|Loudon eyes $20M TIF deal
Commissioners voice little support for taxpayer-funded plan; vote set for Monday
HUGH G. WILLETT
Thursday, November 1, 2007
Loudon County Commission may turn down a request for a $20 million tax increment financing deal negotiated between Lenoir City and Town Creek developers.
There seems to be little public support among commissioners for the TIF proposal, which representatives of developer Dr. Bob Overholt say is critical to the success of the planned retail, medical and residential development near U.S. Highway 321 and Interstate 75 in Lenoir City.
The commission, which heard the proposal from the Overholt group last week, is set to vote on the deal at its next meeting Monday.
“I’m opposed to it,” said County Commissioner Wayne Gardin, a Lenoir City resident. “We’re going to have to raise property taxes for improvements to the schools. I don’t see how we could justify this.”
Commisioner Don Miller said he believes the Town Creek project would be beneficial to Lenoir City and the county, but he also feels commercial real estate development should be able to “stand on its own two feet.”
“I don’t think it a good use of taxpayer money to subsidize it,” Miller said.
“It’s a valuable piece of land in a good location,” Miller added. “This project or another project will go ahead sometime in the future.”
Miller echoed Gardin’s comments about the need to increase property taxes to pay for capital improvements to county schools.
Town Creek developers brought the issue to the Lenoir City Industrial Development board for approval before presenting it to the Lenoir City Council, which voted unanimously to approve the deal last month.
At the Lenoir City Council meeting last month, Dennis Ragsdale, attorney for the Overholt group, said lack of county approval would be a serious setback to the deal.
Although the deal could be rewritten, the terms of repayment would be considerably different without county participation, he said.
“I’m not sure the underwriters would go for it,” he said.
The Overholt group did everything backward, from buying the land to presenting the issue to the Lenoir City Council before seeking county approval, Gardin said.
“They should have come to the commission before they bought the property,” he added.
The TIF proposal involves a $20 million loan from a private source that would be paid back through the incremental increase in property tax revenue as property is developed and the value of the land appreciates over a 20-year period. The money would be used to fund infrastructure improvements.
The Lenoir City Committee of 100 For Economic and Community Development Inc., an organization of Lenoir City businessmen and civic leaders, has been lobbying the county commission to support the TIF plan.
“We wanted the commission to know we believe this is a good method of supporting large mixed-use projects,” said Harvey Sproul, president of the organization.
Loudon County Mayor Doyle Arp said he is still absorbing the data from the three-hour Overholt presentation. Some commissioners may want to delay next Monday’s vote to have more time to review the numbers, he added.