VW's Impact on Chattanooga
                  

Volkswagen represents an unprecedented opportunity for our community, but it also represents a major challenge.  How will we make the most of our newfound growth potential while maintaining our distinctiveness and quality as a community?

Volkswagen’s plan to invest $1 billion and create 2,000 jobs will ripple through our regional economy creating a wave of additional growth. 

According to the University of Tennessee Center for Economic Research, Volkswagen’s business operation will support an additional 9,477 jobs.  That means a total of 11,477 jobs will be added to our economy over the next few years as a result of this singular investment.

Businesses of all sizes will benefit as the people who hold these new jobs take home a combined total of $511 million in new wages and salaries every single year.  This new spending power will dramatically increase the market for local businesses of all kinds.

At the same time, Volkswagen will pay all local school property taxes related to its Chattanooga investment, which will add about $4.7 million a year to our education funding.  In addition, the UT study estimates that state and local governments will split $55.7 million in new annual tax revenue almost equally.

Those positive impacts may be just the beginning if the Volkswagen project follows a course similar to the BMW facility established in South Carolina’s Greenville-Spartanburg area about 15 years ago.  Like the planned Volkswagen facility, BMW initially announced 2,000 jobs and an investment of about $1 billion when adjusted to net present value.

Today, the company’s South Carolina complex supports 23,050 jobs and generates $1.2 billion in wages and salaries every year.  Regular retrofits and expansions at the BMW facility have grown its initial investment to a total of $5 billion, which has provided a regular boost to construction and related industries over the years.

Beyond the numbers, Greenville leveraged the optimism of its citizens to create a very impressive downtown revitalization effort.  Visitors enjoy a long boulevard of local restaurants and retailers canopied by lush trees and served by free, angled parking. They’ve also transformed the small river that runs through town with a network of bridges and walking paths.

At the same time, Greenville County’s population has grown much faster than Hamilton County’s since 1990, but their poverty rate has gone up (10.5% in 1990 to 13.6% in 2006), while ours has remained virtually flat during the same period (13.1% to 13.4%).

That more Greenville County residents would experience poverty even as so many others are enjoying much greater prosperity may indicate the importance of our continued efforts to ensure that every child has access to excellent educational opportunities, so they can take full advantage of economic opportunities as adults.

Of course, population growth also presents many challenges in terms of infrastructure development and how to manage development most effectively.  According to Brad Wyche, who leads Upstate Forever, a recent study projects that urban sprawl in the Greenville area will seriously impact quality of life unless the community undertakes serious efforts to increase population density and preserve special places.

The experiences of the Greenville-Spartanburg area underscore the opportunities and potential challenges that the Chattanooga area now faces.  Those experiences can serve us well as we position ourselves to capitalize on the enormous opportunities Volkswagen presents and at the same time anticipate and manage the challenges.