The economic development proposal for “Project X” drew the most spirited debate this commission has held to date, eclipsing in vigor even the discussion of ending taxpayer-funded health benefits for commissioners.
At issue was whether to take $1 million from the county general fund and use it (through the county Industrial Development Board) to fund an incentive program designed to convince an existing Johnson City business to expand its operations here rather than moving those operations out of state.
Should the company stay, it would commit to hiring 25 to 75 additional workers, at salaries in the neighborhood of $50,000 – $55,000, and would invest $16 to $20 million in its local facilities. Should the firm choose to move its operations out of state, it would take with it more than 150 existing jobs amounting to an $8 million payroll. That’s quite a carrot and stick package.
To get any suspense out of the way, the commission voted 19-4 (with two absent) to approve offering the package to the company. The county should hear whether the company accepts the package within the next two to four weeks.
But it’s not so much the outcome that showed something about the character of this commission, it’s the manner in which the commission reached that outcome.
The discussion started with a disclaimer from County Mayor Dan Eldridge. The Washington County Economic Development Council has entered into a confidentiality agreement with the company, Eldridge told the commission. That agreement needs to be honored, Eldridge said, in order to protect the county from potential legal liability. County Attorney Tom Seeley echoed Eldridge’s statement.
Thus warned, the commission began its deliberations.
. Commissioner Sam Humphreys began by expressing disdain for the concept of confidentiality in an open government meeting, asking, “Who’s going to get the million dollars?”
Eldridge replied, “The owner of the company.”
Humphreys asked, “Is it a private individual?”
Eldridge replied, “We can’t disclose that.”
Eldridge explained that since the company had not made a decision on whether to remain in Johnson City or to move to another state, it did not want to burden its employees with uncertainty over their future before any decision is made.
Other commissioners raised valid questions both in favor of, and in opposition to the project. Commissioner Todd Hensley asked, “If you don’t support this, how are you going to replace an $8 million payroll?”
Commissioner Robbie Tester asked, “If we’re going to have open, transparent responsible government and be good stewards of taxpayers’ money, I don’t understand how we can sit here in good conscience and vote to spend a million dollars of taxpayers’ money to buy a secret building. I don’t even understand how that’s legal but I guess that’s a question for Mr. Seeley*.”
Before the commission voted, it heard from three county citizens who had asked before the meeting for the opportunity to address the commission. Commissioner Mitch Meredith expressed concern that one of them might have an inkling of the company’s identity and say something to blow up the deal. The commission voted in an overwhelming voice vote, however, to hear from the three. Each opposed the project. None spoke the name of the company.
When time for the commission vote came, four commissioners (Edens, Humphreys, Light and Tester) voted against making the offer. At least two others (Boreing and Ford) took protracted moments of consideration before casting their votes in the affirmative.
It was clear that the idea of handing a seven-figure check to a publicly unidentified company rankled many commissioners. But the possibility that the investment could lead to more high-paying jobs (and more tax revenue received without any tax rate hikes) was the determining factor for more.
In the end, no one blurted out the name of the company, not even those who opposed the project and who probably have a very good idea who the company is. No one stood up and made an $8 million mistake.
Perhaps most importantly, in the future, competing communities won’t be able to point to Washington County and tell potential employers, “You don’t want to do business in that county. They can’t even live up to a simple non-disclosure agreement.”
Because the Project X agreement is written with safeguards against the company failing to meet its obligations, I see it as a safe investment for the county, and one that might bear repeating if and when other local companies consider expanding their local operations (or moving).
Tennessee is a backward state in that it provides no economic development dollars to incent companies staying in the state, while it offers millions to attract new companies. Yet the return on dollars spent to get existing companies to grow is far greater than the return on dollars offered to incent new companies to move in. To those commissioners who believe Washington County has invented an out-of-the-box, ahead-of-the-curve solution in Project X, I offer a tip of the hat for your forward thinking.
And to those four or more commissioners who believe this is a million-dollar boondoggle, I offer a salute and thanks. The easiest thing to do would have been to derail this project, ethics and long-term consequences be hanged. But you didn’t take that approach. Thank you for representing the county with integrity when it may not have been easy to do so.
*The county attorney confirmed for the commission the project is legal.