ROGERSVILLE — The Hawkins County Commission will be asked to start paying the principal on the $700,000 loan that built a 60,000-square-foot “spec building” at the Phipps Bend Industrial Park.
For the past two years the Hawkins County Industrial Development Board has been paying 2.67 percent interest on the facility as part of the loan agreement with U.S. Bank.
Industrial Developer Lynn Lawson told the IDB Thursday, however, that beginning in January U.S. Bank will require payments toward the principal on that 15-year loan in the amount of about $46,500 per year.
On Thursday the IDB voted unanimously in favor of asking the County Commission to make those payments until the spec building sells.
IDB chairman Larry Elkins said U.S. Bank has been very accommodating to the IDB with regard to the loan while attempts are made to sell the building.
New federal banking regulations prevent U.S. Bank from extending the “interest only” payment arrangement, Elkins added.
“They (the county commission) have not paid anything on it so far,” Elkins said. “We and the (Phipps Bend) Joint Venture (Committee) have paid all the interest payments and the county has not been out a dime on this thing so far.”
Construction of the spec building was completed last year. The goal is to sell the shell building to a new industry that will create jobs in the county and increase the county’s tax base.
Lawson told the IDB Thursday there is a manufacturer from China currently looking at the spec building.
At Lawson’s request the IDB also voted Thursday to authorize Lawson to offer the Chinese Hawkins County’s standard tax abatement plan which would save the company a projected $180,000 in real estate and equipment property taxes over the course of 10 years.
Companies that meet certain investment and job creation criteria are eligible for the county’s standard tax abatements program which allows tax breaks which decrease annually over 10 years, ending with the company paying 100 percent at the end of the 10 years.
“They’re coming back in next Wednesday, and what I would like to get is an approval for an abatement if they meet the criteria so I can have that for our presentation,” Lawson said. “This is their second visit so TVA is going to have all of their offerings out, Economic Development with Tennessee will have all of their offerings out. We don’t have them yet, and I want to be able to offer this to them.”
In related news, Elkins told the IDB that a letter has been sent to Joseph Construction, which built the spec building, seeking a permanent solution to ongoing roof leaks which still need to be addressed.
Elkins said a reply was requested from Joseph Construction by Oct. 5. After that reply is received the IDB’s Spec Building Committee will make a recommendation to the full IDB.
Elkins added, “I don’t want to prejudge what they (Joseph Construction) may say, but that committee will then look it over and meet with the consulting group, attorneys, and make a recommendation to the full board about what future action might need to be taken.”