HomeServe seeks tax break for expansion
HomeServe USA in Chattanooga has been a major employer of women and minority workers and the company’s $5.7 million expansion should help create more opportunities for workers across Chattanooga’s economic spectrum, the head of Chattanooga’s economic recruitment program said Wednesday.
Charles Wood, vice president of economic development for the Chattanooga Area Chamber of Commerce, told Hamilton County commissioners Wednesday that a requested five-year property tax break for the new East Brainerd office will help HomeServe add nearly 200 jobs at another new office complex. Most of the new jobs will require only a high school degree but pay $17 an hour, or more than $35,000 a year.
The agreement calls for Home Serve USA, which offers monthly household repair plans to homeowners, to bring in 192 additional employees, Wood said. Of that number, 133 are production-level positions which require a high school diploma or equivalent.
“We view that as a really good opportunity from a movement up,” Wood said. “If you think about folks who are working at some of the call centers like Convergys, that might be at a lower wage or getting experience,
this will give people the opportunity to move up the wage ladder, if you will.”
The rest of the new jobs are office and management positions, whose salaries drive up the overall wage average to $39,250, Wood said.
Minorities compose 40 percent of Chattanooga’s existing HomeServe workforce, and females make up 60 percent, he said.
Wood said that’s important because Chattanooga has been successful bringing in manufacturing jobs, but men staff most of those positions. Back office and financial services tend to have a larger proportion of female workers, he said.
The $35,000 base pay puts HomeServe employees ahead of the curve in an area where 40 percent of the total household income amounts to $35,000 or less, Wood said.
Commissioner Joe Graham asked if the job commitment was a conservative number, with a potential for future job growth beyond that.
“The 192 jobs — it’s somewhat conservative,” Robert Judson, senior vice president of contact center operations for HomeServe said. “The growth trajectory of the business is phenomenal. We just acquired a new company and brought on 600,000 new customers. If we continue with acquisitions at that rate, it could go beyond that, but this is in line with our budget numbers at this point.”
The company, which is based in the United Kingdom, serves over 2 million customers in the United States and Canada. Its United States headquarters are located in Connecticut.
It has operated in Chattanooga since 2010, but had looked at other communities in the Southeast to accommodate the expansion, Wood said.
The payment-in-lieu-oftaxes [PILOT] proposal calls for the county to forego all new property taxes generated by the new facility in the first year of the agreement. The percentage of abated taxes declines to 75 percent in the second year and 60 percent in the third year. Property tax payments stand at 50 percent for the last two years.
In all, that amounts to $90,698 in abated taxes for the county and $150,382 for Chattanooga.
However, the company will still pay the full amount of property taxes owed to Hamilton County Schools, which amounts to $131,789 for the PILOT period. It will also pay $66,521 in economic development fees, which will be split between Hamilton County and Chattanooga.
The company projects the expansion will generate $9.4 million in employee wages and benefits.
Hamilton County Mayor Jim Coppinger said it has been a “delight” working with the company and revealed the project had actually been in jeopardy at one time.
“They are exactly the kind of company you want to come here and grow their company, and they have,” Coppinger said. “It’s extremely competitive, as Charles pointed out, and these companies have other options and places to go and that’s why they’re here to ask for incentives.”
The Hamilton County Commission is scheduled to vote on the tax break on May 17.