Amazon Planning to Open Distribution Centers in Chattanooga area

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The Times Free Press reported Monday (11/29/10) that Amazon is the mystery company (Project Infinity) that has been talking with the State of Tennessee, Hamilton & Bradley County and City of Chattanooga officials about opening two fulfillment centers in Southeast TN.  Statements from TN Governor Phil Bredesen, state Economic and Community Development Commissioner, Matt Kisber and Chattanooga mayor Ron Littlefield in the form of a news release (chronicled on  WRCB-TV’s website) confirmed that TN officials are “working diligently with Amazon.com officials to work through outstanding issues on this project.”

Last week, Chattanooga Mayor Ron Littlefield asked the city council members to consider a tax break for the proposed development, but pointed out in the release that “this is not a done deal.”  He went on to say, “there are a number of other issues to work through at the state and local level, but we have high hopes of firming up Amazon’s investment in the next few weeks.”

The two projects would represent a combined investment of more than $164 million dollars to create more than two million square feet of distribution space and up to 1,400 new jobs over a period of years in the two counties.   “The Amazon project has come together very rapidly over the past couple of months,” said Trevor Hamilton, vice president, Chattanooga Chamber of Commerce. “The company has a very ambitious construction timeline, so reaching resolution on the remaining issues is very important if we’re to be successful in winning this project.” and employ over 2,000 people.  It is expected the firm will build two million-square-foot distribution centers.

New Questions

While speculation over the mystery company is now over, new questions arise.  Will Tennesseans be subject to State, Country & City taxes when making purchases on Amazon.com?  Commissioner Kisber stated in the release they are moving forward “at the local level on PILOT (payment-in-lieu-of tax) agreements in multiple communities.”  What concessions are being negotiated by our State, County and City officials?

What about existing infrastructure? Do plans drawn up with the anticipation of Volkswagen’s plant being fully operational need to be reworked or were provisions for expanded growth beyond VW (in the near future) included?  Was it projected as gradual growth or does it take into account and explosive expansion? With VW, Wacker, the ancillary companies and the possibility of Amazon.com is it safe to say we’ll have over 20,000 new jobs in the metro area that didn’t exist two years ago?

Impact

This is tremendous for Chattanooga.  If City/County planners need to head back to the drawing board, then so be it.  John Van Winkle, Chattanooga City Traffic Engineer, may get his way after all to install roundabouts throughout the city.

The Scenic City, after converting itself into a manufacturing hub and suffering when that industry declined, seems to have learned a valuable lesson to not put all it’s eggs in one basket (or sector).  The diversity of companies, whether planned or not, is an insurance policy for the area to weather economic storms.  Deals of this nature are usually identified and fought for by elected and non-elected officials (state, country, city), Chambers of Commerce and corporate & private citizens who believe in this area.  For those involved, we salute you.


Video coverage from WRCB-TV


Why Chattanooga as a location is attractive to Amazon.com via News Channel 9

UPDATE:

12/20/2010

CHATTANOOGA (AP) – Amazon.com has finalized its commitment to build new distribution centers that will create up to 1,400 jobs in Chattanooga and neighboring Bradley County.

A statement Monday from the Tennessee Department of Economic and Community Development said Amazon.com plans to spend a total of up to $139 million building the two facilities.

The jobs are expected to be created in the next three years and there will be hundreds of peak season positions.

The new distribution centers are expected to be operating before the 2011 holiday season.

Amazon.com’s North American Operations vice president Dave Clark said in the statement that the new facilities in Tennessee will allow the Seattle-based online company to “serve customers more quickly and efficiently.”

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Jon is a Digital Marketing Strategist and Creative Media Specialist who has helped companies of all sizes with their marketing efforts. As a board member of the Chattanooga Technology Council, and is actively involved in covering the emerging business tech scene. Find him on Twitter @jonfmoss