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Commissioners to talk TIFs, PILOTs at meeting

Robert Houk • Dec 16, 2018 at 7:39 PM

Washington County commissioners will consider a resolution tonight authorizing the use of tax increment financing to buy the John Sevier Center. The $4.6 million TIF project includes the Johnson City Development Authority’s purchase of the low-income apartment building at 141 E. Market St., as well as covering closing costs and improvements to the former hotel.

The JCDA is also asking commissioners to amend portions of the 2008 redevelopment and urban renewal plan to bring it up to date with a 2012 state law. It wants commissioners to remove the TIF district’s current debt ceiling of $11 million and replace it with a figure based on 10 percent of the real property value in the downtown area.

The JCDA voted in September to buy the 10-story John Sevier Center. Officials plan to bring the units up to acceptable conditions, help transition residents to new housing facilities elsewhere in the city and then sell the Sevier Center to a commercial developer.

Commissioners are also being asked approve a payment-in-lieu-of-taxes agreement tonight for the redevelopment of a vacant warehouse in Gray. Johnson City developer Mitch Cox is buying a 90,000-square-foot building with an appraised tax value of $2,056,100 on 16 acres at 149 Old Gray Station Road.

The $3.5 million project calls for Cox to redevelop half the space as a distribution warehouse for Ashley Furniture, with the remaining square footage renovated for other retail clients.

The PILOT calls for the owner to pay no county property taxes for the building during the first two years of the redevelopment. The warehouse, which was built in 1974, currently has an annual property tax bill of $19,572.

Beginning in year three, Cox will begin begin paying 20 percent of the property taxes annually until the bill is increased to the full amount in the sixth year.

Commissioners have had several debates on the merits of TIF and PILOT agreements in the last two months, and tonight’s meeting is expected to produce a few more. Last month, Commissioner Robbie Tester joined Commissioner Kent Harris in voting “no” in approving the PILOT agreement in the Commercial, Industrial and Agriculture Committee. Tester said the county “should treat all taxpayers equally” in considering such deals.

Harris said last week he is “calling for a complete, independent and professional performance audit of all past TIF and PILOT projects in Washington County.”

In other business tonight, commissioners will consider extending an option tonight to buy 15 acres next to Jonesborough Elementary School by another 90 days while officials continue deal with legal restrictions placed on the sale of the Joe McCoy property.

Commissioners voted In January 2017 to authorize the county mayor to buy the property for $777,900. The purchase option has been extended several times with the latest set to expire at the end of this month.

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