County may get second shot at TIF changes

Nathan Baker • Apr 18, 2020 at 8:00 AM

The Johnson City Development Authority may return to the Washington County Commission for approval of a once-failed update to a tax increment financing agreement that would have saved taxpayers money.

Last year, County Commissioners voted 7-7 on changes to the agreement between the development authority and the county that would have altered the calculations for how tax collections in the downtown redevelopment district are shared and eliminated the authority’s debt ceiling for revitalization projects. The tie killed the update.

Had the commission approved those changes in February 2019, according to a letter to the JCDA from county Finance Director Mitch Meredith, the county would have kept $95,000 in collections that it now owes to the authority.

County commissioners briefly discussed the contractual TIF contribution at a Budget Committee meeting Wednesday. The full commission will need to approve an $80,592 budget amendment to fulfill the obligation.

The jump in expected contributions to the redevelopment district came because last year, Washington County reappraised the property within its borders. Assessed values of the properties within the TIF district grew more quickly than the county’s overall value, giving an unexpected boost to the district.

JCDA representatives warned commissioners last year that rejecting the changes to the agreement would end up costing the county more money, but commissioners opposed to eliminating the district’s debt ceiling voted against the new document.

Freddie Malone, who serves on the JCDA as the County Commission’s representative, said he believed more commissioners would be open to the agreement changes now that the fiscal effects are obvious. Contact between the authority and county representatives had been open, he said.

Joe Wise, a Johnson City commissioner who once served on the County Commission, said he believed some county representatives would take a hard line against tax increment financing regardless of the benefits to the county.

With a pandemic and JCDA in the middle of a multi-year redevelopment plan for the John Sevier Center and an attempt to change its management structure, he said it may be best to save the agreement update for another time.

“I think sometimes you’re arguing with people though with whom facts aren’t going to matter, it’s more about how the storyline works,” Wise said. “Bear in mind, the strongest opposition to TIF comes from people who have never come to the orientation or explanation meetings that JCDA have, so it’s really just about bloviating and posturing.”

Along with the amendments to the redevelopment agreement, county commissioners rejected JCDA’s plan to buy the John Sevier Center using tax increment financing. Instead, the authority took out a bank loan to buy the downtown apartment building.

Hank Carr and Shannon Castillo, who joined the JCDA board after the failed vote at the county, said they did not want to risk another rejection.

“I don’t think you ask this kind of question unless you know the answer, going at it without our homework being done is concerning,” Carr said. “I think we all agree that we don’t want to stub our toe again.”