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Washington County commissioners delay vote on PILOT

Robert Houk • Dec 17, 2018 at 10:39 PM

Washington County commissioners voted Monday to delay action on a payment-in-lieu-of-taxes agreement with Johnson City developer Mitch Cox for a vacant warehouse in Gray, and well as put off a decision on a $4.6 million tax increment financing plan for the Johnson City Development Authority’s purchase of the John Sevier Center.

Cox said by a postponing a vote on his $3.5 million project until the commission’s meeting in January, he could “lose a tenant” in what he called “a time-sensitive” project.

Commissioners voted 11-3 to pull resolutions on the PILOT and TIF projects, as well as a related matter from the JCDA asking to raise the debt ceiling in the downtown TIF district, from their agenda after Commissioner Robbie Tester noted additional documents for the items had been included on the agenda just hours before Monday’s meeting.

County Attorney Thomas J. Seeley III said the resolutions, which had been approved by the Commercial, Industrial and Agriculture and Budget committees, did not represent a “notice issue” for the County Commission.

Under the PILOT, Cox plans to purchase a 90,000-square-foot building with an appraised tax value of $2,056,100 on 16 acres at 149 Old Gray Station Road. Cox said he plans 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.

“You help us for a couple of years and we will more than make it up for the county,” Cox told commissioners.

Commissioner Phil Carriger said he was looking forward to “a healthy and hearty” discussion among his colleagues on tax incentives and how to best create jobs at a daylong workshop commissioners have scheduled on Jan. 19. He also urged commissioners to “get off their duffs” and investigate firsthand the need for the JCDA to purchase the John Sevier Center.

The JCDA voted in September to buy the 10-story building and 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.

In other business Monday, commissioners voted 12-1-1 to extend an option to buy 15 acres adjacent to Jonesborough Elementary School by another 90 days while officials continue deal with legal restrictions placed on the sale of the Joe McCoy property.

The purchase option has been extended several times, with the latest set to expire at the end of this month.

Lowe’s Home Improvement corporate leaders have declined to remove restrictions from the sale of property next to Jonesborough Elementary School — land the Washington County Board of Education has said is key to its Scheme 6 plan for a new K-8 school.

At the urging of Commissioner Jim Wheeler, commissioners also voted to ask County Mayor Joe Grandy and Jonesborough Mayor Chuck Vest to send letters to corporate officials with Lowe’s asking the company to lift its property restrictions as a “public service” to the community.

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