Elizabethton planning director and interim City Manager Jon Hartman provided the answers during a Tuesday morning workshop at the EHDA boardroom.
Hartman provided the directors with answers from the proposed policies and procedures for the program and the TIF for the Watauga River Redevelopment Area, which includes property along West Elk Avenue that was formerly a part of the city’s two rayon factories.
Tuesday’s workshop came after the board delayed a vote on the plan during last week’s meeting of the board.
“We want to feel more comfortable about what we are doing,” Board Chairman Dale Shook said.
Hartman said he was happy to provide the board with more detail, but apologized that the city’s attorney on TIF matters was not able to participate in the workshop. He said he would refer any legal questions to the attorney.
Hartman told the board that most of the administrative work on the TIF would be done by the city’s planning office. He said the tax increment incentives would be coming from the EHDA offices.
Hartman said the TIF would mean the city and county would continue to receive only the taxes on properties in the district at the rate of development when the TIF was started. That would continue for 30 years before the city and the county finally receives the full property tax.
When a developer improves the property, the taxes will go up, but the city and county will only keep the same amount of property tax that was assessed before development.
Both the city and the county will send the rest of the taxes back to the EHDA. The agency would then repay the property owners the rebate, less administrative costs.
Hartman assured the directors that the TIF would be risk free for the EHDA and the city. Although the policy gives the EHDA the power to secure loans and acquire property in the district, Hartman said that would not be practiced.
He said the plan is for developers to assume all the risks and to make sure the city and the EHDA are “not out anything” if a project goes bankrupt.
Hartman said the city is also not interested in demolition of old buildings.
“We are are not going into that. The city has no interest in eminent domain or demolishing property,” Hartman said.
Hartman said the goal was to have viable plans. For that, he said a three-member panel of local bankers will be set up to developer plans and advise the EHDA Board on the viability of a project.
Following the workshop, the directors appeared satisfied with Hartman’s answers. Shook and Vice Chairman Larry Gobble said their concerns had been discussed.
The EHDA will consider the matter at its next board meeting May 22, unless an earlier approval is needed to meet a developer’s needs.