Johnson City will spend $100,000 to attract remote workers to the region, which will fund a program that would also offer perks like cash incentives up to $5,000 for applicants to move to the area.
Three local economic development organizations — the Northeast Tennessee Regional Economic Partnership, the Northeast Tennessee Tourism Association and Visit Johnson City — delivered a presentation to commissioners during the board’s meeting on Thursday to seek funding for the program.
The groups presented a 24-month request to the city totaling $300,000 that included money for marketing, administration and perks for applicants who decide to relocate to Johnson City. The $100,000 that the city provides will help fund the marketing push.
The organizations plan to run advertising in Dallas, Chicago and San Francisco — cities that have a large population of remote workers and a higher cost of living than Johnson City.
Among other perks, the program would provide cash incentives to remote workers based on their annual income: People earning $50,000 to $60,000 would receive $2,500 to move to the area, people earning $61,000 to $70,000 would receive $3,500 and people earning $71,000 to $80,000 would receive $5,000.
Applicants will receive 25% of the incentive upon moving to the area, 25% after living here for six months and the rest after living here for a whole year.
To be eligible, applicants must relocate to Johnson City or Washington County within six months, be a full-time remote worker, have a minimum annual income of $50,000, be 24 or older and be committed to reside in the area for one year. They must also participate in networking meetings and events and provide feedback about the program to directors.
NETTA Director Alicia Phelps said Johnson City is jostling with other regions to entice these workers.
“There is a bit of urgency that we want to put our name out there for folks because there are also going to be other communities that are similar to us that may also be competing for this,” she said.
Phelps said remote workers are beneficial to the city because they can help raise its median income, which attracts more business, and diversify the economy. Economic development officials hope to leverage existing amenities, such as outdoor recreation opportunities, enhanced internet access, local restaurants and the low cost of living, to bring remote workers to the region.
NeTREP CEO Mitch Miller pointed to another city, Muscle Shoals in Alabama, that has seen success through a similar program. The city initially launched its recruitment initiative in 2019 with a budget of $175,000 and was receiving 7 to 8 applications a month.
That number dipped during the height of the COVID-19 outbreak, but it picked up dramatically in 2021, ballooning to 100 to 125 applications a month. The city has recruited 35 remote workers.
Commissioner Aaron T. Murphy said he wants to see Johnson City grow, but he wants it to grow at an appropriate pace. He cautioned against feeling rushed.
“Quick growth is not the best growth,” Murphy said. “I know it feels like this rush — like we’re missing out — but I’d just rather have the right people here in the city rather than everybody and anybody.”
Responding to Murphy, Commissioner John Hunter said the region is actually falling behind.
“This region as a whole is losing people faster than we’re gaining,” he said, adding that Washington County is the only local county seeing population growth and even that is extremely slow.
Hunter expects people will think deliberately about the decision before moving.
“I think we would be looking at people who would fit in well and hopefully improve and become active in the community in a positive way,” he said.
Mayor Joe Wise said the region needs to move swiftly and cooperatively. He added that NeTREP, NETTA and Visit Johnson City have developed a plan with “significant potential.”
“I hope other partners will look at this as a model going forward,” Wise said. “Don’t start with the number you want. Start with the vision you have and tell us what that’s going to cost, and I thank you for doing it.”
Another local governmental body is on track to receive significant monetary damages in a lawsuit recently won against Endo Pharmaceuticals for its part in the opioid crisis that has gripped the region for several years.
The Town of Jonesborough Board of Mayor and Aldermen passed a resolution earlier this week to join the Baby Doe lawsuit as a plaintiff seeking monetary damages that the opioid addiction crisis has caused.
The case, filed four years ago by district attorneys general in Northeast Tennessee — First Judicial District DA Ken Baldwin, Second Judicial District DA Barry Staubus and Third Judicial District Dan Armstrong — had a hiccup a few months ago when the Tennessee Supreme Court ruled that district attorneys could not be the plaintiffs.
The court said in an opinion that municipalities and counties had to be the entities to sue Endo.
Since then, nearly every county commission, municipality and town government has voted to be part of the lawsuit, in which a judge awarded a default judgement against Endo last week. Sullivan County Chancellor E.G. Moody ruled that Endo had lied to the court and filed multiple documents to slow the case down.
Moody’s ruling did not assess damages in the case, but said they will be determined at a later date with a damages trial. The judgment details a dozen false statements Endo’s attorneys made to the court, describes a “coordinated strategy between Endo and its counsel to … interfere with the administration of justice,” and holds the companies liable for damages sought, an amount that totals $2.4 billion.
The 31-page judgment went into great detail about the lawsuit.
“It is obvious that monetary sanctions are not sufficient. Endo and its attorneys have not shown any remorse, admitted their wrongdoing or apologized to opposing counsel or to the court for their actions,” Moody wrote.
“Although this is a harsh sanction, justice demands it under the circumstances,” Moody’s order reads in part. “Anything less would make a mockery of the attorneys who play by the rules and the legal system.”
In addition to Jonesborough joining the lawsuit, Baldwin asked members to call local state representatives and senators to voice opposition to legislation that would give the state majority control over the money.
State Attorney General Herbert H. Slatery III supports the legislation — HB1132, SB 0558 — that would give cities, towns and counties in the lawsuit only 15% of unrestricted monetary damages that might be awarded.
The potential new law would give the state unrestricted control over 15%, then 70% would be split 35% and 65%, respectively, between counties and the state.
“Please, if you have any influence with our local legislators I wish you’d call them and register your opposition to any legislation,” that would give the state authority to — “I’ll call it usurping the lawsuit,” Baldwin said to the Jonesborough board Tuesday evening.
In a video of the Senate Health and Welfare Committee meeting on Tuesday, Sen. Ferrell Haile, R-Gallatin, stated none of the money would go into the state’s general fund and could only be used for “abatement,” purposes.
Haile also stated in the hearing that an amendment narrowed the scope of the bill and would have no impact on the Endo lawsuit.
Baldwin, however, said he wants to ensure the cities, towns and counties that are parties to the suit get the money they deserve to use as they see fit to address the opioid crisis.
“Right now, if we settle, the municipalities and counties will get 100 percent of the damages. Not only that, the counties and municipalities will decide where and how that money is spent,” Baldwin said.
“You would identify what you need here, which could be different from other locations,” Baldwin told the board. “You would control (approving) a possible settlement. If they offer $100 million or whatever, you would decide if you accept that.
“General Slatery’s legislation would take that away from you. He would take away the control over whether it’s settled and he would take over your control on how this money is spent if his legislation is adopted.”
On Wednesday, Baldwin said the attorneys for the counties and cities here would like to see language in the legislation to ensure the Senate amendment excludes the Endo suit.
Nearly every city, county and town in the three judicial districts has now joined the lawsuit, but Johnson City isn’t one of them.
In an email to Baldwin and the plaintiff’s attorney’s firm, Johnson City city attorney Sunny Sandos explained why the city chose to not participate.
“This matter was before the City of Johnson City Board of Commissioners on January 21, 2021,” Sandos said. “The agenda summary is attached. At that time, the City voted to not join the action as a named plaintiff. Since Washington County has chosen to participate as a named plaintiff, it has been determined by the City that Johnson City is not a necessary nor indispensable party, since causes of action which occurred in the corporate limits of the City are also within the bounds of Washington County. The City remains available to assist in any way necessary and fully cooperate with the action through production of documents or witnesses.”
Moody set a trial to assess damages for July 26 in Sullivan County.
A payment-in-lieu-of-taxes agreement with an international auto components manufacturer looking to create 206 jobs in the Washington County Industrial Park is on its way to the County Commission.
Members of the Washington County Budget Committee voted unanimously Thursday to send the PILOT deal for the unnamed company, which is being called “Project Stamp,” to commissioners for their final approval on April 26.
Alicia Summers, vice president of business development for the Northeast Tennessee Regional Economic Partnership, said the company — with 26 production facilities in 10 countries — is looking at sites in Tennessee, Michigan and Ohio to locate its first plant in the United States.
The vacant 380,000-square-foot former Alo Tennessee Inc. building in the Telford industrial park is one of two locations the company is exploring in Tennessee.
She told Budget Committee members the company “is expected to announce a decision on its new location within 45 days.” Summers said the manufacturer of bumpers, doors and other automobile components hopes to begin production in the United States by the first quarter of 2022.
Economic development officials say “Project Stamp” plans a two-phase $145 million capital development in Telford that will begin with 117 new jobs and wrap up in 2027 with an additional 89 jobs created.
Summers told commissioners the jobs will pay an average annual salary of $35,000.
Under the terms of the PILOT, the company would be responsible for submitting reports of new jobs created and their annual wages on Jan. 31, 2022. The agreement requires the company to have created 90%, or 105, of its projected 117 new jobs in Phase I by Dec. 31, 2025.
Those jobs are expected to pay an average wage of at least $17 an hour. Failure to meet those terms would result in the company having to repay 50% of the PILOT benefits it has received.
Phase II will require the company to have created 90% of its promised 206 jobs, at a minimum hourly wage of $17, by Dec. 31, 2027. Failure to meet those terms will force the company to repay 50% of its benefits from the PILOT.
Meanwhile, Summers said the company’s real property in the industrial park will remain on the county’s property tax rolls.
The tax abatement plan also includes new revenue earmarked for education and county schools, much like the deal Washington County reached in 2019 to bring German auto fan manufacturer Ebm-pabst to the Telford industrial park.