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Chattanooga gives Alstom Power $21 million tax abatement lasting 17 years

By: Mike Pare
(Contact)

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Brad Vandehei

Alstom Power Turbomachines on Thursday won property tax breaks worth $21 million for its planned Chattanooga operation.

The tax incentive package is believed to be one of the richest ever awarded in Hamilton County.

In 2005, BlueCross BlueShield of Tennessee received tax breaks estimated at $36.8 million for its new corporate campus.

The city’s Industrial Development Board approved the tax breaks for Alstom’s planned $265 million investment in the city.

The company said it plans to hire 300 workers, with pay averaging at least $75,000 a year.

Brad Vandehei, the company’s finance director, said people will be hired from outside the city early in the project, including from Germany and Switzerland. But, he said, the majority of the jobs will go to local workers.

The board approved a payment in lieu of tax agreement for 15 years. The company will receive a 100 percent reduction in taxes the first year, according to the proposal.

For the remaining 14 years, the company will pay only school taxes, which amount to 29.2 percent of the total amount of real and personal property taxes, according to the board.

J.Ed. Marston, the Chattanooga Area Chamber of Commerce’s vice president of marketing, said the estimated $21 million in tax savings actually will be over 17 years.

He said the project is set up in three phases, and the tax breaks are done on corresponding 15-year schedules.

Mr. Marston said that not only is Alstom’s investment big, but it will create new construction jobs and high-paying permanent slots — money that will ripple through the Chattanooga area.

“It goes through the economy and is added jobs for small business,” he said.

Alstom will make steam and gas turbines as it seeks to capture business related to nuclear and fossil power plant construction in the United States.

The jobs will be added to Alstom Power’s 600-member work force at the Riverfront Parkway operation that focuses on replacement components for coal-fired power plants.

Mr. Vandehei said plans are to hire engineers, office and general labor-type employees.

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