GE Power has agreed to pay Chattanooga and Hamilton County $6 million related to tax breaks earlier awarded to the former Alstom manufacturing operations in the city, which is now owned by GE.
Article continues below
GE is slated to pay $3.3 million to the city and $2.7 million to the county, about half the amount that was initially sought from the company, along with attorneys fees, officials said.
Chattanooga Mayor Andy Berke said the agreement is "a clear win for the city."
"It's the first time we've pursued a company [that] failed to meet its obligations," he said.
County Mayor Jim Coppinger said the settlement is "a good deal for us."
"There was no assurance we'd get anything," he said, even if the city and county had pursued court action against GE.
Karen Simons, senior counsel for GE Global Operations-Properties, said the company appreciated "the strong commitment shown by city and county officials to work together and arrive at a solution that is agreed upon by all parties."
The city and county had originally sought $13 million from GE for tax breaks awarded after a 2008 payment-in-lieu-of-tax (PILOT) agreement with France-based Alstom related to an expansion at its Riverfront Parkway facilities.
A little more than a year ago, GE bought Alstom's power operations and later announced it was closing the steam turbine manufacturing plant and two other adjacent facilities, eliminating nearly 235 jobs through year's end while offering severance packages. GE said it planned to keep about 50 people in Chattanooga.
Berke said the 2008 PILOT didn't provide "clawbacks," or specific language stating what the company would need to repay if it didn't carry out its expansion or hiring plans.
"When I came into office, one of the things we did is we changed our PILOTs so they clearly state what happens when companies don't meet their obligations," he said. "That's the best way to do these things, so there's no risk and uncertainty."
Berke said GE took the position that without some kind of specific provision in the PILOT, there may not be any obligation. GE also said the PILOT is not its commitment but was Alstom's, he said.
But, Helen Burns Sharp, founder of the citizens group Accountability for Taxpayer Money, said the city and county should be reimbursed the entire $13 million.
"Surely our elected officials will not accept anything less," she said. "If homeowners and small businesses get behind on our property taxes, we can't cut a deal to pay just a portion of what we owe."
Sharp said the 2008 PILOT language is clear enough that the $13 million was initially sought by city and county attorneys. She added that the fact GE bought Alstom while the PILOT was in effect has no bearing on the new owner's responsibilities, also citing the PILOT. ■