Let's Tango

There are certain unexplained mysteries in the universe. The creation of the earth, the miracle of birth, the meaning of life, and for me, how Economic Development President, Pat Phillips, can continue to get local officials to sign on to any far fetched, wild plans he brings to them.

This time it's called "Project Tango." Phillips was able to get both Loudon City Council and the Loudon County commission to sign on to a deal that goes like this.

On the debit side, A mysterious company, rumored to be  Amazon.com, will get to buy 100 acres of Loudon/Loudon County industrial property at a $10,000.00 per acre discount, county/city loses $1,000,000.00. County/city agrees to spend $1,000,000.00 to developed the site for said mysterious company. County/city agree to give mystery company 10 year, 50% tax break. Lost tax revenue for county/city,  $255,461.00 per year or $2,554,610.00 over the 10 year discount period.

On the credit side. Mysterious company will not give name. Mysterious company estimates creating 325-1125 jobs. Mysterious company will not commit to locate in Loudon County/Loudon even after getting all the goodies.

I just don't get it. If Phillips had even one success, maybe elected officials should listen to him. Not sure how Loudon City voted but Commissioner Austin shaver was the only NO vote on commission. You can bet the president has been set now, every business, current and future will be expecting the same gravy deal from now on. Wouldn't doubt Tate-Lyle and Kimberly Clark both will be asking for the same deal shortly.

Below are the particulars on the project just in case you think I'm making this up.

 

Project Tango

Legislative Summary Report

County of Loudon/City of Loudon

August 12, 2011

Project Description

Size: 1,000,000 sq. ft.

Type facility: distribution center

Property size: 100 acres at Centre 75 and/or Highlands Business Park

Employment scenario # 1: 325 employees; scenario #2: 1,125 employees

Average hourly wage: $16.25 plus benefits

Investment: scenario # 1: $51,500,000; scenario # 2: $87,500,000

Project Incentive Proposal

Sell of 100 acres at Centre 75 Business Park at $15,000/acre

10-year, 50% Payment in Lieu of Ad Valorem Tax

Site development and infrastructure allocation of $1,000,000

Project Revenue and Expenditures

Annual debt service on $1,000,000 based on a 6-year amortization @ 3% interest rate:

$184,597.50 (total interest on debt $107,585)

Annual Payment in Lieu of tax for scenario #1: $255,461 (county portion $162,154; city portion

$93,307)

Annual Payment in Lieu of Tax for scenario #2: $318,505 (county portion $202,172; city portion

$116,333)

Existing market labor conditions

Loudon County unemployment rate, June 2011: 8.7% (2,140 persons)

16-county East Tennessee region unemployment rate, June 2011: 11.7% (58,310 persons)

Loudon County Workforce Region unemployment rate, June 2011: 10.4% (44,430 persons)

State of Tennessee unemployment rate, June 2011: 9.8%

United States unemployment rate, June 2011: 9.2%

15% of regions population lives in poverty

MSA lost 19.7% of manufacturing employment from 2007 2010

95% of Loudon County households spend more than 45% of income on housing and

transportation

11,980 or 67.9% of residents travel outside of Loudon County for employment (7,938 of these

residents travel to areas with the Knoxville MSA for employment)

The project has mandated that in order to be considered, all communities shall obtain the necessary

legislative approvals prior to September 1, 2011 for all incentives and land purchase.

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8/23/11