JOHNSON CITY, Tenn. (WJHL) – A report just released by the Johnson City Industrial Development Board gives insight into a company that recently announced it will be closing up shop in the Tri-Cities region.
NN, Inc. pledged to bring 160 high-paying jobs by March 2019.
In exchange of those jobs, the state of Tennessee dished out $2 million in incentives to top off a local property tax break that saved the company roughly $100,000 per year. That is according to Mitch Miller, CEO of Northeast Tennessee Regional Economic Partnership.
That report released Friday said NN, Inc. failed to meet the 160 jobs that it promised, showing that the company employed 53 people by March 9, 2019, 107 jobs short of the tax-related requirement. An additional 10 people working at NN, Inc. were baseline jobs that started with the company in 2014.
Based on a callback provision as part of the PILOT program, Northeast Tennessee Regional Economic Partnership CEO Mitch Miller said Friday that amounts to around $113,000 dollars owed, which will be split between Johnson City and Washington County.
“Ultimately, it’s just like paying your tax bill,” he said, “when tax bills are due, ultimately they’ll get a notification in the mail with the amount that they owe, so we’ll work with the Assessor’s Office in Washington County and also the finance department with Johnson City to make sure those numbers are accurate and the tax bill will be provided for NN to pay.”
Miller said he expects NN, Inc. to pay all of that money back.
“If NN were to expand here,” he said, “they were going to have generated zero taxes anyway, so this is money based on expectations of NN and ultimately what came from it were jobs during the time that they were here, so in terms of costing a general taxpayer any dollars, it’s zero.”
We asked Johnson City Mayor Jenny Brock what can be learned from this situation.
“We have to use incentives wisely,” she said, “but we’re in a competition now in today’s world and so we have to consider how we use them and when we use them, so it’s not just recruitment of new companies it’s also for retention of companies who are here.”
City Manager Pete Peterson said this could provide new opportunities for the area.
“We’re working real dilligently with an existing building here in the area to add a couple of hundred jobs that would more than offset a couple of hundred jobs that would more than offset what we’ve lost with NN and perhaps even provide additional tennants or a new owner for the new building,” he said.
Moving into the 2020 tax year, NN, Inc. willl owe 100% of the taxes for as long as the company owns its Johnson City building.
Just recently NN, Inc. announced its shared services center in Johnson City will be closing at the end of June.
In September 2017, company officials announced that NN, Inc. was moving its headquarters from Johnson City to Charlotte, N.C.