JOHNSON CITY, Tenn. (WJHL)- A local attorney is among those asking Johnson City Commissioners to delay a vote that would finalize the boundaries of a retail development district. The request stems partially from concerns over a perceived political favor and conflict of interest.
The controversy comes after state lawmakers passed the “Regional Retail Tourism Development District Act” last year. It allowed Johnson City Commissioners to designate a development zone that could benefit from tax incentives similar to those that paved the way for The Pinnacle in Bristol, Tennessee.
For months, the plan has been to develop a 940-acre piece of land off Interstate 26 at Exit 17.
Johnson City Attorney Don Spurrell said he was approached by several business owners who felt city leaders led the public to believe the Boones Creek property was the only area that fit the criteria to create a district laid out in the law. Spurrell and three others expressed this concern in a recent letter to Johnson City Mayor Jenny Brock.
“We think that criteria is met by just about every exit in Johnson City so that raises the question of whether the public has been properly informed,” said Spurrell in an interview on Tuesday.
Johnson City Manager Pete Peterson said anyone who claims he misled the public is being “very misleading themselves.”
Nathan Brand, the owner of Timber! on West Walnut Street in Johnson City, is among those asking Commissioners to pump the breaks. He’s pushing for a study to determine if the district would have a bigger impact downtown.
“What’s the reason that we can’t take time as a community and discuss this incentive district,” Brand said. “This is going to impact my children for their entire life. It will affect all of our lives from an economic standpoint and it could be a great thing.”
The law allows Johnson City to collect 75 percent of the state’s share of local sales tax generated within the district to attract new businesses. Johnson City’s Vice Mayor Joe Wise said the incentive package is based on incremental gain in sales tax.
“I don’t believe, as I understand the legislation and the incentive in question here, that it would work in an area that is already developed,” said Wise. “It’s very difficult to imagine that in an area that is almost entirely built up that there would be any incremental sales tax gain to speak of.”
“The Boones Creek exit is the only one that is surrounded by green space or undeveloped property, which makes a project like this financially feasible,” Peterson said.
Peterson added, in the eight months since the legislation passed, no other developers have reached out with alternative plans, perhaps because many of the other exits already have incentives associated with them.
Some worry that “pay for play” politics is behind the Boones Creek push.
Financial records show five developers of the proposed project donated $45 thousand to “People Working For Reform,” a political action committee created to support Rep. Matthew Hill’s (R-Jonesborough) unsuccessful bid for Speaker of the House. The donations were made after the bill he co-sponsored was passed.
“It makes me believe that this was a little bit pre-ordained and that’s another concern that we all have,” said Spurrell. “Nobody should gain an advantage politically by simply an expenditure of money.”
Peterson said he was not involved with the drafting of the legislation. He said city leaders heard the news after it passed the Senate and had no knowledge of the donations.
Rep. Hill was not available for an interview on Tuesday.
In a statement, Boones Creek Developer Joe Wilson said:
Regarding the timing of the support for Representative Hill’s run for the Speaker of the House, let’s not confuse the slanted messaging with facts. Senator Crowe, Representative Van Huss and Representative Hill began their work to pass this bill in 2018. The opening of the Speakership wasn’t known until the summer of 2019. Clearly these are two separate events. This is undeniable. With that said, when opportunity strikes, of course we would want to promote someone on this end of the state to Speaker. Representative Hill, Representative Van Huss, and Senator Crowe quite frankly did a remarkable job fighting for Washington County with the passage of the Regional Retail Tourism Development District Act. This was no small feat, and they will long be recognized for their contributions to our region. Future generations will benefit from their work, and we will see it in our schools, in our roads, and in our public services. Our representatives did their job of fighting for our county. Plain and simple.Joe Wilson, Boones Creek Developer
Some are also concerned about a potential conflict of interest on the Johnson City Commission.
Vice Mayor Wise owns an office unit within the proposed development district but he has not recused himself from voting. Wise said this decision was based on advice from the city attorney, who said this didn’t present a conflict because his property doesn’t generate any sales tax.
Spurrell said Wise could still benefit because a large scale retail development could increase his property value.
“By that logic, it would be very difficult for any property owner to make decisions on behalf of the city because the truth is a lot of decisions we make have the effect of potentially enhancing property values,” Wise said.
Peterson said on Tuesday there has been no discussion around delaying the vote set for Thursday on the district.
Wise said he plans to vote in favor of the current boundary designation.