Volkswagen will borrow $21 million from Bank of America to build a supplier park next to its $1 billion assembly plant in Chattanooga, a VW attorney said today.
The Industrial Development Board of Chattanooga approved an agreement with the German automaker to develop a pair of warehouse and assembly buildings on 41 acres adjacent to the VW assembly plant taking shape in the Enterprise South industrial park.
"It's taken some time to get the financing arranged, but we're pleased to see the supplier park move ahead and look forward to the extra jobs it will bring," Chattanooga Mayor Ron Littlefield said.
Alex Leath, a Birmingham, Ala., lawyer who represents Volkswagen, said VW wants to finance the supplier park separate from the assembly plant to meet European accounting standards for operating the businesses as separate operations.
"The supplier park will house a number of companies, although I don't know at this point the identity of those companies," Mr. Leath said.
Volkswagen is building a 1.9 million square foot plant on 1,250 acres the carmaker is leasing from the Industrial Development Board, which exempts the project from all but local school property taxes. The plant will employ more than 2,000 workers to produce a mid-sized sedan.
Volkswagen is scheduled to close the mortgage loan with Bank of America by Thursday. The loan will be guaranteed by Volkswagen and repaid over the next six years, Mr. Leath said.
For complete details, see tomorrow's Times Free Press