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JCDA worries county commission will kill Sevier Center project

Nathan Baker • Updated Jan 12, 2019 at 1:10 AM

Johnson City Development Authority members worry a few county commissioners, hostile to public financing methods in any form, could impede their plans to purchase, improve and redevelop the John Sevier Center.

At the city board’s monthly meeting Friday, Chairman Robert Williams said some misconceptions repeated by commissioners about the impact and plan to use tax increment financing to fund a $4.1 million purchase of the historic former hotel, now an apartment building for residents receiving housing assistance, could torpedo the deal when the commission considers it this month.

“I’ve got some really serious concerns about the County Commission approving both requests that are coming up, which is really unfortunate,” Williams said. “This is probably the only chance that we are going to have to buy the John Sevier.”

Announced in September, the authority is under contract to buy the 10-story downtown building with a bank loan to be repaid using the rental income from the existing tenants and the proceeds of a tax increment financing, or TIF program. With the TIF method, future increases in property tax collections generated by increasing values within a district targeted for redevelopment are held in a separate account and earmarked for other development projects.

Over three years, authority members plan to buy the building, improve its unsatisfactory living conditions, work with private developers and federal and local housing agencies to provide new rental units and move the existing John Sevier residents to better equipped, more modern homes. Once the residents are taken care of, the authority plans to redevelop the building for commercial use, intending it to be a business anchor in the city’s blossoming downtown district.

But for that to happen, the Washington County Commission must first approve of the TIF expenditure. Some commissioners have already voiced opposition to the plan, characterizing the public financing method as a giveaway of taxpayers’ money. Last month, the TIF request, along with a proposal to increase the redevelopment district’s debt ceiling and a payment in lieu of taxes incentive package were pulled from the commission’s agenda to allow commissioners to learn more about the proposals.

JCDA member and Johnson City Commissioner Joe Wise said it may be a good idea to separate the payment in lieu of tax request for funding from a private developer from the TIF proposal, a public project, to keep county commissioners from confusing the two. Wise also advised authority members to meet with county commissioners who may be on the fence on the question to help explain the JCDA’s proposal.

“My concern in my head is I try to count to eight, one or two we have to have vote for this don’t represent incorporated areas of the county, and they have constituencies that gravitate toward the arguments against it, and so you think they’d very much feel pressure being caricatured as being dupes for the developers or dupes for the city and giving away millions of dollars,” Wise said. … “When you go to the diner, it’s all about who you gave the million dollars to. I think it’s too easy to simplify it when it’s going parallel with a (PILOT) request that doesn’t have as strong a case to be made as this one.”

With the ongoing partial government shutdown apparently delaying the authority’s application for an approval from the federal Department of Housing and Urban Development granting it the ability to receive funding through the Section 8 assistance program, Williams agreed that the best approach might be to delay the TIF request until February.

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