UPDATE: Washington County leaders approve tax break for German company

UPDATE: The Washington County Commission has approved a tax break for “Project Starlight,” a plan to bring a German manufacturer to the county. 

The commission voted 10-4 to approve the resolution Monday evening. 

Officials say the move could create nearly 200 jobs. 

This is a developing story. Look for updates on WJHL.com. 

WASHINGTON COUNTY, Tenn. (WJHL) – A foreign company could bring 200 jobs to the area, and the Washington County, Tenn., Commission will vote on a tax break for the company at tonight’s meeting. 

The break comes from what’s known as a payment in lieu of taxes, or PILOT – an agreement that the county commission will consider for approval.

Commissioner Jodi Jones, who also serves on the county’s Commerce, Industry and Agriculture welfare committee in addition to the Johnson City Development Authority, said the agreement will give the company a tax break for three years.

Following the initial three-year period, the tax rate will increase by 10 percent over the next 10 years. The agreement also secures $60,000 in annual taxes from the company to go toward county schools.

In return, the company will provide 179 jobs for the region over a five-year period and bring in about $34 million in capital investments. 

Jones said due to a nondisclosure agreement, the company’s name can’t be released at this time, but she confirmed that it’s a German-based company that manufactures parts for heating, ventilation and air conditioning. 

“Our local people at (Northeast Tennessee Regional Economic Partnership) reassure us that it’s a very solid company, it’s an international company, it’s been around for a long time and they have reason to believe this company would bring a great deal of growth to our county and our region,” Jones said. 

The plant’s future home would be the county’s industrial park in Limestone near Grandview Elementary School, where parcels of land are prepped and ready for manufacturers to begin construction.

She added that the company is considering at least one other town for the move, so a PILOT would fuel the incentive for the company to move here. She said if approved, the company would bring 80 jobs in the first year and rent facilities in downtown Johnson City while the site is being prepped. 

“The county has spent many years investing in this industrial park. including millions of dollars in infrastructure,” Jones said.” It’s a little bit like laying out a field to grow crops and we’re ready to plant the seeds now and water it. So for the county to not come through on this vote would be letting that whole thing just sit.” 

Commissioner Jim Wheeler, who also serves on the county budget committee, said safeguards are in place within the contract to secure the county’s interests. 

If the company breaks the agreement, he said, the tax rate jumps to the full rate. 

“I’m pretty confident in the PILOT itself,” he said. “I think there may be some questions raised about other incentives where companies have left the area, but I think if you look at those, we have recouped what we have invested in those and they have had great economic impact on the county.” 

Jones added that the infrastructure that needs to be in place for the plant could entice future companies to move to the site.

And even if the company leaves the site in the future, the building will be primed for another tenant. 

“This company seems quite ready to come here,” Jones said. “They’ve already worked out an agreement with NETREP to begin using some downtown warehouse space rental. 

“They are ready to start using that rental property, hire 80 people from our community and start working here this coming year.”

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