Local leaders are discussing the implementation of a tax-increment financing district off of Exit 17 in the former area of Young's Farm. (Dave Boyd/Johnson City Press)
Some local leaders are looking to put a rush on expanding a special taxing district in Boones Creek to cash in on an upcoming retailers convention, but Washington County Mayor Dan Eldridge wants to take a calmer approach to avoid making what he says could be costly mistakes.
At last week’s meeting of the Washington County Economic Development Council board of directors, CEO Mitch Miller and member Bobby Jobe outlined the need to quickly approve an expansion of the Tax Increment Financing, or TIF, district centered around a proposed retail shopping center off Interstate-26’s Exit 17.
The annual International Council of Shopping Centers’ Retail Real Estate Convention, where industry leaders will meet to talk shop and forge deals, begins May 18 in Las Vegas, and WCEDC staff members are planning to attend with comprehensive details for the Boones Creek site to sell to prospective anchors.
“We really need a good presentation at this meeting,” Jobe said. “It only takes place once a year, and we need to be there with a good show.”
Miller said the a new grading and site plan would address concerns voiced by some business representatives at last year’s convention, as would having funding committed to finish the first phase of the project.
Expanding the TIF district from the interstate east to Tenn. Highway 36, including the land where Mitch Cox Companies is currently building the 253-unit Boone Ridge Townhomes neighborhood, would increase the county and city’s borrowing power enough to pay to ready the site’s grade and infrastructure, he said.
A TIF district allows municipalities to sell bonds based on property tax value increases expected within the district over a certain period of time. Once the bonds are repaid, usually 10 to 20 years, the increased tax collections go into the municipalities’ coffers.
If the district isn’t expanded before Mitch Cox completes the new residential units and that land is revalued, Miller said the city and county could lose out on a large portion of the increase in value in that district, diminishing their ability to raise money for site improvements.
The Development Council’s staff will also likely be competing against other local developers for retail tenants at the Las Vegas convention, namely Stewart Taylor, whose Heritage Point Towne Center site at the junction of Interstates 26 and 81 is in the process of being graded.
In the six weeks between now and the retail show, Miller laid out an ambitious plan for approving and drawing a new grading plan, signing a development agreement with partners Mountcastle Development, completing a new economic impact study and convincing the City and County commissions to expand the TIF district.
Washington County Mayor Dan Eldridge, however, pointed to another Tri-Cities retail development as a case for caution and careful consideration of committed taxpayer dollars.
“By attempting to rush this through without due diligence, we at the very least risk compromising the credibility of this organization,” Eldridge told the WCEDC. “But quite honestly, my greater fear is the example just 30 minutes up the road in Bristol, Va., where ill-advised decisions resulted in a disaster. That can’t happen here.”
Eldridge was referencing The Falls, an interstate retail shopping center currently in the early stages of development.
The city of Bristol, Va., committed tens of millions of dollars to pay for the 1.5 million-square-foot development off I-81’s Exit 5 and has faced expensive litigation from Washington County, Va., and other nearby developers, who claim the municipality is overstepping its bounds by using taxpayer money to bring in competitors to existing and future businesses.
Like Eldridge, Miller said the last thing he wanted to do was throw taxpayer money at a bad investment, but said if the municipalities set up the TIF district now in preparation to sell the site, it could be disbanded before money is spent if the project isn’t feasible.
An important factor in determining the feasibility of the site’s economics is a development cost study, which Miller said should be completed soon by Gary Tysinger, a civil engineering consultant.
Johnson City Mayor Ralph Van Brocklin declined to predict the full commission’s future actions, but said he was comfortable fast-tracking some of the elements of the Boones Creek center, because much of it was done years ago and only needed updating.
“There are some things with this project I ordinarily would like to have nailed down before we go through the process of approving it, but there were some original projections that have since become dated,” Van Brocklin said. “They projected the numbers a couple of years ago, and I felt they were reasonable, conservative projections. That’s why we saw the benefits to city and county to go ahead and create the TIF.”
This development, situated in an affluent neighborhood near one of the most well-trafficked Interstate locations in Northeast Tennessee, will help Johnson City stay on top of the Tri-Cities’ retail market and keep sales tax dollars coming in and property taxes for residents low, he said.comments powered by Disqus