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UPDATE: NN Inc. to leave Johnson City; official vows to enforce tax agreement

Nathan Baker • Updated Apr 19, 2019 at 1:17 PM

After selling its local manufacturing plants and moving its headquarters, global NN Inc. announced Thursday it will totally leave Johnson City by the end of June, a surprise to some local officials.

In a press release posted to its website, the company, currently under a tax abatement agreement with the city Industrial Development Board, said the decision to close its shared service center in Johnson City better aligns with its strategic plans and makes the company more efficient.

Mitch Miller, Northeast Tennessee Regional Economic Partnership’s CEO, emailed a statement Friday afternoon promising to hold the company to the 2015 payment in lieu of taxes, or PILOT, agreement it signed with the city.

“We regret the company’s decision,” Miller said. “As long as it owns its building here, NN will owe property taxes due based on the PILOT agreement.”

Over the past three years, as NN gradually withdrew from the community, local economic development officials kept hope that it and the 200 high-paying jobs it promised Johnson City would stay.

In 2017, three months after the city amended its tax incentive agreement with the company to give it more time to create those 200 jobs, NN sold its bearings plants in Erwin and Mountain City. Two months after that, it announced its corporate headquarters, for which Johnson City forgave five years of property taxes, would move to Charlotte.

At the time, company statements said it would “continue to have a presence in Johnson City” after the headquarters moved, although they didn’t specify the nature of that presence or how long it would stay here.

When that announcement came, local economic development officials said company representatives had assured them NN would keep jobs here and grow its employment to meet the requirements of the PILOT agreement.

The 2017 amendment gave NN until March 2019 to have at least 160 full-time employees on payroll. The company was required to report its employment numbers in May.

Last year, the company reported 72 employees, 88 shy of meeting the agreement’s minimum requirement. Clawback provisions in the contract require NN to make proportional payments based on the difference between the requirement and the actual employment figures.

According to Miller, NN’s building is valued at $6 million.

NN is also the recipient of a tax incentive program from the state of Tennessee.

State economic development offices were closed for Good Friday, and calls there were unanswered.

Johnson City Mayor Jenny Brock said Friday morning she was unaware of NN’s announcement, but said she was disappointed to see the company leave the city.

“This news is disappointing but not shocking,” Miller said. “The PILOT agreement protects taxpayers.”

Reported earlier:

After selling its local manufacturing plants and moving its headquarters, global NN Inc. announced Thursday it will totally leave Johnson City by the end of June, a surprise to some local officials.

In a press release posted to its website, the company, currently under a tax abatement agreement with the city Industrial Development Board, said the decision to close its shared service center in Johnson City better aligns with its strategic plans and makes the company more efficient.

Over the last three years, as NN gradually withdrew from the community, local economic development officials kept hope that it and the 200 high-paying jobs it promised Johnson City would stay.

In 2017, three months after the city amended its tax incentive agreement with the company to give it more time to create those 200 jobs, NN sold its bearings plants in Erwin and Mountain City. Two months after that, it announced its corporate headquarters, for which Johnson City forgave five years of property taxes, would move to Charlotte.

At the time, company statements said it would “continue to have a presence in Johnson City” after the headquarters moved, although they didn’t specify the nature of that presence or how long it would stay here.

When that announcement came, local economic development officials said company representatives had assured them NN would keep jobs here and grow its employment to meet the requirements of its payment in lieu of taxes, or PILOT agreement.

The 2017 amendment gave NN until March 2019 to have at least 180 full-time employees on payroll. The company was required to report its employment numbers in May.

Last year, the company reported 72 employees, 88 shy of meeting the agreement’s minimum requirement. Clawback provisions in the contract require NN to make proportional payments based on the difference between the requirement and the actual employment figures.

NN is also the recipient of a tax incentive program from the state of Tennessee.

Mitch Miller, CEO of the Northeast Tennessee Regional Economic Partnership, did not immediately return a call seeking information about the ramifications of the company’s announcement.

State economic development offices were closed for Good Friday, and calls to them were unanswered.

Johnson City Mayor Jenny Brock said Friday morning she was unaware of NN’s announcement, but said she was disappointed to see the company leave the city. A statement from the city and the Industrial Development Board will be released sometime Friday, she said.

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