Kingsport BMA candidates share views on economic development incentives

Matthew Lane • Apr 29, 2019 at 12:05 PM

KINGSPORT — When it comes to landing the next Amazon headquarters, Nissan plant or high-end apartment complex, the final decision almost always comes down to incentives. What do you plan to offer and for how much?

Kingsport has had a number of projects that required incentives in order to be successful, from the Town Park Lofts downtown to the East Stone Commons shopping center to the Kingsport Pavilion and the city’s first ever Target.

In the fourth of a five-part series, the Times-News asked the candidates running for mayor and aldermen in the upcoming city election their thoughts about Kingsport offering and providing incentives to business and industry for specific new projects. Here are their replies:


I think tax increment financing and payment in lieu of taxes can be a good idea to help out local businesses to start up and to help attract new companies to the area. We do, however, need to be judicious in how we use them. We need growth but it needs to be sustainable and to do that we can’t just give away tax revenue without knowing we are getting something in return.


Revitalizing our downtown is going to be key to competing with Johnson City and Bristol. I want the heart of our city to be as bristling and bustling as it was during our golden age, and I believe Tax Increment Financing (TIFs) and Payment In Lieu of Taxes (PILOTs) are a good step towards doing that. The logic behind these moves is that by giving initial tax breaks in the first few years of a business, the breaks will pay for themselves in the form of more revenue, more jobs, and more people visiting Kingsport. However, you must carefully evaluate each project on a case-by-case basis. You can’t just give someone a tax break because their buddy got one.


One question I am often asked is why we can’t have retail much like the Pinnacle that located in Bristol? The Pinnacle is an example of TIF money that has been used for attracting businesses and creating economic development. It has become necessary to be competitive in today’s business environment, and if we want to grow, we have to look at TIF money as an option. Our neighboring cities have used TIF money as a development tool for several years. In every case, before any incentive is given, we must evaluate the economic impact it would bring to our city and most importantly how it affects our citizens.


I still have some to learn about TIF and PILOTs. I do however believe that it would have to be looked at from a case by case basis. Some may be beneficial to the city and residents of Kingsport and at times it could cause problems down the road. Whatever we do as members and elected officials must be in the best interest of all of us as a city and not just for any of our own personal gain. If we help a big name anything with taxes or anything else, we need some promises from those names as well. The apartments downtown I believe will be nice, but I have not seen any numbers to make a call on how the taxes were handled. Twenty years seems like a very long time.


I think it would help to get things done around Kingsport and put builders back to work.


In the highly competitive economic development world we live in, TIF’s and PILOT’s have become essential tools for cities, counties, states, economic development agencies, etc. to attract business and industry investments. Thus, it is necessary that Kingsport be prepared to offer them. However, we must target projects that will give measurable returns yielding lasting benefits. Good quantitative evaluations are essential before offering tax incentives. We must continually work to improve our evaluations to enable the best long-term decisions for our taxpayers.


I favor incentives as long as they are mutually beneficial and the financial loss is short-term. If there is not an increase in tax revenues after the project is complete, then it was a bad deal. I realize each project is different, but the principle is the same. We as representatives of the people are to be good stewards of the monies taken in by the city.


Having been involved in regional economic development for the past 24+ years, I believe when we market our area to potential investors, we would be better off to market the entire region first to the company. Then when we talk to the company, we would put on Kingsport’s best efforts to show what we can do for them. The company’s proposal should give us a clear direction of the tax incentives that we would offer a company based on their capital investment and jobs (starting wages).


First let me say, the Town Park Lofts are my competitors. If anyone should be upset about that, I guess I should be. However, I believe competition is good. Kingsport has needed housing downtown, and the new TPL will help fill that void. These programs can be an excellent tool to kickstart growth. Will we lose some property taxes for some time? Yes. However, we did not have those property taxes, and over time they will be part of the property tax base. The other good thing is the people who live there will be shopping, eating, and spending money in Kingsport. That is very good for the city and does bring additional revenue.

I have never received either a TIF or a PILOT incentive from the city to build any of my apartments, but I have also never been in a position to invest $30 million into Kingsport. We can’t give those incentives to every business, but if someone comes to the table and they are willing to make a significant investment into Kingsport, we owe it to the citizens to listen. One change I would like to see us implement is when we approve one of those programs we stipulate that they must purchase a percentage of materials locally.


As a local elected official for over 10 years, I have always tried to approach this issue in a principled and practical way, voting for some incentives and against others. My guiding principles for supporting incentives are: 1) The project under consideration must not harm existing local businesses, 2) The potential for benefits to Kingsport citizens in terms of tax revenue and jobs must be reasonably high, and 3) There must be no significant adverse effects on the city’s debt because nothing we do should come at the expense of educational excellence or neglecting aging infrastructure and crumbling roads. I will continue to have an open mind on this topic, evaluating each proposal on its merits on a case-by-case basis. Priorities are a prerequisite for progress.


Economic development incentives are important tools for the promotion of growth in any community. We must be smart as to how we use these tools so that they show a real benefit to our community. These incentives must be consistent with our vision and align with our development strategies to promote new and existing business.

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