Around 1927, E.C. Alexander was president of the Mountain Spring Company in Elizabethton, Tennessee and as such oversaw the water supply to Elizabethton and two German rayon manufacturing plants there. As the German interest in Elizabethton grew, Alexander decided to purchase real estate and form a development company in association with local figures and officials of the German rayon plants, namely American Bemberg and American Glanzstoff, to form the Watauga Development Corporation. That corporation held nearly four hundred thousand dollars' worth of property near the plants. The growth of plant workers demanded more housing, and the oversight of this housing need fell to Watauga Development Corporation.