A company that committed to bringing 160 jobs to Johnson City is now closing its doors locally.
NN, Inc. announced it would relocate its corporate headquarters to Johnson City in 2014. The company has benefited from state and local tax incentives since 2015.
Local economic development leaders will have to decide in the coming weeks if they plan to take any of that money back now that the diversified industrial company is leaving town.
Mitch Miller, CEO of Northeast Tennessee Regional Economic Partnership (NETREP) said he’s disappointed by NN, Inc.’s decision. He said he’s not shocked since the company decided to relocate several corporate jobs to Charlotte, North Carolina less than two years ago.
In a statement, NN, Inc’s CEO and President Richard Holder said,
“The associates in our shared services center have worked diligently to support the business, and we greatly appreciate their efforts. We always carefully weigh decisions that affect our associates and we will work hard to support all team members affected by this decision. This decision, while difficult, will make NN a more agile and efficient company moving forward and better positions us to execute on our strategic plan.”
The move comes about five years after the company pledged to create 160 high-paying jobs by March of 2019.
In exchange, the state of Tennessee dished out $2 million in incentives to top off a local property tax break that saved the company roughly $100 thousand per year, Miller confirmed.
According to Miller, once NN, Inc. has no employees in Johnson City, it will lose any remaining annual incentives in its “payment-in-lieu of tax” (PILOT) agreement with the Johnson City Industrial Development Board.
Miller said the choice to enter the agreement was based on the potential for jobs with high wages and capital improvement.
He said NN, Inc improved the property value of the building by more than $2 million.
“From a value of the property standpoint, we have a much-improved building, which is going to make it that much easier to get someone in that facility moving forward,” said Miller when asked if he regretted the deal.
But NN, Inc’s success on other metrics, like job creation, are still unknown.
Miller said the company’s annual progress report is due May 9th and applies to the number of employees as of March 10th. He said this will allow economic development leaders to determine if the company met expectations.
“I think the biggest thing you can do as an economic development professional is to make sure that in the event that expectations aren’t lived up to or if something were to happen that the community is protected,” said Miller.
Miller said the company must show it’s employing at least 160 people in Johnson City/Washington County or pay additional pro-rated amounts based on the percentage it falls below that employment number.
Miller said he’s been in contact will NN, Inc. officials about meeting in the coming weeks to figure out next steps.