A future retail and commercial development project in Boones Creek took its first step toward reality Friday morning, and local officials believe it will keep Johnson City on top when it comes to regional retail dominance.
At a joint meeting of the Washington County Economic Development Council and Johnson City Development Authority, the organizations approved a plan creating a tax increment financing, or TIF, district that will spur private development on about 100 acres of undeveloped land off Boones Creek Exit 17 of Interstate 26.
Tax increment financing, or TIF, is a method utilized by local governments to pay for community improvements with future tax revenues. A TIF plan is approved by a local government to redevelop an area by paying for the cost of public or private improvements out of future growth in taxes attributed to the new development.
“The reason we’re doing this is one of our objectives ... is to solidify and enhance Johnson City’s position in Washington County as the dominant retail location in the Tri-Cities region. That’s what’s driving us,” Economic Development Council CEO Robert Reynolds said.
According to 2011 retail figures, Reynolds said Johnson City led the Tri-Cities with $1.888 billion in retail sales, compared to Kingsport’s $1.456 billion and Bristol’s $1.015 billion.
The Economic Development Council has partnered with Johnson City-based Mountcastle Development in the Boones Creek project. The council has the property under option for the next three years.
The property, which is commonly known as the Young Farm, is located within the Tri-Cities’ wealthiest area, according to Roberts, and will strongly play into the future growth of the community.
Both Johnson City Mayor Jeff Banyas and Washington County Mayor Dan Eldridge said this project will help the city and county compete with surrounding cities when it comes to future retail development.
“This is a very creative solution to help level the playing field, if you will, between Washington County and Sullivan County,” Eldridge said.
Banyas said this plan has been discussed for more than a year and was ultimately decided on for its potential to bring new jobs to the area and increase the sales tax base in the county.
“Johnson City’s had one tax increase in 19 years and the reason for that is we’ve been able to grow and the growth in the sales tax has been able to grow and the growth in the sales tax has been able to take care of the growth in the city and Mayor Eldridge and I both recognize that this is important for the city, the country and our school system, and we need to do everything we can to encourage that sales tax base to grow,” he said.
Development is expected to take several years, and will proceed in phases. Both Washington County and Johnson City commissions will have to sign off on a specific TIF plan.