his father, Chuck, who is SCT's chairman.

In 2017 when SCT turned 90, Chuck Zeiser recalled when the company was a four-person operation.

"I've seen a world of change," he said then.

The company already has sites in Chattanooga on Compress Street and nearby on Amnicola Highway.

"SCT has been blessed to grow and thrive in this community for almost 95 years. We look forward to continuing that growth in a manner that is good for our team members and good for our community," John Zeiser said.

Coppinger said the Riverport tract is the last large parcel at the industrial park.

"This has always been my favorite piece of property," he said.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.

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