County offers business tax help
 

Jeremy Nash news-herald.net

Loudon County Commission approved Monday a payment in lieu of tax agreement for a local company looking to consolidate at the old Fowler Furniture building near the Watt Road exit of Interstate 40/75.

Project Strength would be offered five years at 50 percent tax abatement combined on real and personal collected by the county of $39,608 annually.

The agreement would be contingent on the building being purchased and includes job creation requirements and clawback provisions equaling $792 annually for every new position not created.

Commissioners Matthew Tinker and Julia Hurley motioned and seconded, respectively, and the measure passed in a 8-2 vote. Commissioners Henry Cullen and Van Shaver were opposed.

“My understanding is they’re going to consolidate and expand,” Rollen “Buddy” Bradshaw, county mayor, said. “They’re going to combine, they’ve got three different sites, and they’re going to take those to one site up off El Camino Lane as well as add 50 new employees.”

According to a summary for Project Strength, the unnamed fabrication company is headquartered in Knoxville and has locations in Monroe and Loudon counties with a combined 100 employees.

Bradshaw said the county currently gets about $20,000 a year in taxes on the building.

“This is going to almost double that close to $40,000,” he said. “The one thing we never want is empty buildings, especially our industrial buildings, and so I think it was double win in the fact that we’re not going to have an empty building as well as be able to increase our revenue.”

Tinker voted for the PILOT because he worries difficult times could be coming for the economy, emphasizing some businesses may not survive the COVID-19 crisis.

“We will be getting an extra $19,000 worth of tax money that we wouldn’t get if we didn’t keep the business here,” Tinker said. “It also keeps all the of the jobs here, and the mayor had talked about jobs that are between $40,000 and $46,000. There are a lot of companies that may not survive this situation that we’re going through right now and those jobs will be needed, between 100 and 150 jobs.”

The county would require capital investment over the next three years of $9 million in personal property and $7 million in real property, as well as 50 new jobs with an average salary of $46,000.

Shaver considered the PILOT “corporate welfare.” During a commission workshop held an hour before the meeting, he referenced other companies that have benefited from PILOTs such as Del Conca, Tate & Lyle and Morgan Olson.

“Tonight we don’t even know what it is. We haven’t even seen the document,” Shaver said. “There’s no resolution. We voted on something that nobody knows for sure even what it is. That’s real bad. Weird circumstances, but we could have still had a resolution here in front of us. As you see, whatever this is that happens to people when PILOTs come before them, they just lose all sense and sensibility of taxes and revenue and stuff. I’m always opposed.”

Shaver said the “math will not support what people tell you,” saying everything the county does hedges around education and the cost of it.

“So when you start putting more children in the school system, the cost of education goes up,” he said. “So they’re talking about, ‘Well, we get $20,000, they’re going to pay $39,000.’ Five kids and you’ve lost your $19,000, so you can’t make the math work. If 50 people were — brand new 50 people were to move in here and brought one kid average, 50 more kids in Eaton (Elementary School), North Middle School, you know what that’s going to holler? ‘We got to have more space. We got to have more teachers.’ Average salary for a teacher, $45,000. You lost.”

Bradshaw does not see a negative for the county.

“We’ve been very selective over the last few years of PILOTs that we’ve even entertained,” Bradshaw said. “We’ve not entertained one in a while, and so you look at the salary. First of all, $46,000 is a very good salary, and so this is a home-based, homegrown company here and I think that’s important. They’ve also taken a vested interest in our schools. They’re looking at helping students get into welding and they’re wanting to work with our schools with that.”

Bradshaw also worries some businesses may not survive current difficult economic times.

“I think this is probably what they were waiting on,” he said. “I think they’d like to move pretty quick. The one thing is they look at it as an opportunity to really upgrade and bring equipment in. That building is going to need all the equipment that comes in with it. I think that’s the gist of it and the main reason they were seeking a PILOT.”

Had commissioners not approved the PILOT, Bradshaw said the business could have been lost to Monroe County.

In other news, Loudon County Commission:

• Added Cullen to the Tellico Reservoir Development Agency board.

• Denied rezoning 26 acres at Hickory Creek Road from R-1 Suburban Residential District to C-2 General Commercial District.

• Rezoned 4.7 acres at 12272 Highway 70 East from R-1 Suburban Residential District to C-2 General Commercial District contingent that a property owner can access his property from Kevin Lane rather than Highway 70.

• Rezoned 17.3 acres at 14542 El Camino Lane from A-1/C-2 Agriculture-Forestry District/General Commercial District to M-1 General Industrial District.

• Amended County General Fund 101, Highway Department Fund 131, General Capital Projects Fund 171 and General Purpose School Fund 141.

• Accepted a monetary bequest on behalf of the Loudon County Library Board for Lenoir City’s library.

• Approved application and acceptance of no-match Pettway Grants for Lenoir City Library of $3,000, Loudon Library of $2,500 and Philadelphia Library of $3,300.

• Approved distribution of revenue from the Del Conca PILOT.