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Extended: City Commission votes to change NN tax agreement deadline to 2019

Zach Vance • Apr 20, 2017 at 11:31 PM

As city commissioners decided whether to extend a payment-in-lieu of tax agreement for NN Inc., Vice Mayor Jenny Brock said it was a matter of “process versus product.”

While she said the process was flawed, ultimately, the product won out.

Led by Brock, the City Commission voted 4-1 during Thursday’s meeting to approve a resolution extending NN’s deadline to 2019 to reach 80 percent of 200 jobs promised in the original local PILOT agreement.

“The process was flawed. There is no two ways about it, but I do think the state got it right (with) five years. To ramp up time to add this volume of jobs, speaking from someone who’s worked for two Fortune 500 companies, is not out of character for what is needed here,” Brock said.

“Why it wasn’t caught up front? I don’t know. I was a part of it. I have to step up and take some responsibility because I voted for it and there were discrepancies in the original document.”

Brock also commended the two committees who overlook the PILOT agreements, the Washington County Economic Development Council and the Industrial Development Board, for luring companies like NN Inc. to Johnson City.

“I just want to compliment you on the innovate approach you’ve taken to land a major company and bring a corporate office in Johnson City, Tennessee. That’s a big deal to me,” Brock said.

“This region has a very low wage index. In fact, having sat on the Mountain States board, recruiting professional people to come into our area is a very difficult task. But the work that is going on here and the commitment for NN in hiring these enhanced salary jobs is really helping us get our wage index up. That’s something we need in this community.”

Commissioner Todd Fowler shared a similar attitude while talking about the positive return on investment the NN PILOT agreement provided Johnson City. He said he knew a recent college graduate who had numerous job offers but chose to stay in Johnson City with her family just to work at NN Inc.

City Commissioner Ralph Van Brocklin was the sole vote against the resolution, saying he would support extending the timeline one additional year, but he believed three years was plenty of time for the metal bearing company’s headquarters to reach the job threshold.

“Through the period of time we talked about doing this I was very supportive of this,” said Brocklin, who served as mayor when the PILOT agreement first passed the commission in April 2014.

“We had a lot of conversations privately. We had conversations that involved the whole commission with the Washington County EDC, and through that period of time, there was never any indication that NN could not fulfill the 200 jobs that they specified they would in a three-year period of time.”

In February, a Freedom of Information Act request showed NN’s headquarters only employed 64 employees, 136 fewer than the benchmark in the PILOT agreement. The company’s full property tax assessment should have increased to 68 percent because the original PILOT agreement had a 2016 deadline to meet the jobs requirement.

After analyzing the agreement, the IDB board noticed a date discrepancy between the Johnson City PILOT agreement and an accompanying state tax incentive agreement. The IDB board then unanimously recommended the City Commission amend the original agreement to align the deadlines to 2019.

“We learned a lot from it, and we’re going to be stronger and better because of it,” said Ron Scott, chairman of the WCEDC.

Before the vote, Scott laid out various protocol and procedure changes the IDB would implement moving forward to address the date oversight.

Among those were providing an executive summary to all parties to review before the PILOT documents are drafted and finalized, sitting down with tax departments to make sure there is a clear understanding about abated taxes and inviting new city commissioners to a special work session to learn about the agreements.

Scott also mentioned the creation of a public online database, similar to one in Memphis, to manage projects and allow the public to view each project’s economic impact.

After receiving nearly 50 public submissions, commissioners decided on a name for the future park between Commerce Street and King Street: King Commons.

City Manager Pete Peterson made the recommendation to honor the legacy of Martin Luther King Jr. and it was unanimously passed.

Other downtown-related items included the Commission approving the demolition of the canopy in the breezeway between the Downtown Square parking lot and Main Street.

The Johnson City Development Authority made the recommendation to the Commission to freshen up the area. The estimated cost will be between $5,000 and $10,000, and the JCDA plans to provide funding for new lighting, planters and seating in the area.

Downtown Johnson City will also be getting some new artwork and sculptures. The Commission approved leasing 14 new pieces of artwork for two years. The new artwork will be replacing much of the artwork around Founders Park, Public Works Director Phil Pindzola said.

Each piece will cost $2,000 to lease, and the funding will be provided through the public art fund. Pindzola said the old artwork will be removed in mid-May, and the new pieces will be installed by the end of May.

Email Zach Vance at zvance@johnsoncitypress.com. Follow Zach Vance on Twitter at @ZachVanceJCP. Like him on Facebook at Facebook.com/ZachVanceJCP.

 

 

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