Belgium firm's Chattanooga headquarters move wins tax incentive

photo Charles Wood

A Belgium firm that's moving its U.S. headquarters and a distribution facility to Chattanooga won property tax breaks Friday, but not before questions were raised about the deal.

Van De Wiele Inc., a maker of textile and carpet machines, received a 5-year payment in lieu of taxes agreement from the city's Industrial Development Board.

Charles Wood, the Chattanooga Area Chamber of Commerce's vice president of economic development, said the $5 million Ooltewah facility will involve sales and support of its customers. The company, which currently operates out of Charlotte, N.C., is aiming to have between 30 and 50 employees within a few years, he said.

Van De Wiele is to pay an average annual wage of at least $49,000, documents show.

"I hope it's a sign we'll see in the future - companies looking for a headquarters location," Wood said. "It's a big thing for us."

He said the value of the PILOT agreement to the company is $150,000, and there's a claw back provision in case the company doesn't create as many jobs as planned.

Board member Jimmy Rodgers asked if Chattanooga construction workers will be used to build the facility.

"Construction jobs are important, too," he said. "Short-term jobs are important, too."

Wood said he'd like to see local construction workers employed as well because that benefits the city. But, he said, specifying how the company chooses to employ builders creates a legal question.

Another board member, Breege Farrell, asked whether the board can state opinions on the agreement since it has already been approved by both Chattanooga Mayor Andy Berke, Hamilton County Mayor Jim Coppinger, the City Council and the County Commission.

City Attorney Wade Hinton said the PILOT already has been negotiated by the mayor, the Chamber and attorneys.

"The role of the board is to accept or not accept the agreement," he said.

Board Chairman James Miller said the board needs information it can review about PILOTs so "it doesn't seem to be a rubber stamp."

Helen Burns Sharp, a citizen activist, said the city and county ought to have written policies and procedures for PILOTs as well as tax-incremental funding agreements and contracts the board approves for projects such as the Volkswagen expansion.

She also said there's nothing in the PILOT committing Van De Wiele to pay the average $49,000 a year wage.

"This PILOT, like the one TIF and many PILOTs, is a tax subsidy and not a tax incentive," she said in an email to the board. "Please ask your city staff to establish policies and procedures that target incentives to companies that will make a significant commitment to investment and quality jobs and can demonstrate they would not be here without the incentive."

Nick Wilkerson, Chattanooga's deputy administrator for economic development, said the city is looking at the process of establishing policies and procedures.

Van De Wiele is one of the largest manufacturers of textile machines in the world. Chattanooga also houses competitors such as Card-Monroe Corp. and Tuftco, which all produce machines for Dalton, Ga., carpet makers.

"Chattanooga is the birthplace of tufting with a long tradition in the flooring industry," said Charles Beauduin, CEO of Van de Wiele.

The new plant is scheduled to begin operations by the end of the year, officials said earlier.

In other business, the board OKed a contract for Gray Construction of Lexington, Ky., to undertake $33.6 million in work to enlarge the Volkswagen plant's body shop, technical center and assembly finish area. A $2.2 million contingency also was included in Gray's contract related to the automaker's expansion of its Chattanooga plant to build a new sport utility vehicle.

Contact Mike Pare at mpare@timesfreepress.com or 423-767-6318.

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