From TNT to Industry

THE DAILY FED

From TNT to Industry

anna buy into an old TNT plant? If so, the Army is desperate for your business.

In its heyday, the 7,000-acre Volunteer Army Ammunition Plant near Chattanooga, Tenn., was probably the world's largest TNT manufacturer, churning out 3 billion pounds of explosives from World War II to Vietnam. Then, in 1977, the Army shuttered the site for lack of demand-until two years ago, when officials decided to turn a white elephant into a moneymaker, or at least less of a money-loser.

Out went the scary old name, in came grants from the Army's $100 million Armament Retooling Manufacturing Support initiative, and suddenly "The Volunteer Site" began redefining itself as a magnet for businesses both small and large.

Officials of ICI Americas Inc., the operating contractor, pitch the site as an "eco-industrial" park endowed with great rail and road infrastructure and easy access to Interstate 75. Rent payments help the Army foot the bill to clean up portions of the TNT manufacturing area.

"The government usually thinks of these as liabilities, not assets," says Charles S. (Sid) Saunders, ICI's vice president at the Volunteer Site. "But if you lease it out immediately and indemnify the tenants from liability, you can get the site used quickly and have it be a model for converting other federal assets to productive uses."

So far, a handful of private-sector entrepreneurs, utilities and bigger companies such as Raytheon have set up shop here. Some clients have even rented old ammunition bunkers for climate controlled data storage.

That's still well short of the organizers' ultimate goal of hosting 10,000 jobs. But because the project is supposed to be proceeding in phases, officials here aren't worried yet. "The government is short on cash and long on stuff," Saunders says. "They own the equity. Why not take the company public and get the cash back? This is a hell of a wakeup call."