Had a meeting with the mayor last Monday morning to talk about the Border Region Act and liquor stores.
Mayor Brian Williams had a nine-page power point presentation waiting for me to explain how it all works. He said it is his intention to take this presentation to the citizens and educate them on the process. This is a good thing … of course it comes almost a decade after the Border Region Retail Tourism and Development District Act was passed and seven years into East Ridge’s participation. Better late than never, I guess.
There are a lot of moving parts to this state law, which simply stated allows East Ridge to capture a portion of the state sales tax to increase economic development.
The City of Bristol took a 200-acre parcel of undeveloped land on the border of Tennessee and Virginia and installed utilities and built roads making it site ready for retailers to come in. Bristol spent tens of millions of dollars of its own money to accomplish this. When retailers like Dick’s Sporting Goods, Marshall’s and Bass Pro opened, the state tax money (4.12 percent) went to Bristol to reimburse it for its cost for site preparation.
In Mayor Williams’ version of the way the Border Region works, the city enters into development agreements to incentivize businesses to build here. The business gets a portion of the state sales tax; in the case of the liquor stores it was 50 percent to them and the city gets to keep 50 percent. Other development agreements have been more skewed toward the businesses, with the city getting as little as 10 percent.
The development agreement itself virtually assures the city has a reimbursable cost, even though it has no up-front cost. The mayor says in this way the city has little to no risk. I get it. Well, this kind of model didn’t prevent the Mayor and City Council from imposing a 26 percent property tax increase this year, did it?
Another version, and I believe this version is the way the BR is designed to really work, is for the city to get all the state sales tax and give the liquor stores nothing. There was no need to incentivize these stores to build here, as 18 businessmen clamored and clawed to get into a lottery, for the right to build a store.
The city gets all the $7 million in state tax money and uses it toward the multi-modal project, which is a reimbursable cost. Of course, the city has to come up with the money for the long-term project. But the city will be able to pay the debt with part of the millions and millions coming in for the next 25 years.
The mayor is concerned about running out of reimbursable costs and “leaving state money on the table.” We’ve already asked and in large part have been approved for reimbursement of $20 million.
Here’s an idea, and it’s a big one that was batted around when the Border Region was brand new: why don’t city leaders pursue burying the hideous utility lines on Ringgold Road which aesthetically mar our commercial corridor? I have no idea of what the price tag for this ambitious project would be, let’s say $30 million. This would be completely reimbursable under the Border Region Act according to the city manager.
Here’s another idea: Formulate a paving schedule for primary roads (Spring Creek, McBrien, South Moore, Belvoir, Germantown) that feed into Ringgold Road. Cost? Millions of dollars that the city manager has said would be reimbursable to the city.
Talk about a major improvement to city streets and our commercial corridor that would most certainly attract businesses to East Ridge to bolster economic development. The mayor would not have to worry about “leaving money on the table,” would he? The big thing is that these projects would be a monumental improvement to the city and perhaps better the quality of life of its residents.
Of course, thinking big comes with risk. That’s where the term “risk/reward” comes into the vernacular. But I for one think it’s a risk worth taking. This is really how the Border Region is designed to function – invest in major public works to move the city forward economically. It ain’t some piece of paper to be manipulated and distorted by lawyers to get the city free money and the citizens the shaft.
I remember back when former Mayor Brent Lambert introduced us to the Border Region Act. At the time he said the new law would be a “renaissance” for the city. It was going to re-invent East Ridge. The phrase “go big or go home” comes to mind.
Think about it.
Mayor Williams has bought into this scheme of taking little-to-no-risk because he doesn’t want to stick his neck out. Not many politicians out there do, right? He doesn’t want to have to sell the good people of East Ridge on big-dollar public works projects that would undoubtedly improve the appearance of the commercial corridor but would come with a degree of risk. I get it.
I personally don’t think it would be a hard sell. Pave the roads, bury the power lines and insure the city has reimbursable expenses for the life of the Border Region Act.
I believe a harder sell is for the mayor to give his Border Region power-point presentation to a dozen or so people at the community center and justify how giving $7 million of taxpayer money to liquor store owners will move this city forward.