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Washington panel rejects TIF plan for downtown district

JEFF KEELING • Jan 12, 2007 at 11:12 AM

JOHNSON CITY - The Washington County Commission appears set to reject joining a tax increment financing (TIF) district in downtown Johnson City, a move that could cut available redevelopment funds roughly in half, Johnson City Development Authority board members learned Friday.

The County Commission's Commercial, Industrial and Agricultural Committee voted 4-1 Monday to recommend that the full commission not allow county property tax revenues to fall under the TIF district, JCDA Executive Director Bridgett Massengill told board members.

Members agreed Friday to work toward changing that likely outcome between now and the County Commission's Jan. 22 meeting. Rick Storey said board members were led to believe that the CIA meeting was simply needed to provide clarification on the TIF issue.

"I guess I was just disappointed in the way that was done," Storey said. "Maybe educating and understanding is what people need more of."

Tax increment financing in Johnson City's redevelopment district would allow property tax revenues within the district gained through appreciation and improvements - within certain limits - to return to the JCDA for use on projects and programs designed to improve the district's economic viability and success.

As property values and investment within the district increase, TIF proponents say, the resulting benefits to governments that allow the TIF - in the form of sales tax revenue and growth - can more than offset the relinquishment of additional property tax revenues.

The city of Johnson City already has approved TIF for its portion of property taxes within the redevelopment district, which stretches from the corner of West Walnut and Tennessee streets in the southwest to Interstate 26 and Walnut, north to I-26 and East 11th Avenue, and back west to Moorland Drive and John Exum Parkway.

The board's Craig Torbett said he thought the only reason the full County Commission had sent the TIF issue back to committee was to get the city and county on the same page in their approach to tax increment financing.

Board member and former Washington County Attorney Mark Hicks said he met with current County Attorney John Rambo, Massengill and a city representative to discuss the issue, and that he too expected Monday's committee meeting to be routine. Instead, CIA Committee members voted 4-1 to recommend that the full commission table the issue, essentially killing it.

"The motion just came up out of the blue, indicating there had been some groundwork laid behind the scenes," Hicks said.

He strongly suggested that JCDA board members attempt to inform commissioners about the real future impact of the TIF, and to seek permission to speak at the Jan. 22 meeting even if they are rebuffed initially.

"You're representing the citizens of the county," Hicks said. "I think it will be brought up, and I think your presence there will ensure it."

Torbett, who has been closely involved with the efforts to bring tax increment financing to the redevelopment district, said the practice is a very common and successful method cities use to revitalize their downtown areas. He said the JCDA will be allowed to use revenues for both projects and programs.

For instance, the developer of the old General Mills property may want to add some nice "streetscape" features as that property is developed. TIF funds could potentially be used for a project to provide similar features in the city blocks on West Walnut Street that adjoin the development.

Additionally, the JCDA eventually could develop grant or interest-free loan programs for downtown property owners to improve the facades or other features on their buildings, Torbett said.

Torbett said the recent turn of events disappoints him, and he hopes the county's participation in TIF can still be salvaged. He said he considers participation a win-win scenario for local governments. If growth within the redevelopment district is not successful, Torbett said, the JCDA won't capture funds that otherwise would go to the county. If growth is successful, resulting growth in sales tax revenues and property values around the district should more than offset the difference.

Torbett and Massengill showed figures from a couple of years ago showing that approximately $787,000 of county property tax revenues were generated within the development district, which amounted to 2.5 percent of the total. Johnson City generated about $800,000 the same year, which was 3.6 percent of its total.

Torbett said a rejection of the TIF plan because the county is concerned about pending building projects would be both shortsighted and unfair to downtown, particularly with the county preparing to vacate the Johnson City courthouse.

"They're pulling the Downtown Centre, and they're not willing to give us a tool to help replace it," Torbett said.

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