CHATTANOOGA, Tenn. — The Chattanooga City Council on Tuesday held off on a proposed clawback settlement with Nippon Paint Automotive Americas, the company that received city land in East Chattanooga but fell short of the investment and hiring it promised.
Under the tentative deal, Nippon would pay the city $1,057,600 and hand back 10 vacant acres of the roughly 29 acres it was given on land that once held the Harriet Tubman public housing complex. The resolution would let the mayor or a designee negotiate and sign the agreement.
In exchange, the city would drop its right to reclaim the donated property and release the company from its remaining promises to invest, add jobs and stay in operation under the original land deal.
City economic development staff told the council the company spent $52 million at the site, below the $59 million it pledged. The pandemic slowed the project, and a planned second and third building were never built. The site had 32 employees as of last November.
District 8 Councilwoman Marvene Noel, whose district includes the plant, said she had missed an earlier session on the topic after being told it would meet at another time.
Council members Dennis Clark and Ron Elliott pushed for a better return. Clark said the payback figure rests on a 2018 appraisal and called for a fresh one. Elliott described the amount as small compared with what the city put in, which included $4 million to relocate a sewer line that crossed the property and construction of a Hardy Street extension meant to serve as the plant entrance.
Kevin Roig, chief of staff to the mayor, cautioned against being too punitive, noting the plant is still running and trying to grow. No new vote date was set Tuesday.
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