City moves ahead with new road, infrastructure for Nippon Paint plant
The city of Chattanooga is lending its Industrial Development Board $ 4 million to extend Hardy Street into the former Harriett Tubman housing project to make way for a $ 61 million automotive paint factory and to open the way for other development in East Chattanooga.
The loan, which was approved by the city bond board on Monday, will be repaid over the next 20 years with extra taxes to be generated from Nippon Paint, one of the world’s biggest paint and coatings companies that plans to soon begin building a 270,000- squarefoot factory in one of Chattanooga’s economically challenged neighborhoods.
“In order for us to proceed with the infrastructure for this project, the IDB [ Industrial Development Board] is taking out a loan from the city [with a 3.5% interest rate] and the loan will be repaid with the proceeds from the
TIF,” Charita Allen, the city’s deputy administrator for economic development, told
IDB members Monday.
Nippon plans to employ about 150 workers in Chattanooga and will be a key paint supplier to the $ 1.6 billion Toyota/Mazda auto plant under development 100 miles to the southwest in Huntsville, Alabama.
The city gave Nippon much of the 70- acre property that housed the Harriett Tubman housing complex from 1953 to 2012 to help entice the Japanese manufacturer to locate in East Chattanooga. The area was rezoned for manufacturing last year and the city adopted a tax increment financing district in the area to allow tax revenues generated by new development to be used to fund infrastructure improvements within the district.
The East Chattanooga tax increment financing (TIF) district is the third such TIF created in Chattanooga following similar taxing zones in Lookout Valley for the Black Creek Mountain development and on the Westside of downtown for the extension of M.L. King Boulevard next to Cameron Harbor.
The incentives and publicly funded infrastructure upgrades for Nippon were denounced last year
by the conservative Beacon Center, which included the project in its annual “Pork Report.”
But another government watchdog group, Accountability for Taxpayer Money ( ACT), is more supportive of the Nippon project since it is locating in an economically depressed area of the city where a majority of local residents live in poverty.
Helen Burns Sharp, the founder of ACT who was previously critical of the tax increment financing districts created to aid luxury residential developments
on Black Creek Mountain and along the riverfront, said the East Chattanooga site is more in need of such assistance and she hopes the city property in the district can be used for more jobs, development and services for the community.
“Unlike some of the previous TIFs the city has created, I believe this project should encourage development in an area that really needed a shot in the arm,” she said.
Jermaine Freeman, deputy chief of staff for Mayor Andy Berke, said the city is “is the process of trying to resume the community engagement process for this area by meeting virtually” and he hopes to have an update on community meetings and public input into the process by the end of the month.
“We recognize we no longer live in an age where we can have 100 people meet in a gymnasium with white boards and posted and sticky notes,” Freeman said. “We’re going to have to think outside the box and find different ways of engaging folks.”
Mayor Berke has billed the area as “East Chattanooga Rising,” and previously said he would consider using some of the city property potentially for mixed housing, retail or other commercial uses that aid the community. The $ 4 million of infrastructure investment would range from streets, alleys and sidewalks to lighting, fencing and landscaping, city spokeswoman Richel Albright said.