Local leaders proposed expanding a tax district to help a planned retail development near Interstate 26 compete with other massive retail sites going up in nearby Bristol.
At last week’s meeting of the Washington County Economic Development Council, CEO Mitch Miller said enlarging the current tax increment financing, or TIF, district from the former Young Farm, at the Boones Creek interstate off-ramp, to the Kingsport Highway would allow Johnson City to issue enough bonds to pay to ready the site for construction.
Miller said the Boone Ridge Townhome residential development, currently being built by Mitch Cox Companies near the planned retail site, would be a very lucrative addition to the district.
“It’s important, we’ve got to have it,” Miller told the public and private members of the council. “Without it, we’re going to be sitting here and waiting for quite some time to really do something on that site.”
A TIF district is used by municipalities to borrow money to make improvements to sites, like extending utilities, building roads or purchasing additional land. Cities issue bonds based on the amount of money they expect to collect from increased tax collection once property values rise.
By adding the Boone Ridge Townhomes neighborhood, where Cox aims to build as many as 253 new homes, to the TIF district, Miller said it could increase the city’s borrowing power by $4 million.
The preliminary figures he outlined for the district’s growth would mean including 49 new parcels spread among 35 landowners.
“We have to be cognizant of this and really have a good idea as we put a budget together,” Miller said. “We can’t go out and overextend ourselves and borrow too much. That ultimately puts the city and county in position to handle the rest of that debt that we may encounter.”
The city hopes the 100-acre site could grow into a 717,000-square-foot retail development positioned near wealthy neighborhoods that could draw unique businesses.
Miller said it’s important to get the infrastructure in place to help the site compete with the Falls and the Pinnacle, two massive retail sites on either side of the state line in Bristol.
Johnson City Manager Pete Peterson, a member of the Economic Development Council, said Thursday that he supports expanding the TIF district.
“I think we’re going to have to do that if we’re going to stand any chance at all of generating enough revenue to go and borrow $10 million, and $10 million is just Phase 1,” Peterson said. “That’s something that I really think we need to support, if we’re going to make this thing work and have enough money to make debt service payments and develop this site, we really need to expand this TIF district all the way to the Kingsport Highway.”
Miller said he and his staff are currently drafting a proposal to the City Commission to lay out plans to expand the district.
He expects to present the information to the commission in the coming months.comments powered by Disqus