Committee backs tax deal, takes another month on K-8 school

Robert Houk • Apr 10, 2019 at 7:04 PM

Members of the county’s Budget Commission voted Wednesday to recommend the County Commission approve a 13-year tax incentive deal to bring what one county official said would be a “great corporate citizen” to the Washington County Industrial Park.

“What impressed me most is that they seem to be very community minded,” Washington County Mayor Joe Grandy said of his meetings with officials of the unnamed German manufacturer.

The Budget Committee also decided to take another month to mull over options to fund Scheme 6 for a K-8 in Jonesborough before sending a recommendation to the full commission. Commissioner Jim Wheeler said committee members needed to do their “due diligence” in vetting funding options for the project.

“I think we need time to get feedback from interested parties,” Wheeler said, noting that members of the county’s Board of Education should be heard from.

PILOT Takes Flight

The committee did give its backing to a payment-in-lieu taxes agreement, or PILOT, that calls for a manufacturing company to create 179 new jobs and make a $37.1 capital capital investment in Washington County during a five-year period. Commissioners are expected to vote April 22 on a resolution to send the PILOT to the county’s Industrial Development Board, which has the power to implement the deal.

Commissioner Larry England told his colleagues he was impressed that the company has agreed to dedicate $59,000 annually in tax dollars for education in Washington County.

“That’s not typically something we see in these negotiations,” England said. “It’s nice.”

Terms of the PILOT call for the abatement of all taxes by the company during the first three years, followed by property taxes being levied at increasing 10 percent increments in each of the next 10 years until the company is paying its full tax bill.

The company would pay no personal property taxes during its first three years, but then be taxed annually at the normal rate.

Washington County is competing with a community in Texas and another county in Tennessee to land the global company, which makes heating and cooling components.

Alicia Summers, vice president of business development for the Northeast Tennessee Regional Economic Partnership, told the Budget Committee the German company is looking to spend $1.2 million to buy 30 acres in the county’s industrial park to build a 110,000-square-foot plant. She said the company hopes to expand that facility in another five to six years.

Summers said the company officials have visited the area a number of times and are “very satisfied they will be abe to fill” all the positions” they have agreed to create under the PILOT.

Scheme 6 Stalls Again

Budget Committee members said they needed more time to consider options for funding a K-8 school in Jonesborough. Commissioner Freddie Malone said whatever recommendation the committee agreed to make on Scheme 6 would likely be voted down by commissioners later this month.

The Board of Education approved a plan for a Jonesborough K-8 in October that calls for renovating Jonesborough Middle School and adding about 64,000 square feet to the building. Scheme 6 spent months in the county’s Health, Education and Welfare Committee before members decided to send the proposal to the Budget Committee without a recommendation.

Malone and other commissioners said they were disappointed with the sparse feedback they have received following a workshop on Scheme 6 held on April 1. Mitch Meredith, the county’s finance and administration director, told commissioners they would need to borrow at least $56.2 million to fund Scheme 6 and key school capital projects.

Half that borrowed amount would be shared with Johnson City schools, as required by state law.



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