Tax deal off for Loudon county company
LOUDON — A 10-year tax break approved by the Loudon County Commission last month for Tate & Lyle has been canceled, according to a company spokesman.
"We are extremely disappointed this agreement will be abandoned," Tate & Lyle spokesman Chris Olsen said.
In August, the commission passed a resolution to adopt an agreement that would give Tate & Lyle, a maker of various food ingredients and one of the county's largest employers and taxpayers, a 10-year tax break know as a payment in lieu of taxes, or PILOT. The Loudon City Council also approved the PILOT program in June.
The agreement — set to take effect in January 2017 — would have fixed the company's tax payment for the city and county for the next 10 years. The county would gain security for hundreds of jobs.
Under the terms of the agreement, Tate & Lyle would drop its appeal of a long-running property tax dispute involving the city and county. The agreement would have provided revenue certainty for the local governments and an incentive for Tate & Lyle to invest in its Loudon plant, Olsen said. "The opportunity will now be replaced with continued court appeals and uncertainty," he said.
Olsen said the reason for the cancellation arose after the agreement was reached and involved how property tax and adjustments over the next two years would be administered.
"The uncertainty over how potential issues would be handled created too much risk for the company," he said.
Olsen said several attempts were made to resolve the issue, but no resolution could be reached before a Wednesday deadline to withdraw the appeal.
"The decision by Tate & Lyle to not dismiss current
appeals is unfortunate, however the company's action was centered on
a business risk decision and not opposition to the intent and spirit
of the PILOT Resolution. Unfortunately there was insufficient time
to develop options to resolve the issues prior to the Resolution's
30-day time restriction to dismiss appeals. While an acceptable
solution exists to resolve Tate & Lyle's concerns, ultimately it
will be up to the County Commission and City Council to amend and
re-adopt a new PILOT Resolution. The reasons for entering into the
original agreement still exist and I believe that a modified
resolution is in the best interest of all parties."
County Mayor Buddy Bradshaw said the county will probably be settling the issue in court. He said he was disappointed the deal fell through after a long process of negotiation and approval.
"It was not a popular deal. A lot of people stuck their neck out for this," he said.
Bradshaw said he was confident Property Assessor Mike Campbell had done a good job calculating the property tax for Tate & Lyle. He also said there was an issue with an environmental certificate the company needed to file. "The certificate was required by state law," he said.
Loudon County has another PILOT agreement on the table with local concrete products company Van Hoose Co., Bradshaw said. The Loudon County Economic Development Agency is recommending a five-year PILOT deal that will secure a $12 million investment in a new plant to be built at the Blair Bend Industrial Park and projected to create 65-plus jobs.
According to EDA president Patrick Phillips, the EDA board recommended a 50 percent reduction in taxes for the company over the five-year period.
The city of Loudon and the county must each approve the deal. Commissioners should see the specifics in a meeting later this month, Bradshaw said.
Bradshaw said he's confident the deal will work out because Van Hoose Co. is on a growth track. "I think we are going to see this company continue to expand," he said.The Van Hoose Co. deal also offers a guarantee that at least 50 jobs will be created in the first three years of the program. If the jobs don't materialize, the company will have to pay the full property tax, Bradshaw said