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Contributed rendering by Franklin Architects / Steam Logistics plans to occupy a revamped John Ross Building in downtown Chattanooga at Fourth and Broad streets.

This story was updated Tuesday, Oct. 19, 2021, at 6:49 p.m. with more information.

Chattanooga-based Steam Logistics will create 400 jobs in a nearly $7 million expansion into the historic John Ross Building downtown where the company will shift its headquarters, officials said Tuesday.

The third-party logistics company founded in 2012 will expand to the Fourth and Broad street building next door to its existing offices where it plans to more than double its workforce, said Steam Chief Executive Jason Provonsha.

"We're growing at a fast clip," he said in an interview, adding that Steam has seen revenues climb by about 1,000% since 2019.

The company, which now employs 345 people in Chattanooga along with about 30 people in Birmingham and Minneapolis, expanded into the U.S. logistics market in April after a non-compete clause ended. for the company. Previously, Steam Logistics had served just the international sector, Provonsha said.

Also, the coronavirus pandemic has helped drive business as companies are seeking solutions to their logistics needs, he said.

"We solve complex supply chain issues," the company CEO said. "There's no shortage of those."

Jermaine Freeman, the city's interim deputy administrator of economic development, said the new jobs will average $56,000 a year in pay.

"It's a significant expansion," he said.

Freeman said Steam is expected to be offered a nine-year payment-in-lieu-of-tax (PILOT) agreement from the city and Hamilton County.

That agreement, in which Steam will pay school taxes and stormwater fees, is to go before the city's Industrial Development Board on Nov. 1, he said. Later, the PILOT is expected to be considered by the city council and county commission.

City Councilman Darrin Ledford said he expects officials to answer "the but-for test" related to how the incentives are helping to land the expansion project and to have information about clawbacks in case the company doesn't fulfill all of the PILOT agreement terms.

Chattanooga developer Noon Development will oversee the construction of the hulking, windowless four-story structure built in 1929 as part of an auto dealership that will undergo a vast refurbishing.

John Foy, Noon's chairman, said work is likely to start on the building in 2022. He said plans are to leave the structure's support columns but remove the concrete blocks in the exterior walls and replace those with large windows.

Todd Phillips, president of Noon, said "everything will be redone" inside the building where Steam will lease the entire 60,000-square-foot space. Plans are to backfill the space that's currently occupied by Steam once the company moves over.

Steve Cox, Steam's president, said the logistics market is exploding and the company is capturing that growth out of Chattanooga.

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Staff Photo by Matt Hamilton / Simon Steadman works at his station at Steam Logistics on Friday, March 26, 2021.

The company looked at both Birmingham and Minneapolis before deciding to expand in Chattanooga.

Cox said that because of the internet, logistics such as Steam does can be done from anywhere. But he and Provonsha cited Chattanooga's relatively low cost of living and its abundant outdoor opportunities.

Provonsha also said he liked the city's plans to renew the riverfront area downtown from Fourth Street to the Tennessee River.

He said the company already is hiring to try to fill open slots. That effort has been helped by trying to attract a diverse workforce, the CEO said.

Foy cited the city's ultra-fast internet as a competitive advantage and cited EPB's work to continue to improve the system.

Gov. Bill Lee said in a statement that he appreciates Steam Logistics' continued investment.

He said the company's commitment to creating more jobs will have "a positive impact on the residents of Hamilton County for years to come."

Chattanooga Mayor Tim Kelly said that with the convergence of the critical infrastructure needed to move goods in and through our region –road, rail, air, and barge– combined with Chattanooga's scenic beauty and overall quality-of-life, "it's no wonder the logistics industry continues to thrive here."

"Freight Alley welcomes Steam Logistics," he said, citing the nickname the Chattanooga area has received in the logistics and trucking sector.

Just last week, Noon Development won a zoning variance to remake the John Ross Building, which has sat empty for about a decade, from a city panel.

"It's a major undertaking," said Todd Kimling, a project manager for Noon Development, which had earlier renovated the adjacent space on the block.

Two years ago, Chattanooga businessman Joe Palmer and a partner paid $3.2 million for the John Ross Building. Palmer said then that he saw potential uses including a restaurant, entertainment venue, office space and even a boutique hotel.

But perhaps the most novel possible use he mentioned was to recapture the building's automotive past and create a place on the second level to hold exotic cars and serve as a club for enthusiasts.

A year later, a plan was floated to turn the building into a logistics industry centerpiece. FreightWaves, the Chattanooga transportation and logistics data and content company, eyed the structure as a video production studio and office space. However, that concept didn't move forward.

Nearly a century ago, the block initially held a Buick dealership. Later, the site became Newton Chevrolet, which eventually moved to Riverfront Parkway and West M.L. King.

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

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