PILOT agreement a possibility?

While Tate & Lyle made a property tax payment by the recent Feb. 28 deadline, the amount paid was lower than county officials anticipated based on recent rulings from the Tennessee State Board of Equalization over a personal property assessment dispute for 2011 and 2012.
The local company gave about $1.5 million, which is nearly $1 million less than the $2.4 million calculated by the county.
“It’s not as big a hit for the county necessarily as it would be for Loudon city,” Loudon County Mayor Rollen “Buddy” Bradshaw said. “I think it’s a little premature in their behalf to do this before the appeals are all sorted out, and that’s a great deal (of lost revenue). I think everybody in the county would like to pay just what they feel like they should have to pay and not worry about what the county says. I think it’s a little bit premature.”
Communication with Tate & Lyle has largely been through Loudon County Property Assessor Mike Campbell and Loudon County Economic Development Agency Executive Director Jack Qualls. Bradshaw has opted out of discussion with Tate & Lyle the last few months, noting with pending litigation, “sometimes it’s better to maybe stay out of it and kind of stay on the sidelines until we see exactly where we’re headed.”
Officials met with Tate & Lyle representatives on Feb. 22, the same day the company celebrated its official commissioning of a cogeneration plant. The project was estimated to cost $60 million.
“The discussion was — there’s been discussions if a PILOT agreement, payment in lieu of tax, is beneficial to resolve the dispute,” Campbell said.
Hopes are by implementing a payment in lieu of taxes, or PILOT agreement, pending litigation would be dropped, Campbell said. Historically the county has opted for five-year programs, but in some instances has gone up to 10 years, he said.
“That is an option to if we can reach an agreement between — a PILOT is adopted by county commission and city council and as assessor we work with the numbers but we don’t work with the PILOTs, but I know the background of the valuations,” Campbell said. “So, if it’s an agreement that can be accepted between the county, the city and the company and reach that level of acceptability on all three parts, it would potentially get us out of the litigation and so that we can move forward with — they can move forward, we can move forward and we can truck right on.”
A 10-year PILOT agreement fell through in 2015 that would have provided the city and county with annual lease payments of $2 million for real and personal property at the plant in the city of Loudon.
“We’re still open to discussing and looking for something that balances the local governments’ needs with Tate & Lyle’s,” Chris Olsen, Tate & Lyle representative, said.
Olsen was unable to say whether Tate & Lyle’s new cogeneration plant would affect the company’s property taxes.
“I certainly think it’s the right step to take if we can come up with something that we can both agree with that’s fair and equitable to the city and to them, and I think they would like to get it behind them as well so we could move on and at least then budget-wise we’d know what we’re dealing with and it takes the unknown out of it as far as waiting on the judge or a court to decide,” Loudon City Councilman Jeff Harris said. “That’s what we’ve asked Jack Qualls to be pursuing. I’m very open to it and would be in favor of it.”
With a revenue stream shortfall this year, Harris said Loudon department heads have been told to “tighten their belt” when preparing budgets. A shortfall ranges between $300,000-$400,000 for Loudon.
A decision on Tate & Lyle’s real property for 2011-13 should be given “soon,” Campbell said.
“We’re waiting on the final decision on the Tate & Lyle real property decision to be certified and that’s through the Assessment Appeals Commission,” Campbell said. “We are in reappraisal but we are also looking at the personal property of Tate & Lyle hearing to go before the Assessment Appeals Commission. ... The Assessment Appeals Commission rotates across the state and I don’t think we’ll see that this spring or summer, maybe this fall.”

Kimberly-Clark case ongoing

Local officials will meet with Kimberly-Clark representatives March 24 in regard to a recent appeal from the county over a property assessment dispute.
“We’ve had limited conversation with the mill manager and mill comptroller, so this is an opportunity to reach out to them and discuss our valuation differences,” Campbell said. “Again, if we can reach common ground of where we stand it might be something that the county or myself and the company can come to a reasonable end to the process.”
An appeal to chancery court was made Jan. 30 after the Tennessee State Board of Equalization ruled on the dispute late last year. At the time, the company presented an appraised value of $8.5 million for tax years 2011, 2012 and 2013. Loudon County valued the property at about $43.5 million for tax years 2011 and 2012 and about $39.6 million for 2013.
“The decision establishes a value of $35,700,000 for tax years 2011, 2012 and 2013,” Campbell said in a written statement. “... The basis of the appeal is that the Assessment Appeals Commission erroneously denied the Motion for Involuntary Dismissal at the conclusion of respondent Kimberly-Clark’s case. Also, the decision is inconsistent with Tennessee law. The decision should be reversed as well as the value should be no less than $39,500,000.”