The Greene County Commission voted unanimously Monday night to provide the Town of Mosheim an intergovernmental loan of up to $2 million which Mosheim would use to install sewer lines for a development known as “Mosheim Crossing” at Exit 23.
The Mosheim Board of Mayor and Aldermen will consider the agreement at its meeting on August 27.
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 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.
There was some discussion on the matter Monday night, with a few commissioners expressing some concerns about providing the funding.
Commissioner Lyle Parton asked County Director of Accounts and Budgets Danny Lowery why the county would provide funding for the project, while also issuing a $3.2 million capital outlay note to correct plumbing issues at the Greene County Courthouse. Lowery said that the outlay note for the courthouse project was protecting the county’s capital as that funding would not be returning to the county once expended. However, he noted that funding provided to Mosheim would be paid back to the county through the agreement. He also noted that the development in Mosheim would bring in hundreds of thousands of dollars of revenue annually to the county through hotel/motel taxes and property taxes once the property was improved.
Commissioner Larkin Clemmer asked what would happen if the development at the site were to fall through, and therefore sales tax would not be able to be collected by the county as repayment. Greene County Partnership President Jeff Taylor said that possibility was highly unlikely as grading is already being conducted on the property, however, Lowery said if that were to occur the agreement gave the county the right to terminate any further funding to Mosheim if the project were to be halted. In the event of a default in the agreement, the Town of Mosheim would be required to repay any loaned funds from the town’s water and sewer enterprise fund.
In a response to a question by Clemmer, Taylor also noted that Mosheim’s sewer system could handle the capacity from a hotel at the site. However, he noted that upgrades to the town’s sewer plant could become necessary as the development grew to include restaurants and other businesses. He stated that the town is currently experiencing issues with some pump stations in the sewer system, but that the development would not impact any pump stations in the town.
Greene County Commissioner Brad Peters said that the county should think of itself and the Town of Mosheim as partners in the project as it will benefit both entities, instead of thinking of the situation as a “lender and a lendee.”
According to Greene County Mayor Kevin Morrison, it is estimated the cost of the utility line installation could be up to $2 million.
If the agreement were to be approved by the Mosheim Board of Mayor and Aldermen, 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.
Once the county is full repaid, Mosheim would begin collecting and keeping sales tax from the development properties as it normally would.
The developer is expected to put $100,000 toward the sewer project as well.
TIF ALREADY APPROVED FOR PROPERTY
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.
