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Crowe: State may be able to resolve Boones Creek business poaching concerns

David Floyd • Feb 4, 2020 at 7:09 PM

As the developer of the Pinnacle continues to push for legislation to prevent existing businesses at his development in Bristol to move to the proposed incentive district in Boones Creek, a local legislator believes there could be another way to resolve the developer’s concerns.

Now that the Johnson City Commission has approved the borders of a roughly 950-acre tourism and retail incentive district around Interstate-26’s Exit 17 in Boones Creek, the state has final say.

State Sen. Rusty Crowe, R-Johnson City, believes the commissioners of the Tennessee Department of Revenue and the Tennessee Department of Economic and Community Development, which will evaluate the borders, could incorporate this question into their decision.

“I think that we would either see that language in the document that’s produced by the commissioners when they hopefully approve of this, and at that point, we would not need legislation,” he said. “I don’t want to divide us. I want to bring us together.”

He would like to see a provision that prevents a store in an existing incentive district from uprooting and moving to another district to benefit from state benefits twice, but still allows an existing store to put a second location in an incentive district.

Former Lt. Gov. Ron Ramsey, now a lobbyist, revealed in January that he had been hired by Pinnacle developer Steve Johnson to push for legislation in the state legislature that would prevent the new incentive district in Boones Creek from poaching businesses in Bristol’s tourism zone, where the Pinnacle development is located.

Johnson told the Press Tuesday that he is still hoping to see legislation filed in the General Assembly’s upcoming session that addresses this issue. The deadline to submit legislation in the House is Wednesday. The deadline in the Senate is Thursday.

Johnson referred questions about the bill’s sponsor and the filing date to Ramsey. Ramsey didn’t respond to a request for comment from the Press.

Johnson said the 2012 law that created Bristol’s border region retail tourism district was drafted to allow projects on the border to compete with neighboring states, where the sales tax rate is typically lower.

He said the 2019 law that authorized the creation of the Boones Creek district, which was modeled after the 2012 law, creates unnecessary competition within the state and makes it possible for Johnson City, which he said already has a strong retail climate, to poach business from the Pinnacle. Losing a business, he said, would make it difficult for a developer to recoup the cost of attracting the retailer to their location to begin with.

“I’m all for competition and democratic free markets and all that, but when you have a law that competes against itself and potentially leaves the developer hanging, that’s the problem,” he said.

He said retailers in any existing project that stemmed from the 2012 law should be off-limits.

If there is a bill introduced, Johnson City Manager Pete Peterson prefers a policy that would prevent businesses already benefiting from a state incentive from closing down their location and moving to another location to receive a second incentive. But, he would want any proposed legislation to permit retailers that have already benefited from an incentive to open up a second store.

“That protects everybody,” he said. “It protects the free market system.”

Crowe said he’s talked to Ramsey, Peterson and people in the Boones Creek area and doesn’t think legislation would be the proper way to proceed. He sponsored the legislation that authorized the creation of the Boones Creek district in the Senate.

“I would rather do this in a way where we’re working together more regionally,” he said.

Johnson said any policy decision, whether its a law or a ruling from a state department, would need to last long enough cover the 30-year lifespan of 2012 law, which ends in 2042.

Mark Larkey, who’s part of a development group planning to construct a 100-acre, mixed-use development in the Boones Creek district, said Friday the district established by the city will “ensure hundreds of new jobs, millions of dollars invested in Washington County and much-needed monies for our city and county schools.”

“We don’t need an agreement or any new legislation by Ron Ramsey,” he said in an emailed statement. “We just need him to stop trying to mess up a great thing for Johnson City and Washington County.”

Campaign finance reports

Larkey and his partners on the 100-acre development, Joe Wilson, Bryan Sangid, Bucky Mabe and Clarence Mabe, pushed for the passage of the legislation that authorized the creation of the Boones Creek district. They have also faced scrutiny for a combined $45,000 in donations to a PAC that supported State Rep. Matthew Hill’s bid for House Speaker in summer 2019.

Hill, Rep. Micah Van Huss, Rep. Timothy Hill and Rep. Esther Helton co-sponsored the legislation in the House.

Recent campaign finance filings on Jan. 31 and Feb. 1 reveal additional donations from members of the development group to legislators who sponsored the Boones Creek law.

• Matthew Hill received $1,600 apiece from Mark Larkey, Bucky Mabe, Bryan Sangid and Joe Wilson all on Nov. 2. In his Jan. 31 filing, Hill reported a beginning balance of about $12,898.11 and $47,250 in total contributions.

• Micah Van Huss received $1,600 apiece from Mark Larkey, Bucky Mabe and Bryan Sangid on Nov. 4. He reported a beginning balance of $1,051.48 and $30,400 in total contributions.

• Timothy Hill received $1,000 from Mark Larkey on Jan. 3 and $1,000 from Bucky Mabe on Dec. 30. He reported a beginning balance of $842.45 and $89,500 in total contributions.

In a statement Tuesday, Larkey said the representatives support a conservative, pro-business platform and said he his is “proud” to donate to their campaigns.

“Frankly, I would like to see more people like them across our state in a position of leadership,” he said. “These gentlemen have proven they can execute in Nashville fighting for Upper East Tennessee, and I want them to have the opportunity to continue to do so. I would welcome and even encourage others to support them as well.”

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