County Commissioners to revisit tax incentive plans

Robert Houk • Jan 27, 2019 at 8:40 PM

Washington County commissioners will get another chance tonight to vote on tax incentive plans for two prominent economic redevelopment projects.

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

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 supporting documents for the items had been added to the agenda just hours before the monthly meeting.

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

Both items return for action tonight on the commission’s regular agenda. Washington County Mayor Joe Grandy said he has also asked Mitch Miller, the CEO of the Northeast Tennessee Regional Economic Partnership, to provide commissioners with background information on the role TIFs and PILOTs play in the county’s economic development strategy.

“We are putting together information on the TIF district (in downtown Johnson City) and seven active PILOT projects,” Grandy said. “We will also take a few minutes to look at our overall goals for the next few years.”

The mayor said his goals was to provide commissioners “with the best information possible” to help them make their decisions. 

Commissioners joined JCDA members on a tour of the John Sevier Center earlier this month to hear from residents and managers of the low-income housing facility. JCDA Chairman Robert Williams told Commissioner Jerome Fitzgerald it “just makes sense to repurpose” the John Sevier Center to its “highest and best use.”

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.

Under the proposed new PILOT project, Cox plans to purchase a 90,000-square-foot building with an appraised 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.


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