The plan, as presented to members of the county commission’s Commercial, Industrial and Agricultural Committee, would provide an estimated $1.195 million to R&G Ventures to rehabilitate the century-old flour mill. The 20-year incentive program would be administered by the Johnson City Development Authority using borrowed funds paid back by capturing new taxes generated by the increase in property values after development.
According to Washington County Economic Development Council Downtown Development Manager Dianna Cantler and JCDA TIF Advisory Committee Chair Craig Torbett, the TIF program will be split into two phases.
The first phase would only concern the mammoth task of renovating the 40,000 square feet of blighted floor space in the mill. Because of the expected far-reaching effects of its rehabilitation, which proponents believe will transform the vacant industrial eyesore into a revenue-generating tenant on the corridor between East Tennessee State University and downtown Johnson City, the JCDA committee recommended funding the project using the full allowable amount of the tax revenue increase.
The second phase would deal with the development of what R&G principal Grant Summers, president of Summers-Taylor Inc., calls outparcels. The company plans to buy the neighboring Mize Farm & Garden Supply building and build smaller spaces for businesses along State of Franklin Road.
Phase 2 meets fewer of JCDA’s qualifying criteria to increase the incentives value, so the committee recommended funding that portion of the project using 50 percent of the captured collections increase.
Before setting the incentive program in motion, the mill land would first be subdivided to split the physical structure from the rest of the surrounding property.
Part of the TIF incentive would immediately be used to purchase the property, according to Cantler.
In July, Summers-Taylor announced a contract with the Johnson City-Jonesborough-Washington County Chamber of Commerce, the current mill owner, to buy the entire property for $570,000. Summers said Thursday his company is also under contract to buy the Mize property.
After repairing years of damage from water and disuse, the developer plans to move the Summers-Taylor headquarters into part of the building. The rest will be converted to upscale office and retail space. The company is also in talks with ETSU to provide instructional or administrative space inside.
“You can't build this now, you just can’t manufacture this kind of space,” Summers said Thursday, scrolling through photographs of solid wooden support beams and bricked-over arched windows. “But there’s a lot of work to get there.
“This is the type of project that is exactly what TIF was written for. It’s blighted and a safety hazard right now.”
CIA Committee member Lynn Hodge asked the pressing question many of the leaders had in mind: How will the two-alarm fire two weeks ago on the mill’s third floor affect development plans?
“There is insurance, we met with the adjuster, and we’re cautiously optimistic they will get us close to where we were before,” Summers said.
He added that, with remediation of the designated brownfield site and the cost of rehabilitating the large structure, the TIF funding barely allows the company to break even on its $7 million expected investment. The 50-percent funding on the outparcels should help make the project worthwhile.
“Forty-thousand square feet seems huge, but it’s not quite enough to do everything,” Summers said. “If we weren’t the anchor, we wouldn't be doing this project. There’s a reason nobody else has stepped up to take it on. The numbers don’t really work.”
The TIF incentives proposal will next go to the JCDA’s full board and the county’s Budget Committee before heading to the full County Commission.