Kingsport mayor hopes to use MeadowView tax to fund higher ed center

Rick Wagner • Jan 9, 2007 at 8:51 AM

KINGSPORT - A part of the city's quarter-cent sales tax about to pay off one debt could be redirected to a new one: building a new multi-college center downtown.

Mayor Dennis Phillips on Tuesday urged Kingsport Economic Development Board members to support the funding of the proposed higher education center downtown through a portion of the one-quarter percent sales tax levy. Most of that levy now goes toward the retirement of bonds that built the MeadowView Conference Resort and Convention Center.

The bulk of the MeadowView bonds will be paid off in September, although some will continue to pay off and operate the MeadowView golf course.

"Sixty percent (of the local option sales tax) is paid by people outside the city," Phillips told the KEDB members at their regular monthly meeting.

The mayor said he and other city leaders will return to Knoxville on Jan. 23 to meet with University of Tennessee officials in an effort to woo UT to the center, which also has sparked interest from the private King and Tusculum colleges and would be operated by Northeast State Technical Community College. City and UT officials met in 2006 in the Tri-Cities and Knoxville to discuss the matter.

Johnson City-based East Tennessee State University for now is not participating in the downtown center. That nixes a previous memorandum of understanding that outlined a plan for ETSU to move its Kingsport classes to the downtown center, which would be funded through the subsequent sale of ETSU's University Center near Allandale.

Phillips said the two critical questions for the center are a funding source and location, neither of which have been finalized.

Phillips said that according to attorneys, legally the tax cannot be rolled back without a referendum.

The Board of Mayor and Aldermen could set a referendum on sunsetting the tax but could not do away with it on its own, Phillips said.

Before the referendum to approve the sales tax increase occurred in 1992, city leaders sold the idea of the increase by, among other things, saying the tax would go away after the debt did. However, the resolution passing the tax increase did not and could not bind future city leaders to that.

"The Board of Mayor and Aldermen needs your support," Phillips said.

The city also is considering ways to fund a new school in the Rock Springs area, although Phillips at a recent city meeting said it was premature to discuss potential uses for the freed-up tax funds.

In 1992, Kingsport took on $19.5 million in debt to pay for the construction of the MeadowView Conference Resort and Convention Center and $6.2 million in two bonds for the construction of the Cattails Golf Course.

To pay off this debt, the city increased the sales tax in Kingsport by a quarter cent and earmarked the money toward the debt and operating subsidy for the center.

The quarter-cent tax raises around $3 million annually, with about a third of the money going toward the operation of the center and golf course.

The final payment on the center will be made in September. Beginning in fiscal year 2009, roughly $2.1 million will be available to the city. A large payoff on the golf course will be made in May 2011, leaving $520,000 freed up in fiscal year 2012. The final $130,000 debt payment on the golf course will be made in 2017.

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