For

Immediate Release:
July 17, 2015

For More Information:
Lacie Stone, 423-902-4030, Stone_l@chattanooga.gov

Mayors Berke & Coppinger Announce Resolution to Alstom PILOT Agreement Shortfall
Over $630,000 a Year in New Tax Payments to City and County

Chattanooga, Tenn. (July 17, 2015): Mayor Andy Berke joined Mayor Jim Coppinger and members of the
City Council and County Commission today to announce a resolution to the ongoing dispute with Alstom
regarding commitments under their 2008 Payment in Lieu of Taxes (PILOT) Agreement. Under the
original agreement, the company was required to invest $265 million in capital and create 300 new jobs.
As of January 1, 2015, however, Alstom failed to meet the jobs target. After months of negotiations, the
dispute has been resolved with Alstom agreeing to:
Pay 50% of total tax liability moving forward. This will result in the City and County receiving a
combined additional annual revenue well in access of $600,000; and
Prepay $250,000 towards its 2016 tax payment.

In the event Alstom increases the number of jobs, the City and County will consider adjusting these
terms, although no adjustment is required.

The City has gone from receiving zero tax payments from Alstom to over $400,000 a year. This is a big
win for Chattanoogans, said Mayor Andy Berke.
To promote accountability, the City and County have put specific provisions for clawbacks in all
incentive agreements since March of 2014.
In the past, the City did not have an agreed-upon mechanism to recover funds in the event a company
did not live up to their commitment. With the new reforms for all PILOTs put in place by the Mayors
offices, our citizens are more protected from companies not living up to their word, said Mayor Berke.
Earlier this year, Mayor Berke and Mayor Coppinger began aggressively negotiating with Alstom to hold
the company accountable for the failure to reach its jobs requirement. In an April press conference,
both Mayors stated that prior PILOT agreements were a driving force behind their collective effort to
reform the PILOT process.
Todays announcement is another example of local government living up to our responsibility to tax
payers, said Mayor Jim Coppinger. Its our job to not only bring new jobs and investment to our
region, but to safeguard citizens when these agreements are not met. Through these tough
negotiations, we were able to resolve a specific dispute with one company as well as put in place PILOT
provisions to make sure this doesnt happen again, which will ultimately result in more investments in
education and the best services possible for our residents.


Although Alstom did not meet its target number of jobs, it does still have a significant workforce in
Chattanooga and has far exceeded its capital requirement, with over $364 million in capital
improvements since 2008.
For more information about the PILOT process, existing agreements, and investments enabled through
PILOT investments, citizens can visit the newly launched open data portal which contains data on every
agreement. The City and County released the information to increase transparency regarding PILOT
agreements.
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