Opportunity Knocks: Bill paves way for major development in North Johnson City

State Senator Rusty Crowe (above) and State Representative Matthew Hill (below) were instrumental in pushing the Regional Retail Development District Act through Tennesseeís General Assembly last week.

By Dave Ongie, News Editor

As State Senator Rusty Crowe reflected on the passage of a bill that may ignite major development around Exit 17 of Interstate 26, he summed the Regional Retail Development District Act that passed both chambers of Tennessee’s General Assembly in the final hours of the legislature’s first session as a golden opportunity for Johnson City, Washington County and the region as a whole.

“Everyone seems to think this is probably the major piece of economic development legislation in recent times for our area,” Crowe said during his drive back from Nashville last Friday.

The bill, which was co-sponsored in the House by State Representatives Matthew Hill, Timothy Hill and Micah Van Huss and sponsored by Crowe in the Senate, is nearly identical to the Border Region Retail Tourism Development District Act that was passed in 2011 that paved the way for The Pinnacle development in Bristol. The City of Johnson City will have the opportunity designate 950 acres within a half-mile of I-26 off Exit 17 as a regional retail tourism development district and leverage a portion of future sales tax revenues to incentivize development.

With time running out last Thursday, Crowe and Matthew Hill worked to reconcile differences between the version that passed the House and the one that ultimately passed the Senate. The major bone of contention was a provision in the Senate bill that would have only allowed Johnson City to leverage the state’s portion of sales tax revenue generated in the district for 15 years instead of the 30-year period laid out in the House version. The final version of the bill will allow Johnson City 30 years to collect and utilize a portion of the state’s share of tax dollars to help pay for the development of the district.

With the heavy lifting in Nashville out of the way, the ball will be squarely in Johnson City’s court once Gov. Bill Lee signs the bill into law. Johnson City’s Board of Commissioners will be charged with passing an ordinance, which will lead to the development of a master plan for the district that will need to be presented to the state for approval. City Manager Pete Peterson said the footprint of the 950-acre district will need to be plotted carefully.

“What has to happen at this point is the city’s got to adopt an ordinance asking the state to certify a location and a master plan for the development,” Peterson said. “So the proposed development, in order to qualify for the state certification, must generate a million visitors a year. It requires the investment to exceed $20 million to build the site, and it’s got to generate more than $2 million a year in state sales tax.”

If the City’s plan is approved at the state level, Johnson City will be able to begin aggressively recruiting businesses to locate around Exit 17. Armed with revenue from the state to pay for construction and virtually every other aspect of the development, Peterson is confident the city will be able to attract high-end retail, restaurants and entertainment with highly competitive incentive packages.

In fact, he said there is already a group interested in getting the ball rolling, so to speak, by developing some property near I-26. But with the potential to develop so much acreage, Peterson said the work of identifying properties and bundling them together into a district is just beginning.

“At this point in time, there is a group interested in doing something at the Boones Creek exit. Peterson said. “They have, to my knowledge, one parcel identified, which is not 950 acres. We’ve got an opportunity to develop 950 acres. It would be pretty foolish to be short-sighted and just propose something that’s going to be less than that.”


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