22 Apr Sullivan County Commission to talk TIF on Monday, Kingsport’s new park could be sticking point
The commission, meeting in regular session at 9 a.m. Monday, is expected to consider tax increment financing for two new apartment complexes: River Bend, behind Walmart on Fort Henry Drive; and The Overook at Indian Trail, behind Kmart on East Stone Drive.
The Kingsport Board of Mayor and Aldermen OK’d the city’s participation in the two TIF agreements last week.
But for the two deals to move forward and be a “go,” a majority of the 24-member county commission must do likewise.
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The commission discussed both proposals at a monthly work session this past Thursday.
It was clear several commissioners are not convinced the proposals, as drafted, are the best choice for the county. At least one suggested the county needs school resource officers for more of its schools more than it needs the use of a city park that is going to use more than $800,000 worth of TIF money.
At one point in the discussion, Commissioner Eddie Williams, longtime chairman of the commission’s budget committee, said he is agreed with most of the comments in support of the TIF concept for the two projects — but he wasn’t sure deferring the issue a bit to try and get the county a better deal isn’t the best option at this point.
Williams said he’d gotten more telephone calls and questions about this issue than he’d received about any other in a long time.
Williams questioned whether the two developers are being treated equally, and was among those who questioned why the city of Kingsport will gain a city park financed by a portion of the TIF proceeds.
That riverfront park will be developed adjacent to the River Bend apartments behind Walmart — on land the developer swapped to the city, in part in exchange for the city building a road to provide access to the proposed apartment site.
City officials have said county residents will be free to visit and use the park.
Several commissioners said they could think of more urgent uses for the county taxpayers’ diverted money.
Under TIF, law allows a local government to dedicate a portion of expected growth in property tax revenue — projected to occur because the proposed development increases a property’s tax appraisal and assessment — to be used to pay for a portion of the development costs.
It typically has been used to pay for infrastructure and other improvements to help a developer recoup the cost of preparing a blighted area for new development.
The property owners do pay the total new tax bill, but the county agrees to divert a portion of the new tax revenue — for a set number of years — to payoff the agreed amount of development costs.
When retail projects are granted TIF funding, supporters often cite the expected economic impact from added jobs or growth in sales tax collections.
In these two cases, supporters have said the new residential units will create a direct and indirect economic impact, the latter attributable to money the apartment dwellers will spend at nearby businesses.
The doubters at the commission’s discussion on Thursday asked if these renters wouldn’t just be moving from old apartments elsewhere in the city — so their spending would not be “new” to the local economy.
Commissioner Joe Herron, one sponsor of the TIF proposals, said the new apartments are intended to house hundreds of newcomers to the city.
Herron said a main driver behind the need for the new complexes, which he described as “upscale,” is the recruitment of several hundred new employees by Eastman Chemical Company, as part of the company’s $1.6 billion “Project Inspire” — a seven-year expansion and modernization plan which includes construction of a new five-story $74.3 million corporate business center off Wilcox Drive near Lincoln Street.
Herron said these new apartments fill a need for this level of housing, which is desired based on results of a survey.
Herron said without these new apartments, those new Eastman employees will have to live in Johnson City in order to find similar housing options.
Developers have told the Kingsport Housing and Redevelopment Authority neither apartment project is viable without the incentives which would come through TIF.
Use of TIF had until this year been used in Sullivan County only for commercial development in redevelopment districts.
That changed when Sullivan County and Bristol Tennessee city officials agreed for TIF for an apartment complex in Bristol earlier this year.
Some county commissioners predicted then that the door was being opened to similar projects seeking TIF in Kingsport.
Sullivan County and the city of Bristol Tennessee earlier this year approved $1 million in TIF for the “upscale” apartment complex in Bristol.
Mitch Cox, of Johnson City, was the developer there.
Cox is now seeking TIF his proposed “River Bend” development.
And K.D. Moore, of Bristol, is seeking TIF for “Overlook at Indian Trail.”
Neither development includes government-assisted or “Section 8” housing.
The KHRA is involved because of the role it plays in redevelopment, not housing.
The Sullivan County Commission is scheduled to meet in regular session at 9 a.m. Monday on the second floor of the Sullivan County Courthouse.