Volkswagen Leases 30,000 SF in Downtown Chattanooga

According to a number of news outlets, Volkswagen Group of America has leased space in downtown Chattanoga. WTVC reports that VWGA announced today that it has signed a lease for approximately 30,000 square feet of office space at Chestnut Tower in downtown Chattanooga. The space will be used for the plant leadership, purchasing and other administrative support functions. Volkswagen will retain its office space on Discovery Drive, which will be reoriented to support positions more directly related to plant construction.

Other reports:
Chattanooga Times-Free Press
WDEF
The Chattanoogan

Chestnut Tower
Google Maps
Streetview Google Maps
Microsoft Maps Live
Microsoft Maps Live Birds Eye Aerial

Arts and Culture as an Economic Development Strategy

Earlier this week, the Michigan Municipal League in partnership with the Department of History, Arts, and Libraries (HAL) at the Detroit Area Library held a training seminar titled “Arts and Culture as an Economic Development Strategy” featuring keynote speaker Robert McNulty, the founder and president of Partners for Livable Communities.

McNulty used Pittsburgh, Pennsylvania and Chattanooga, Tennessee as examples of what happens to a community when money is invested in cultural activities. Both cities were turned around positively through the investment of capital, leadership, innovation, and hard work. He noted that culture and the arts are assets to help achieve the goals of a livable community, and libraries can assist because of their unique ability to change according to community needs.

For the complete story, check the Detroit Area Library Network site.

Crye-Leike scraps plans for office building in Huntsville, AL, acquires agency in Fayetteville, TN

According to the Huntsville Times, Crye-Leike Realtors has scrapped plans to construct a three-story office building on the former Copeland's restaurant site, blaming the economic downturn.
The property is now offered at $1.85 Million.

According to the article, written by Steve Byers, company spokesman Mike Machak estimated that Crye-Leike sales are off about 30 percent so far this year. The company reported 2007 sales of $5.7 billion.

The article also reports from Machak that the company recently acquired Farm and Home Real Estate in Fayetteville, Tennessee, and plans to convert the 14-agent firm into a Crye-Leike office by Dec. 1.

UPDATE 11/14/08: 

If you desire representation in considering a purchase of the the former Copeland's restaurant site, contact Herman Walldorf & Co., Inc., 

or you may contact the owner directly:

Rob Hatchett

Regional Vice-President

Crye-Leike

Office: 423-892-1515

rob.hatchett@crye-leike.com

For information about restaurant sites in the Chattanooga area, follow this link.

Chattanooga: Planners OK downtown theater plans

Jason Reynolds, reports for the Chattanooga Times Free Press that Regional planners on Monday approved rezoning plans for the downtown Chattanooga movie theater that will replace the Bijou, though not without questioning the readiness of the design. The new 12-screen Carmike Cinemas will be at Broad and Third Streets. The back of the theater, with emergency exit ramps, will face the Creative Discovery Museum, on Chestnut Street.

For the complete story, click here. For information about Chattanooga retail space, click here.

Summit and Bridgescale Buy VIPGift

VIPGift, LLC, a leading provider of corporate and consumer incentive programs and prepaid card solutions to clients across the United States, announced today that it has received a majority investment from Summit Partners, a private equity and venture capital firm that has raised more than $11 billion since inception, and Bridgescale Partners, a late-stage venture capital and private equity firm.

“Summit Partners targets privately held companies — such as VIPGift — that have bootstrapped their businesses to profitability and established leadership positions in their industry. VIPGift’s brand equity and reputation for great customer service is second to none in the incentive industry. We are pleased to partner with VIPGift and help the company to continue extending this leadership position,” said J.J. Kardwell, a Principal with Summit Partners.

“Bridgescale Partners invests in category leading private companies in rapidly growing markets. VIPGift is the leader in the fastest growing segment of the prepaid market, with a strong track record of product innovation and customer service,” said Rob Chaplinsky, a Managing Director with Bridgescale Partners.

Press release

Miscellaneous

New Details on the Volkswagen that Chattanooga Will Build

WDEF-TV

VW pushes unveiling of concept car from LA Auto Show ths month to Detroit Auto Show in January amidst contradictory reports about the car's platform

Motor Trend

Fannie Mae home inventory from foreclosures equal to owning all homes in Chattanooga

Reuters

Nathan Lindley To Operate New Restaurant At Warehouse Row

The Chattanoogan.

NOTE: Lindley was co-founder of the St. John's Restaurant.

For information about Chattanooga Commercial Real Estate follow this link.

Volkswagen already talking about expansion in Chattanooga

The Chattanooga Times-Free Press reported this weekend that Volkswagen is already considering expansion the announced production capacity at the Chattanooga, Tennessee facility currently under construction. The article by Mike Pare reports, "The expansion would include more paint and press lines and expanded body and assembly shops, which would allow VW to double production from 150,000 vehicles a year to 300,000. The expanded facility would have the potential to produce 595,000 vehicles a year, the documents show."

The conclusion is drawn from information contained in Volkswagen's air quality permit application as presented to the Chattanooga-Hamilton County Air Pollution Control Bureau. The Parties assume that the application could be designed to keep VW's options open, and would therefore not represent concrete plans. Nevertheless, the news cannot be viewed as anything but good for Chattanooga.

For the complete story, click here. For information on the Chattanooga commercial real estate market, follow this link.

"We're No. 2!"

The state of Tennessee ranked second in Site Selection magazine's annual ranking of state business climates nationwide. Tennessee was second only to North Carolina. The ranking is based on two components: 1) surveys of site selection professionals, and 2) actual business expansion activity as tracked by the magazine's "proprietary New Plant database."

The results are the cover story for the magazine, but the web version is a little light on discussion of Tennessee, focusing mostly on No. 1 North Carolina. The angle is North Carolina Governor Mike Easley's understandable commitment to NASCAR.

If half of the measure is performance based, it would seem to bode well for Tennessee's future rankings as the "proprietary New Plant database" reflects the new plants related to Volkswagen and its suppliers who locate in the Chattanooga area.

Read the complete web article on Site Selection magazine's web site.

Knoxville delegation to Germany considers follow-up trip

According to the Knoxville News, the portion of Governor Phil Bredesen's delegation to Germany that went to represent the Knoxville and Oak Ridge area is considering a return trip.  The report quotes Kim Denton, president of the Oak Ridge Economic Partnership, saying there also has been discussion of a possible follow-up trip to solidify relationships made during the trip. "I think the follow-up is really important," she said. "I think continuing to develop those relationships is really important, and if a follow-up trip is necessary, then I think we'll explore that as well."

Denton is reported to have said that in addition to developing relationships, a goal was to create an awareness of how close the Knoxville-Oak Ridge area is to the Volkswagen facility. The group distributed cards that showed a map of East Tennessee and had a Top 10 list of reasons why the Knoxville-Oak Ridge location is perfect for Volkswagen suppliers, including the fact that the plant will be just over 100 kilometers away and that "The Tennessee Valley Authority offers affordable electricity and exceptional reliability."
The group also distributed flash drives with data about sites and buildings in the region that are suitable for automotive suppliers.

Barnes & Noble to open new store in Hamilton Place November 12

Barnes & Noble will open its new Chattanooga store on November 12 at Hamilton Place, according to a press release from Barnes & Noble. A preview party, including a ribbon cutting ceremony, begins at 6PM on November 11.

Hamilton Place Mall is bounded by I-75, Shallowford Rd, and Gunbarrel Rd in Chattanooga.

Former Prize Corp (now izmocars) locates offices downtown

izmocars, which purchased Chattanooga's Prize Corporation and provides CRM products for the auto industry, has located its offices downtown, according to a press release. The offices will be at 1 Central Plaza, located at the corner of Cherry St and MLK Blvd.

The release does not say how much square footage or how many employees the offices will have, but it does demonstrate the possibilities of smaller offices and time addressing the issues presented by the new Blue Cross campus and the related for potential office vacancies in downtown Chattanooga.

For the complete press release click here.

Could Chattanooga get more of Volkswagen expanding production plans?

As Volkswagen's $900 Million auto assembly facility in Chattanooga, Tennessee moves forward, more reports indicate that Chattanooga has good prospects to get more of the $4 Billion that Volkswagen currently has earmarked for production facilities. The Parties recently featured a report from German auto magazine Auto Motor und Sport about the possibility of the hybrid technology being produced in Chattanooga. Expanding on that report, Motor Authority reported today that there will certainly be North American production of the hybrid technology, which probably means either expanding the VW drive train assembly plant in Mexico, or the new VW auto assembly plant in Chattanooga. Since the site will be developing VW's own hybrid technology, at least some of the jobs should be research and engineering intensive.

Further, the Motor Authority article quotes VW board member Werner Neubauer as saying that additional production facilities for VW's next-generation, state-of-the-art dual clutch gears will be produced in North America, and indicates that the facility for the dual clutch will be either Mexico or Chattanooga.

If the hybrid drive train assembly plant is similar in job creation to gas-powered drive train assembly plants, it could mean 750 to 1,500 more jobs. Add the dual clutch assembly facility, and it could double the number of VW jobs announced so far. The impact will be far reaching, increasing demand not just for Chattanooga manufacturing space, but for Chattanooga retail and office space, too.

Click here for the complete report from Motor Authority.

VW CEO Says Audi Needs U.S. Production to Meet Sales Goals

It appears increasingly certain that Audi will announce US production facilities in 2009, and increasingly likely that if they make that announcement, it may well involve Chattanooga.

Today, Motor Trend reports, "In the past six months, Audi has gone from mulling over the idea of a U.S. production plant to now needing one, according to Volkswagen Group CEO Martin Winterkorn. Ever since Volkswagen announced its intentions to build an assembly plant stateside, Audi has sniffing around for one of their own and the latest reports indicate that a possible plan to produce Audis at Volkswagen's plant rather than build a second plant is the most likely scenario. Winterkorn, though, wouldn't confirm just where Audis will be built in the future."

The story includes some details an and links to other stories supporting the speculation that the VW plant will produce both Audi and perhaps Porsche.

See the complete story here.

Volkert commissioned to study traffic patterns around VW Plant

According to a report by Cliff Hightower in today's Chattanooga Times Free press, The city has commissioned a study in hopes of mapping out traffic patterns around the most notable industrial development site in Chattanooga, Enterprise South industrial park, the future home of the Volkswagen auto assembly plant. The city commissioned the study in anticipation of the thousands of workers connected with the Volkswagen plant and its suppliers, officials said.

The report includes links to PDFs of the study points and map.

See the complete story here.

Further Evidence of Volkswagen's Bigger Plans

Cookeville-Putnam Chamber of Commerce President George Halford was a part of the recent delegation to Germany, and he returned telling the Cookeville Herald Citizen, "This project is bigger than big. It's bigger than we expected." Halford said, "They could double the size of this plant. The $1 billion investment could double. There's going to be a lot of business heading our way."

Despite the project being bigger than expected, Halford still apparently sees a lot of competition. "Just in the state of Tennessee, within 90 miles of the Volkswagen plant, there are 346 industrial sites, 192 available buildings and 19,433 acres available for industry," Halford said. "This just shows the level of competition that we're working against. I didn't realize there were that many sites."

City of Pikeville to buy plant in hopes of attracting VW supplier

According to a report in the Chattanooga Times Free Press, the city of Pikeville is buying the former Dura Automotive Plant in the industrial park in hopes of attracting one of the suppliers that will locate in the area to serve the Volkswagen assembly plant in Chattanooga.

According to the article, the Pikeville plant has about 140,000 Square Feet and sits on 15.5 Acres. The aerial image comes from Mapquest.

The plant sits about 90 minutes from the site of the VW plant, according to a route map from Google, shown below.


View Larger Map

Interested parties might contact the city of Pikeville directly, or if they desire independent assistance in inquiring about this property, they may contact a commercial Realtor®: Benjamin Pitts, Commercial Realtor® at Herman Walldorf & Company at (800) 489-2402. (Information contained herein deemed reliable but not guaranteed.)

VW says to make hybrid parts on its own

A Volkswagen official told German auto magazine Auto Motor und Sport magazine that VW will produce its hybrid drive trains itself, according a report by Reuters. Other manufacturers have bought their hybrid drive trains, but according to the article quoting VW executive Werner Neubauer, VW sees this as an opportunity to gain a competitive edge.

The Parties have speculated about the location of a hybrid drive train assembly plant in Chattanooga. The VW drive train assembly plant in Mexico will supply the Chattanooga auto assembly plant with gasoline and diesel drive trains. Though VW officials have said that the Chattanooga plant might produce hybrid vehicles, the Mexico plant (according other blogs read by the Parties) is not set to manufacture hybrid drive trains. That fact is implicitly confirmed by Mr. Neubauer when he says that VW is considering "expanding its plant in Mexico or building a new site in the United States." It makes complete sense for that drive train assembly plant to be located in Chattanooga.

The speculation about a Chattanooga-based hybrid drive train assembly plant arose as the Parties tried to figure out Congressman Zach Wamp's math in the days following the original announcement about the VW plant in Chattanooga. The Parties were trying to evaluate the impact of the announcement on the Chattanooga real estate market, and were researching what types and how many total jobs would come from the jobs at VW.

Wamp (and others) said that the plant would yield 14,000 total jobs from the 2,000 jobs at VW. The Parties considered that number extraordinary. That many jobs would require a 7x multiplier of the jobs at VW. Economic impact studies of other plants have indicated valid multipliers at between 3.75x and 4.25x. The UT/CBER projections by economist Dr. William Fox had a multiplier of about 5.25x, using base data from the US Department of commerce. The 7x number was 30% to 40% higher than the next highest numbers used by any intelligent analysis.

The Wamp number at 7x could be explained a few different ways: 1) irrational exuberance; 2) plans that were not yet public. If the 14,000 job number was irrational, Rep. Wamp probably would have been the only one to use it, yet others did (though the Parties acknowledge that multiple people can quote a single, overly optimistic source).

On the other hand, perhaps the number is rational. Assuming the 14,000 job result and Dr. Fox's 5.25 multiplier, to validate the result, the Parties calculate that VW would have to employ about 2,700; using a 4x multiplier from other sources, VW would have to employ about 3,500. Those numbers are between 700 and 1,500 more jobs than VW originally announced. The employment numbers for drive train assembly plants fall squarely within that range. If such a plant were to be built by VW close to its announced auto assembly plant, then the Wamp number would make complete sense.

The Parties look forward to the prospects of Chattanooga hosting a hybrid drive train plant. It would be entirely consistent with Chattanooga's efforts toward sustainable manufacturing.