Chattanooga, TN, May 24--SI Corp. officials, who in March announced plans to move the company's corporate headquarters from Georgia to a downtown Chattanooga office building, appear to have had a change of heart, according to the Chattanooga Times/Free Press.
The company said, according to the newspaper, that the cost to rent 30,000 square feet in the 401 Building is too high and it's looking at other options downtown.
"We had negotiations almost 90 percent completed. Costs kept escalating. We couldn't do it financially," said Kemp Harr, vice president of marketing for the carpet-backing and fibers maker.
However, businessman Larry Armour, who with Steve Dillard owns the 401 Building at Fourth and Chestnut streets, said they are still negotiating with SI Corp.
"We continue to talk with them. We'd love to have them," he said.
Mr. Harr said the company has put off its move downtown at present. He said SI Corp. isn't close to another deal.
In March, Gov. Phil Bredesen and Matt Kisber, Tennessee's economic and community development commissioner, were among a large contingent at the announcement of the company's planned shift to the building.
SI Corp. officials, including company chief executive Joe Dana, said at the time it would shift 100 jobs into about 30,000 square feet of the 401 Building, which underwent a $3 million renovation. The company already has a presence in Chattanooga with about 80 workers in offices off Lee Highway, which were to move downtown.
"Changing lease negotiations were driving up original overhead costs to the point that they would impact future pricing and company operations. Rather than continue with plans to move to this Chestnut Street location, we are searching for downtown space that offers a more fiscally sound investment," the company said in a statement.
Mr. Armour said the lease terms and rents haven't changed since SI Corp. made its announcement.
"I understand that their build-out cost and moving expenses were more than they had anticipated, but that was not in our control," he said.
Paul Brock, president of the nonprofit downtown development group RiverCity Co., said he thought the company's move was a done deal.
"It's important they stay downtown. Anything we can do to facilitate that is a good thing," he said.
J.Ed. Marston, the Chattanooga Area Chamber of Commerce's vice president for marketing, said it will help SI Corp. find another location downtown.
"We've gotten information about the specifications they need," he said.
Bryan Rudisill of Charter Real Estate Corp. said there are office buildings downtown which have 30,000 square feet available, though finding adjacent parking for 100 could be a problem.
He said Warehouse Row has the office space, a parking garage and nearby surface parking that could accommodate SI Corp. The unique feature of the 401 Building is that all the 30,000 square feet is on one floor, said Mr. Rudisill.
Privately held SI Corp. has 2,000 workers, about 1,700 in the area.
