Residential road divides Loudon County, city

Hugh Willett

Early delays in the construction of Tennessee National may have set the stage for a battle over who must pay for a road built to help promote the Loudon County golf community.

Under the terms of a March 5, 2001, intergovernmental resolution, the city of Loudon and Loudon County agreed to build the $1.3 million Tennessee National Parkway off state highway 72, splitting the cost 70 percent and 30 percent, respectively.

“We paid for the road to encourage development,” said Loudon City Manager Lynn Mills.

The original agreement called for the city to pay $910,000 and the county to pay $390,000, Mills said.

By late 2001, however, original development partners John Thornton and The Hines Group were running behind schedule.

Fearing that the project would stall, leaving the county to pay for a road to nowhere, then-county commissioner Jerry Park proposed a motion on January 7, 2002, where the county would withdraw from the road project if construction on Tennessee National did not begin by July 1, 2002.

The motion passed the commission by a six-to-two vote.

The Thornton/Hines project never materialized and new partners under the Medalist Corp. were brought into the development in mid-2004.

“As you can see, the county is under no obligation to honor the 2001 resolution and the argument could be made that with the 2002 vote, it may not even be legal to pay the $390,000,” said former Loudon County commissioner Van Shaver.

The issue re-emerged early this year when the city of Loudon presented the county with the bill for $390,000. At a county commission meeting last week commissioners debated how to handle the issue.

“We decided to seek legal council as to what our obligations are in this case,” said Commissioner Don Miller.

Miller said the commission wants to make a decision that is both legally and morally correct.

Mills said this is the first the city has learned about the 2002 resolution to drop out of the project.

“As far as the city is concerned, we signed an intergovernmental agreement to build the road and it is our understanding that the agreement is still in effect,” Mills said.

The wording of the agreement required the approval of both parties before any changes could be made, Mills said.

“The agreement is not open to unilateral moves by either party,” he added.

The county has been under the impression since at least 2004 that it opted out of the agreement in 2002, Shaver said.

“The question came to us again in 2004 or 2005 at a workshop or commission meeting as to whether we wanted to participate in building the road,” Shaver said. “At that time we all agreed that the project was not something we wanted to be a part of.”

Any obligation the county might have toward the road would be based on increased property tax revenue, Shaver said. The development’s slow growth has limited tax revenue to the county, he added.

According to Mills, Tennessee National turned out to be a good project, “good for the city and the county,” although development has been hurt by the economic slowdown.

“I think they have 30 homes under construction; the golf course is open and we anticipate further growth,” Mills said.