The Greene County Budget and Finance Committee granted preliminary approval to resolution Wednesday that would provide up to a $2 million intergovernmental loan to the Town of Mosheim, which Mosheim would use to install sewer lines for a development at Exit 23.
The approval is the first official movement on the development known as “Mosheim Crossing” in over two years.
The Town of Mosheim Planning Commission unanimously granted preliminary approval to a plat for the Mosheim Crossing development planned near Exit 23 during a meeting in March 2024.
The new development is planned for 30 acres of property adjacent to the Marathon gas station and Wendy’s fast-food restaurant at Exit 23 on U.S. Highway 11E.
The property developer, Joe Patel, owns and operates JPP Property Management and Joe Squared Construction based in Morristown. Patel has a license agreement with the international hotel chain Marriott for the construction of a 115-room hotel. The “dual-brand” hotel is expected to include a Fairfield Inn by Marriott and a TownPlace Suites by Marriott under one roof. There are several other lots in the development that are planned to be used for future restaurants and retail stores.
Grading on the site has already begun, however there have been issues with getting adequate sewer access to the property. The property is in Mosheim’s wastewater system’s footprint, however, a large sewer line must be laid from the property to connect to the existing system. The large capacity line will have to be laid all the way up side of West Andrew Johnson Highway to North Mohawk Road and then down the other side to connect to the system.
According to Greene County Mayor Kevin Morrison, it is estimated the cost of the utility line installation could be up to $2 million. The Budget and Finance Committee unanimously recommended helping the Town of Mosheim fund the sewer installation through an interest-free loan on Wednesday.
If the recommendation were to be approved by the County Commission, Greene County would provide up to $2 million to the Town of Mosheim in the form of reimbursements as the sewer line was put in place. Mosheim would pay back Greene County through point of collection local option sales tax revenue collected at the property being developed. Mosheim would provide the county what would normally be the town’s municipal share of point-of-sale sales tax revenue generated from the development parcels until the amount of funding borrowed from the county is repaid.
Half of local option sales tax goes directly to local school systems, while the other half goes to the government that has jurisdiction over the point-of-sale.
The portion of sales tax that goes to the Greene County and Greeneville City school systems would not be impacted by the agreement.
Greene County Director of Accounts and Budgets Danny Lowery estimated that the county would be paid back by Mosheim and “made whole” in about 18 to 36 months after the hotel and other businesses open on the property. Once the county is full repaid, Mosheim would begin collecting and keeping sales tax from the development properties as it normally would.
Greene County Partnership President Jeff Taylor, who has been a working with both the Town of Mosheim and Greene County as well as the developer to create an agreement, said that it would likely be about 18 to 24 months until the hotel is open.
Patel is expected to put $100,000 toward the sewer project as well.
Taylor told the committee that officials with the Tennessee Department of Economic and Community Development and First Tennessee Development District were “very complimentary” of the “creative agreement” formulated by Greene County and Mosheim. He noted the Mosheim Crossing Development at Exit 23 would be “transformational.”
Morrison said that the cooperation between Greene County and Mosheim would lead to positive outcomes for both the town and the county for years to come, and help generate vital non-property tax revenue for the county.
Kevin Morrison
The County Commission will consider the resolution on August 17. The Mosheim Board of Mayor and Aldermen could consider the agreement at its August 27 meeting.
TIF ALREADY APPROVED FOR PROPERTY
This will not be the first time the County Commission has been involved in the development.
The Greene County Commission unanimously approved a 20-year tax-increment financing agreement for the proposed development in late 2023.
The Industrial Development Board of Greeneville and Greene County and the Greene County Budget and Finance Committee both unanimously endorsed the tax-increment financing, or TIF, agreement before it was considered by the full County Commission.
Through a TIF, the property tax rate is frozen for qualifying properties for the purpose of tax collection only. Throughout the duration of the TIF for a property, the owner will pay property taxes at the rate they are assessed. Any tax collected above the rate at which the tax rate was frozen for the TIF goes into a fund that can be used to fund improvements to public assets. The funds can only be used to improve public infrastructure at the development, such as sewer lines and roads, and do not fund buildings or businesses planned by the developer.
The government does not assume financial risk on the project. The risk is taken on by the property developer.
The TIF agreement timeframe began on Jan. 1, 2025.
The proposed development is similar to one planned for the same site in 2018 that was known as “Mosheim Crossroads” and then “Mosheim Crossing.” However, the development and developer have no connection to the former development attempt that fell through.
Currently, the land being considered for development generates $1,381 in property tax revenue for the county, but once the development is completed, the property tax revenue from the site will be about $339,900 annually, according to the document. While the TIF is active, the county would receive the base property tax of $1,381 plus about $36,390 that is permitted to be used to pay general debt service. The remainder is invested back into the development’s public infrastructure. When the period of the TIF ends, the county receives all taxes.
When the project is fully developed, the annual local sales tax revenue was projected to be $705,000 in meetings in 2023, and the annual hotel and motel tax revenue is projected to be no less than $300,000, according to the impact plan presented at the time. The project is expected to support a total of 365 new direct jobs and 620 indirect jobs.
