BRISTOL, Tenn. – The wheels are turning on a downtown redevelopment project to be funded in part with tax-increment financing.
The city is seeking to amend its redevelopment plan for the Downtown Central Business District to include renovation of what is known as the McCrory building on State Street using tax increment financing, or TIF.
"This is just a new project proposal for now, but it would result in the renovation of the old McCrory building to use as retail space," said City Manager Jeff Broughton.
A public meeting will be held Wednesday to review the proposal and a revised map of the district. The Bristol Tennessee Housing & Redevelopment Authority will conduct the hearing on behalf of the city and Sullivan County. "At the meeting, the BTHRA will determine if they want to go forward," Broughton added. "It must be found to be a blighted area to qualify, but that process was already done before I came to town."
Should each entity approve the financing, the current property tax rate on the building would be frozen for a set number of years. That savings would then be reinvested in the property – the aim being to increase not only the value of the site, but the value of surrounding real estate.
"Normally, one of the qualifiers for TIF funding is that this must be a blighted area," said Mayor David Shumaker. "Considering that it’s been sitting empty for 10 or 15 years, it probably does qualify. The other thing is, does it provide jobs? I’ve heard at least part of it would be used for office space. That would mean jobs."
One argument against such financing has been that developers get tax breaks while the city loses revenue during the term of the agreement.
"Yes, the taxes would be frozen – they stay the same," Shumaker said. "But the taxes would be the same for a building that’s just sitting there. Taxpayers would benefit because the business created there would generate sales taxes, and a blighted area would be redeveloped."
The 29,000-square-foot building at 528-530 State St. was built in 1953. The property is owned by Bristol’s Grace Tree Investments. The group purchased the three-story building in 2004 for about $275,000. The property value was assessed at $109,000 in 2006.
The BTRHA and Sullivan County must also approve the TIF, a tool that has been used twice by the city for redevelopment and community improvement projects.
In 2004, West Ridge Plaza was developed on West State Street where Wal-Mart and Food Lion once stood. About $1.2 million in tax-increment financing was used.
In 2005, the Southgate Crossing shopping center – where Lowe’s and Food City are now – opened off Volunteer Parkway. About $4.7 million in TIF money was used for that project.
A TIF deal put together last year involving property on Volunteer Parkway between Shelby and Broad streets fell through when Cheddars restaurant pulled out in June.
Both projects were developed by Johnson & Associates.
ggray@bristolnews.com | (276) 645-2512
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