|New tax plan for Town Creek
Developers to show alternate version of TIF to Lenoir City officials on Monday
Hugh G. Willett knoxnews.com
The Town Creek developers will present a new version of a tax increment financing plan to the Lenoir City Council and Lenoir City Industrial Development Board on Monday.
The new version of the TIF proposal provides $9 million in loans for roads and other infrastructure improvements to the 300-plus acre mixed-use development near Interstate 75 and Highway 321 in Lenoir City.
In November, the Loudon County Commission voted unanimously to reject a $20 million version of a similar proposal from the Town Creek developers that had already been approved by Lenoir City.
Commission members said that they could not support the plan because of the need to raise taxes for improvements to the schools.
The TIF plan uses incremental increases in property tax revenue created by development of the land to pay off the privately funded loans over a 20-year period.
The original $20 million proposal required county approval because about half the increased property tax revenue that would pay off the loan would have gone to the county.
"The $9 million represents the city's portion of the tax revenue in the original proposal," said Lenoir City administrator Dale Hurst.
According to the new economic impact plan submitted by the developers, the base tax amount for all property within the TIF zone is currently $96,688. After improvements to the property, it is estimated that as much as $841,236 in tax revenue over the base amount would be generated.
According to the plan that will be presented Monday, after paying service on the debt, the city could expect to receive a projected $211,236 in excess revenue by 2012.
Following a review and approval of the plan by the industrial development board at a public hearing on Monday, the plan will go to city council for a first reading that same night. The earliest the council would vote on the new plan would be at its meeting in January.
The new plan might be expected to find favor with the majority of the council based on their approval of the original $20 million version in early October.
During the previous approval process, only two council members; Douglas "Buddy" Hinesand Eddie Simpson, voted against the plan.
Among the reservations expressed by the two councilmen at the time included the length of the loan and the need for tax revenue to support sewer improvements along the Highway 321 corridor.
"I've just started looking at the new proposal," Hines said. "There are some things that are different, so I really haven't decided."
Hines said he finds it encouraging that the new proposal projects more tax revenue for the city.
There is also the issue of improvements to the sewer system.
The Lenoir City Utilities Board has been forced to stop adding new connections to the sewer lines along Highway 321 until a new 30-inch main line is installed. LCUB has been looking at increasing rates to pay for the improvements.
A delay in the installation of the new main line would delay development in the area and reduce the expected increase in property tax revenue.
The Town Creek developers have been willing to discuss helping LCUB pay for the improvements, and at one point during the presentation of the original plan, offered as much as $1 million towards the installation of the new line.
Hines said he understands that the issue of subsidizing sewer upgrades is still on the table.
"I've heard they might help with the sewer," he said. "I think that's another reason to evaluate the new plan."