|New Town Creek plan includes sewer
Developers of project in Lenoir City add more incentives to TIF
Hugh G. Willett
Wednesday, December 12, 2007
Developers of the Town Creek project in Lenoir City have added new incentives to a tax increment financing plan the City Council is expected to vote on in January.
The Lenoir City Industrial Development Board Monday unanimously approved a $9 million version of a TIF for the Town Creek development, which includes additional incentives for the city such as $2 million for new sewer lines in the Town Creek development and upgrades to the main sewer line servicing the area. That's double the amount offered by the developers in the original $20 million TIF, which was approved by Lenoir City in October but rejected by the Loudon County Commission in November.
The TIF uses property tax revenue generated by the development to pay off private financing of road and infrastructure improvements to the 300-plus acre mixed-use project near Interstate 75 and Highway 321.
The $9 million TIF plan has been submitted to the city council for study prior to its January meeting.
With a few exceptions related to the removal of references to Loudon County, the new $9 million plan is similar to the $20 million version.
The biggest changes to the overall proposal include the new incentives offered to the city by the developer as part of side deals that are not included in the economic impact plan approved by the IDB.
Perhaps the most important of these incentives is money for new sewer lines.
"Two million of the nine million dollars goes directly to Lenoir City Utilities Board," said Lee Krebs, consultant to the Town Creek developers.
One of the areas of concern regarding development along the Highway 321 corridor has been sewer capacity. Lenoir City has been prohibited from approving new building permits until LCUB makes improvements to increase the capacity of the sewer lines in the area.
As an additional incentive the developers will donate one acre of land inside the Town Creek development unencumbered, Krebs said.
"The city can use the land for whatever purpose it wants or sell the land and use the money for some other purpose, such as the building of a new fire station," Krebs said.
IDB chairman Tim Grindstaff questioned Krebs about how the developers were going to complete the project without the $11 million that would have come from county taxes under the original plan.
Krebs said that the developers are looking for more private investors to make up the shortfall. The developers looked at cutting back on some of the infrastructure improvements to bring the costs down closer to the $9 million in the TIF proposal but decided to seek more investors to keep the project "first class," Krebs added.
The additional incentives are the result of conversations the developers have had with the city administrators over the past few weeks, Krebs said.
Councilman Mike Henline, who voted for the $20 million version of the plan in October, expressed the desire for council to hold a workshop to discuss the TIF proposal.
Loudon county resident Larry Hawk, who spoke before county commission in November, addressed the city council Monday night expressing his dissatisfaction with the new TIF proposal.
"It's one thing giving this kind of support to industry that will bring in high paying jobs, but I don't think it's wise to give TIF funding to commercial development," Hawk said.