By Scott Robertson
Downtown Johnson City could soon get a boost from the Washington County Commission. The Johnson City Development Authority (JCDA) is asking the county for refinancing of a current TIF project relating to Northeast State’s Johnson City campus. The JCDA’s downtown development manager said the refinancing can free up more than a quarter million dollars annually for other downtown enhancement projects.
On Monday evening, the Commercial, Industrial and Agriculture Committee passed the TIF request on to the Budget Committee for consideration at this morning’s meeting. Should it pass there, it would move to the full commission.
In 2011, the JCDA purchased the Downtown Center from the county for $1 million. The JCDA used an additional $1.2 million for improvements to the building. The $2.2 million was to be paid out in TIF over a 10-year period. The project was financed through Eastman Credit Union with annual payments of $250,000. A five-year lease was then structured with Northeast State in which the college would pay $10 per year to the JCDA.
However, in November 2013, Northeast State approached the JCDA requesting another $1.2 million to finish renovations to the property. In April 2014, the JCDA approved the requested $1.2 million. The lease agreement was amended to a 10-year lease in which the college pays $272,880 over the first five years and $12,000 annually for the latter five years.
To date, the JCDA has paid off $1.2 million, leaving the current loan balance with ECU at $1 million. Under the proposed refinancing, the $272,880 annual lease payments wouldn’t be needed for loan payments, freeing up funds for other uses.
The JCDA has been in negotiations with ECU to refinance the remaining $1 million from the 2011 loan and the requested $1.2 million from Northeast State into one lump sum.
Dianna Cantler of the JCDA told the CIA Committee, “If we were able to incorporate the total amount of $2.2 million, the rate would be 3.89 percent for a 15-year term with estimated annual payments of $196,351.”
Cantler told the committee that with the refinance, the lease payments could be used for other downtown projects. “We could do projects that create jobs. We could do some redevelopment and historic preservation projects. We can look at parking, signage, beautification, events and infrastructure projects.”
The only potential hold-up was the fact that at 15 years, the amortization stretches past the expiration of the TIF district. Mitch Miller, CEO of the Washington County Economic Development Council told the committee he would address that issue before the budget committee meeting this morning.
