CHATTANOOGA, Tennessee — Developer David DeVaney is giving his guests a driving tour of this city set along the lush foothills of the Appalachian Mountains.

It is a city he loves, and he couldn’t be prouder if he were flipping open his wallet and showing off pictures of his children.

In essence, everything he points to represents important groundwork B.V.W — Before Volkswagen — and was essential to landing the German automaker in 2008.

“We don’t have 19 cranes Downtown,” he said with a laugh, referencing Nashville, in what is less an apology and more a cheerful boast of growth without hellacious snarl.

He gestures toward the Tennessee Aquarium — aging gracefully but pushing 30 now — and beams when speaking of it as a port of entry for tourism.

Next, he launches into a story about the nearby Walnut Street Bridge. Closed to traffic in 1987 for safety reasons, DeVaney says the city was faced with a choice: Tear down the bridge for about $3 million or refurbish into a pedestrian bridge for $4 million.

Shortsighted savings vs. longer-term rewards, in other words.

Today, it is its own tourist attraction and a key piece of the riverfront renaissance connecting the North Shore to Downtown and the aquarium, the arts district, and the Tennessee Riverwalk.

Volkswagen has made a $2.4 billion investment here over time, creating 5,000 jobs, according to the Tennessee Valley Authority. The head-turning incentive package from state and local governments in 2008 was a then-Tennessee record $577 million.

Now, those numbers — somehow — seem modest compared to the $5.6 billion Ford battery plant coming to Haywood County at the Megasite of West Tennessee.

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The numbers also pale when compared to the almost $900 million spending package for Ford recently approved by the Tennessee Legislature: $500 million in incentives, another $384 million in varied infrastructure development.

So, DeVaney looks at all that Chattanooga, Hamilton County and the state put into attracting Volkswagen as worth it at the time.

And worth it even more with each passing day.

“It’s the gift that keeps on giving,” he said.

Visible progress

It is a bit of irony too delicious to have been fabricated: In a former life, the abandoned site that became home to the German automaker had been a federally owned working army munitions plant during World War II.

“At one time, they were making 30,000 tons of TNT a month,” DeVaney said, noting that the natural areas around the plant still contain bunkers.

So, time can change anything.

A further illustration of that point: driving through the Southside District on Main Street beyond Downtown.

Years ago, DeVaney says, it was “dilapidated, run down. The neighborhood had a lot of drugs and prostitutes.”

Today?

“It’s vibrant, eclectic — food, parties, improved residential,” said DeVaney, who is president of real estate firm NAI Charter. “In fact, it’s one of the few times in my commercial real estate career that we’ve sold property for over asking price.”

Before this informal driving tour started, back in his office on Vine Street Downtown, DeVaney had presented a framed article from the Wall Street Journal dated July 30, 2008. The headline: “In Volkswagen, ‘Dynamo of Dixie’ hitches a ride.”

Dynamo of Dixie is a nickname going back to when Chattanooga was a manufacturing and steel town. A past of long ago.

“One and only time I was quoted in the Wall Street Journal,” DeVaney said. “Pretty cool.”

Thirteen years after he made the WSJ, and as much as he likes the new boots-on-the-ground view of his hometown, there’s another view he enjoys even more.

He sees it when he is high above the city coming home from a business trip or a vacation, taking in the full scope of life A.V.W. — After Volkswagen.

“Flying into Chattanooga, you fly right over it,” he said of the sprawling 2,000-acre campus in the Enterprise South industrial park. “It feels good. It makes you feel like, ‘progress, the right progress.’”

Refusing to settle

The “Dynamo of Dixie” lost her power, the way so many towns did as the beasts of rapid communication and pervasive technology roared over the global horizon.

“The two huge employers in the ’60s and ’70s were DuPont and combustion engineering,” said Charles Wood, vice president of Economic Development for the Chattanooga Chamber of Commerce. “Tens of thousands of jobs. They were gone before Volkswagen got here.

“We were losing population in the ’70s and ’80s, right? And there’s a whole community narrative around the reinvention of the city. The story I tell people is we were losing our children.

“They’d leave for college, and they wouldn’t come back — except for the holidays.”

From the start, when attracting a major auto manufacturer seemed like a pipe dream to some, DeVaney says there were vocal detractors.

But there was also a public official who was determined not to be denied: the late Claude Ramsey, who was elected to five terms as mayor of Hamilton County before becoming then-Gov. Bill Haslam’s deputy.

“All of his political will and political capital were put on the table for this project,” Wood said.

Ramsey was a local boy who was a third-generation strawberry farmer. When plans for the site were not proceeding at the speed that the public and media wanted, Ramsey became a target.

There was a cartoon, Wood says, of Ramsey romping around in a strawberry patch: “The running joke was Claude Ramsey was planting strawberries out there and that was the only thing that was gonna happen — a strawberry farm in Enterprise South.”

Given the criticism, it would have been understandable if Ramsey and other leaders had mitigated the heat coming their way by dividing Enterprise South into smaller parcels. DeVaney recalls even thinking that might not be a bad idea; after all, companies from near and far came knocking.

Ramsey would not budge.

“Frankly,” Wood said, “it would have taken the filet out of the middle of the site. Claude really held tight and said, ‘That’s not what we’re after here.’ One was a very large distribution project that was not Amazon.”

Dennis Cuneo was the vice president of site selection for Toyota Motor North America in 2007 and he recalls the Chattanooga site “just was not ready.”

Toyota’s rejection was hardly a secret and difficult to hear. But not without benefit.

“That helped galvanize the community into really investing in the site and make it viable,” Wood said. “When you lose a project, you can learn a lot.”

For the win

Long before the deal with VW was brokered in former Senator and Chattanooga Mayor Bob Corker’s Riverview home — or even was a twinkle in community leaders’ eyes — the city’s revitalization was underway.

“Massive investment in Downtown,” Wood said. “Corker (who was a real estate developer) has his fingerprints all over the riverfront redevelopment.

“Volkswagen doesn’t come here without it. The redevelopment of Downtown and the reinvestment we made in ourselves, that really was made at a community level, was absolutely critical.”

After Volkswagen chose the city, a Volkswagen official as much as confirmed this, saying, “Chattanooga made the intangibles tangible.”

This was no small factor in besting Huntsville, Alabama, alias “Rocket City.”

“Huntsville has more engineers per capita than any place in the U.S.,” Wood said.

The corporate incentives, of course, were part of the draw and that $577 million was not without debate.

Helen Burns Sharp, founder of Accountability for Taxpayer Money in Chattanooga, famously said: “We agreed to give them the sun, the moon and the stars, when perhaps the sun and the moon would have been enough …”

But before there could be any offer to any auto manufacturer — and Toyota kicked the tires here before choosing Blue Springs, Mississippi, near Tupelo — there had to be a level of commitment not yet achieved.

So, three years after the clearing of the former munitions site had begun in earnest, and with the first VW Passat rolling off the assembly line, Corker spoke to civic persistence that won the day: “This is a testament to a city that held to its vision.”

One result: a cityscape changing in ways that once might have been unimaginable, as a noticeable influx of Volkswagen vehicles roll up and down the hills of Hamilton County.

“There’s a few,” Wood said with a grin. “They may not outnumber pickup trucks, but there’s quite a few here.”

A tale of a new city

Today, Chattanooga is a different place, a still-evolving place.

The city has enjoyed a 10% spike in growth since the 2010 Census. Hamilton County, with a population of nearly 375,000, has grown by 11.1% since 2010.

Long ago dubbed “The Scenic City” for obvious reasons — hiking and mountain bike trails are so prevalent that they even run through Enterprise South, the site of the Volkswagen plant — Chattanooga more recently became known as “Gig City” for its lightning Internet speed.

Also noteworthy: At visitchattanooga.com the first three historical facts mentioned are Glenn Miller’s 1941 recording of “Chattanooga Choo Choo,” that the Walnut Street Bridge was built in 1891 and is now the second-longest pedestrian walkway in the country, and that in March of 2011 Volkswagen Group of America opened its new assembly plant here.

So, to find out that the first MoonPie was made at the Chattanooga Bakery in 1917 — and it was — you now have to dig a little deeper.

What’s clear: Volkswagen seems to touch almost everything here, and almost everything seems to touch Volkswagen.

The Tivoli Theatre, for instance, didn’t just spring up on Broad Street Downtown. It opened in 1921. But only recently, Wood says, has it become a destination for New York’s off-Broadway productions.

“Can you point directly to Volkswagen?” Wood said. “No. Does it happen if they don’t show up and there weren’t 15,000 jobs tied to the automotive sector? Maybe not.”

Meantime, the company has targeted education, protection of the environment, community and diversity as areas of focus for investment, said VW’s Chattanooga communications manager Amanda Plecas.

She notes $1 million in backing for a STEM zone and science center at the Creative Discovery Museum (a children’s museum), a $1 million investment in 16 E-Labs at Hamilton County middle schools and high schools, and continued sponsorship of an environmental and conservation program at the Tennessee Aquarium.

Not to mention the opening of Volkswagen Academy in 2010 amid the recession.

“All manufacturers in the Tennessee Valley can benefit from hiring a graduate of Volkswagen Academy,” Plecas said.

Moreover, job growth has been exponential.

A 2012 study by the Center for Business & Economic Research at the University of Tennessee pegged full-time equivalent jobs in the state related to Volkswagen at 12,400; the study also said the Chattanooga plant was responsible for $643.1 million annually in income.

“You have direct jobs created by the tier-one suppliers and tier-two suppliers for VW. And they’ve bought land, bought buildings, developed, hired, employed people,” DeVaney said.

“Outside that wheelhouse, Chattanooga’s busting at the seams. But I don’t know if we can attribute that all to VW.

“Chattanooga’s always been a great place to work, then we understood we need to make it a great place to live.

“Put those two together, the story gets out.”

‘Critical mass’

But DeVaney also would be the first to say that VW keeps the story front and center.

In September, Volkswagen announced it was opening a North American regional headquarters in Chattanooga. The plant here also is expected to hire about 1,000 new workers to build the ID.4 electric SUV (estimated startup in the third quarter of 2022) and add a third shift.

At a press event in September Johan de Nysschen, chief operating officer at Volkswagen Group’s North American Region, said the company is just getting started with EV production in America and that the ID.4 is “only our opening salvo.”

This is why 13 years after Volkswagen announced it was coming, and a decade after VW actually began producing cars in Chattanooga, Wood points to an economic development maxim:

“You have to get the first recruitment project to get the expansion.”

And not just VW expansion.

“The Southeast Tennessee region is kind of the European corner,” Wood said. “The Nokian Tyres project (in Dayton, Tennessee) is out of Finland. Gestamp, out of Spain (and located on Volkswagen Drive in Enterprise South), is a massive supplier and on their way to 1,000 employees.

“You’ve got this critical mass.”

Which is far different from where things were in 2008.

“Unemployment in Chattanooga was over 10%,” Wood said. “It was a very dark time economically. I don’t want to say we were lucky because there was a ton of work that went into getting that site ready, for more than a decade.

“But the timing of the announcement was really lucky. When everything is headed down, that project – I don’t know how many construction jobs it had, but thousands of people built the plant – and then then they start to hire literally thousands of people – 2,000 direct jobs.

“And we did see an influx of people that came in from Michigan because Volkswagen’s hiring, Ford’s not, GM’s not … so, from that perspective, it was really good timing.”

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So good, that now developer David DeVaney does not have to be driving the streets of Chattanooga or flying over the ever-expanding Volkswagen campus to feel the difference of where his city once was to where it is going.

“I’m on a ski lift in Colorado two years ago,” he said, “and a guy goes, `I’m either moving to Austin, Texas or Chattanooga, Tennessee for my little business startup.’

“And I’m like, `here we are being compared to Austin, Texas.’

“That’s a great deal.”