Fri
Mar 23 2012
05:27 pm
KaTom, TDC and Midway
By: Lisa Starbuck

Some of you may have wondered why I haven't posted about the recent announcement by The Development Corporation that they want to sell some property at Midway Road to KaTom Restaurant Supply, which is currently located just down the road in Hamblen County.

A big part of the reason I haven't commented before this is that the Midway property is currently involved in ongoing litigation. This is something that TDC knew all along because they are the ones who have been pursing the suit, since they didn't like the judge's original bench ruling in 2008. I wonder if they disclosed this fact to the KaTom people and to Knox County Commission, who is expected to vote on a PILOT grant for KaTom on Monday?

The lawsuit was heard today in Chancellor Fansler's court, but the judge has not yet ruled on today's proceedings. You can read Josh Flory's take on it here.

I wish someone would explain why TDC is asking Knox County Commission to vote on Monday on a PILOT for that property when the lawsuit on the property hasn't even been settled yet. And frankly, I expect the litigation on the Midway property to continue for quite some time if TDC persists in trying to put a business park there. The plaintiff's attorney, David Buuck, made that clear in this article.

Why aren't our economic development recruiters aggressively trying to locate KaTom in a suitable place in Knox County instead of on a piece of property that is so controversial? One that doesn't have sewer, and where there is nowhere for several miles for any of their employees to eat lunch or get gas?

You would think that TDC would have mentioned the fact that this property is in the middle of ongoing litigation before bringing it to County Commission. I know they said that KaTom's owner, Patricia Bible, came to them asking about the property, but shouldn't they have disclosed that this property is under a cloud and has been fought over for the last 10 years?

Why couldn't they have steered her towards locating her business in one of our existing near-empty business parks? Heck, we could have even GIVEN her the property since there doesn't seem to be much demand for it.

If KaTom was located next door to Sysco in the I-275 Business Park, or on I-140 in the Pellissippi Place business park, or any number of other suitable places in Knox County with interstate access, we'd be pretty sure that all these jobs they are talking about would be jobs for people who actually live in Knox County, which is not now the case. Nobody is going to drive every day from Hamblen County to West Knoxville for a warehouse job. But no doubt, people who live in West Knoxville would be happy to work there.

In fact, Ms. Bible has made it clear that the reason she wanted to be at Midway is to protect her existing employees. Those 63 jobs are already filled by existing employees who live in Hamblen, Jefferson and Sevier County, and they would be driving to Knox County to work. Why would we sell a greenfield for pennies on the dollar to create jobs for people who don't live in Knox County?

Ms. Bible has said that she thinks she could create more jobs within 4 years. But the PILOT we are considering offering her does not require that she create any jobs, nor does it require that those jobs go to Knox Countians, nor does it require that she has to stay in Knox County beyond the 4 years that she gets to be here tax free. What a sweet deal! Where can I get mine?

Some commissioners have said they are considering voting for the PILOT so they can get the property back on the tax rolls. But that's exactly what a PILOT is - a small payment made by the company instead of taxes - they won't be paying ANY taxes on personal property or real estate for four years. And there's nothing that stops them from leaving Knox County after the four years are up. There is nowhere for their employees to spend money at Midway Road, so those paychecks are going back to Jefferson, Hamblen and Sevier County. Since KaTom is a wholesale distributor, there won't be any sales tax collected.

So I have to ask - what is the benefit for the Knox County taxpayer? Maybe you should ask your commissioner the same thing?

Topics:
bizgrrl's picture

I was wondering if you would

Submitted by bizgrrl on Fri, 2012/03/23 - 6:59pm.

I was wondering if you would chime in. I saw the KNS headline, "Knox County switches sides on Midway court fight" and jbr's post at KnoxViews.

On Friday, though, county attorney Daniel Sanders positioned himself on the side of the plaintiffs. Sanders cited a 2010 vote by the county commission to reject a proposed sector plan that would have accommodated the business park.

"I believe that my client here has expressed its desire that the future land use ... be slated for low-density residential use," he said.

For his part, TDC attorney John Valliant said he felt like "I've gone into battle and I look back and I can't find anybody."

I was wondering if this was a good thing. I'd love to hear someone answer your questions.

yellowdog's picture

Food distribution jobs as economic development?

Submitted by yellowdog on Fri, 2012/03/23 - 7:18pm.

I'd hope we would not be spending public time and money on bringing distribution center jobs which almost never pay well or have benefits or are even safe. If we are going to screw up our rural areas, let's at least try to raise the standard of living around here.

R. Neal's picture

Check out their existing

Submitted by R. Neal on Fri, 2012/03/23 - 7:28pm.

Check out their existing facilities.

Lisa Starbuck's picture

Update

Submitted by Lisa Starbuck on Fri, 2012/03/23 - 7:32pm.

I've forgotten how to make the strike-through tag, so I have just edited all the places I mention a 5 year PILOT to accurately reflect that they are asking for a 4 year PILOT.

The deal is that they are only qualified for a 3 year PILOT, but TDC is asking Knox County to make it an even 4 year. I knew they were asking for an additional year and that's where I came up with five. My bad.

Lisa Starbuck's picture

Another Update

Submitted by Lisa Starbuck on Fri, 2012/03/23 - 7:38pm.

Here's Mike Donila's comments on the PILOT. He also thinks the location choice has to do with her existing employees being able to drive to Knoxville to work here.

Don't get me wrong, I'd love to see KaTom locate in Knox County, just not on a greenfield. And I'd like to see some guarantees about the quality and number of NEW jobs to be created, with significant penalties if they don't materialize.

Even MPC staff, when writing their original draft of the East County Sector Plan, said that the Midway property wasn't suited for distribution/warehouse businesses because they chew up a lot of land for not very many jobs, and the jobs usually aren't well paying.

vernon's picture

there is industrial

Submitted by vernon on Sat, 2012/03/24 - 10:17am.

there is industrial development all over Knox county, what makes you so special that no development should occur at Midway.Its good property close to the interstate and you now have an interested business that wants to go there and create jobs.That NIMBY attitude is getting old. The development of this type will not destroy your community,if it does you don't have much of a community- its time to move forward with Midway.

vernon's picture

I know know in this circle

Submitted by vernon on Sun, 2012/03/25 - 10:31am.

I know know in this circle its not cool to like turkey creek,I assume that's what you re speaking of.I d call that an overwhelming success,creating windfalls in revenue for government, retailers, and the residents of that area.There was also a significant portion of that development set aside as a protected wetland area.The city has been carried by that development in recent years.Prospective home buyers consider proximity to that area a high priority.Is that really what scares you?
The point is as a tax payer in Knox County I am thankful for the foresight to have these parks built and ready so that when companies come calling we as county are prepared.I know you were falling all over yourself at the prospect of Sierra coming to a park in Alcoa,would you have been against that move if Midway had been built and they had considered it?
As a lifelong resident of this area,I can remember a time when our community recognized the need for business development to grow this community.Thats one of the reasons we have a thriving community,lets not lose sight of the need for growth,good jobs, and development.

vernon's picture

and as a life spectator and

Submitted by vernon on Mon, 2012/03/26 - 8:43pm.

and as a life spectator and critic of the accomplishments of others,i guess you can see that the national retailers that thrive there and the masses of people who shop there would rather buy and sell mops for 5 bucks than embrace whatever community need of the month your emotions engage in-and life long means nothing to you because you are not invested,You love to discuss where people live-one bad turn of the staffing wheel and you move on back VA or some other academic stint-anyway I m sure glad to hear Midway is moving forward-wetlands, green-fields, and all

bizgrrl's picture

Pffft. I think the Turkey

Submitted by bizgrrl on Sun, 2012/03/25 - 10:56am.

Pffft.

I think the Turkey Creek stores are just fine. My problem is the design of the shopping area. They should have made it more pedestrian friendly with lots of trees, etc. The main drag through Turkey Creek is getting dangerous as are the parking areas. No one is watching what they are doing and they don't seem to care.

In speaking with a rep of the City of Alcoa Engineering department, they said the new shopping center being developed in Alcoa will be like Turkey Creek, as if I would go, oh goody. I told him Turkey Creek is not the model to be followed. He just didn't get it.

He also said it will bring more sales tax revenue. Again, Pffft. I don't care. There's not just more income involved, there is more cost too. In the long run I don't think local governments are keeping up with existing infrastructure and they are creating more infrastructure they won't be able to maintain.

jbr's picture

It seems like people in Knox

Submitted by jbr on Sun, 2012/03/25 - 11:56am.

It seems like people in Knox County would not buy any more shoes, rakes, shirts, etc. than they would otherwise, because of a Turkey Creek like development. Is there statistical data analysis tying more total Knox County sales to Turkey Creek?

I might see more people coming from other counties to buy things, is there data tied directly to that?

"creating windfalls in revenue for government, retailers, and the residents of that area" does Knox County as a whole get a windfall, or is it just in that area? Does MPC or an economic research entity at UT, etc have data to clarify?

As far as "Prospective home buyers consider proximity to that area a high priority" would it be that "some prospective home buyers ..."might like it. While some, maybe even far more, would consider not being in a proximity to that area a high priority. It seems it is part of the responsibility of county government to provide for the existence of areas that are the opposite of Turkey Creek, and points in between, for people that want a home that they consider a desirable quality of life in which to live.

bizgrrl's picture

Excellent points. Just out of

Submitted by bizgrrl on Sun, 2012/03/25 - 4:41pm.

Excellent points. Just out of curiosity, what is the opposite of Turkey Creek?

Rachel's picture

Pedestrian friendly, for one

Submitted by Rachel on Sun, 2012/03/25 - 7:06pm.

Pedestrian friendly, for one thing. Not chewing up greefields and a wetland for another.

Lisa Starbuck's picture

Vision

Submitted by Lisa Starbuck on Sat, 2012/03/24 - 11:26am.

Vernon, first off I am not a NIMBY - I don't live near Midway Road. Some people have used that fact to attack me, but the reason I care about this issue is because I love Knoxville and I see the last undeveloped interstate exit in Knox County as a fabulous opportunity for us to do something special with it. Not a business park, not another mecca of Cracker Barrels, Pilots, McDonalds and Motel 6's, but something extraordinary.

I was on a committee that was appointed by Mayor Burchett to brainstorm concepts for the property that was headed by Gloria Ray before she stepped down as head of KSTC. There were some fabulous out-of-the-box thinkers on that committee, including folks from ORNL, TVA, etc. and we had been working on some exciting concepts that would truly make Midway an economic development engine.

What is really needed for that property is a cohesive plan, not a bunch of hodgepodge development unless we do want to see the Gateway to Knoxville become just another interstate exit. Now that "we the people, the taxpayers of Knox County" own that property, we have an opportunity to do something special, unless our leaders sell us out.

Scarlett's picture

Our Leaders

Submitted by Scarlett on Mon, 2012/03/26 - 11:22am.

Now that "we the people, the taxpayers of Knox County" own that property, we have an opportunity to do something special, unless our leaders sell us out.

Midway is special. Midway is very valuable. That is why THEY keep trying to get a toe in. Any toe will do. Then a foot. The foot is waiting.

Many were surprised that CB zoning was given to a metal recycling business backing up to the property of the new Carter Elementary school , by our leaders , despite the Knox County Ordinance in place not to allow it. Sell out sounds about right.

jbr's picture

Can the mayor task another

Submitted by jbr on Mon, 2012/03/26 - 5:26pm.

Can the mayor task another entity, like your committee for instance, to be responsible for what happens with Midway? And place TDC out of the picture? I think funds TDC had budgeted for Midway would then be given to the committee for use for their eventual plans for Midway.

jbr's picture

Midway Road ideas

Submitted by jbr on Wed, 2012/03/28 - 12:29am.

When we see a group working on ideas for Midway Road that has people from organizations doing this sort of work .....

Engineers at the Oak Ridge National Laboratory in Tennessee have developed technology for embedding in a highway electric coils that transfer powerto similar coils that could be built under cars.

Article



continued...

and ...

At the Oak Ridge National Laboratory in Tennessee, a group of scientists and engineers are experimenting with the future of manufacturing. They're making lighter, sturdier products in a fraction of the time usually required, and expanding the boundaries of what we can fabricate.

Article

and we seem to toss them aside for this sort of thing ....

Editorial: KaTom vote will send message on business climate
County Commission approves tax incentive for Midway business prospect

Something in our system seems more than a little out of whack.

Lisa Starbuck's picture

Committee

Submitted by Lisa Starbuck on Thu, 2012/03/29 - 12:39am.

I was encouraged to hear Dean Rice say that the committee will be reconvened at some point with a new leader, so hopefully all the work product and ideas won't be lost. Thanks to Commissioner Amy Broyles for asking about it, and to Commissioner Tony Norman for agreeing that a plan for Midway is needed.

Lisa Starbuck's picture

Another Update

Submitted by Lisa Starbuck on Mon, 2012/03/26 - 10:22am.

Look below the trees to see where Betty Bean shows us the numbers on KaTom's proposed sale for pennies on the dollar, while the editorial team at the News-Sentinel lays on yet another cheerleading editorial that is slim on the facts and heavy on the spin.

jbr's picture

When the NS writes articles

Submitted by jbr on Tue, 2012/03/27 - 11:55pm.

When the NS writes articles like that instead of digging for facts and even handed reporting, it contributes to a drift into irrelevance. The people who will be influenced by that sort of article are decreasing in numbers.

reform4's picture

Thanks to the Shopper

Submitted by reform4 on Thu, 2012/03/29 - 9:43pm.

.. for doing the real journalism in this town.

yellowdog's picture

Claw backs? Decent jobs?

Submitted by yellowdog on Tue, 2012/03/27 - 10:05am.

I am still astonished that there seems so little interest in what kind of jobs would be "created" by this distribution center and whether they are the kind of jobs people would want to subsidize and encourage. What will they pay? Health insurance? Pensions?

Will there be provisions to get the money (subsidy) back if the company does not make it or leaves?

The objective of government incentives, if you believe in them at all, should be to raise the standard of living in the area.

Factchecker's picture

jes' sayin'

Submitted by Factchecker on Fri, 2012/03/30 - 7:26pm.

The first ORNL idea above is nuts. When this was announced I calculated it would take a transfer of something like a million watts for an electric car traveling across 90 feet of coils at 60MPH, and this would have to repeat every mile to sustain the car's motion.

bizgrrl's picture

Problem temporarily averted

Submitted by bizgrrl on Fri, 2012/04/06 - 4:11am.

KaTom going to Sevier County. Maybe they figured out there is ongoing litigation.

R. Neal's picture

Wonder what was wrong with

Submitted by R. Neal on Fri, 2012/04/06 - 6:51am.

Wonder what was wrong with this property?

WestBridge - 52500 Bldg on Eighteen Acres

Or this?

1550 Amherst Road

Or this?

5335 S National Dr

bizgrrl's picture

Good question regarding the

Submitted by bizgrrl on Fri, 2012/04/06 - 7:14am.

Good question regarding the Forks of the River location.

vernon's picture

privately owned with no

Submitted by vernon on Fri, 2012/04/06 - 7:36am.

privately owned with no incentives,also the owner is an arm of Fuji corp,on the 52500 on Caneel at weighbridge won t separate excess land from the building,great building though,maybe best in the county.Its hard to get market dollars for industrial land,which should be around 80 an acre in west bridge, when you can get the land at around 30 an acre through the TIF program from dev corporation or go to roane county and they ll give you the land for free if you can show some ability to create jobs.

R. Neal's picture

Sounds like County Commission

Submitted by R. Neal on Fri, 2012/04/06 - 7:51am.

Sounds like County Commission was willing to give them a PILOT for anywhere. And the Westbridge site is about half of what they said they would invest to build, and almost exactly matches their specs and already good to go.

vernon's picture

I agree, I ve been down that

Submitted by vernon on Fri, 2012/04/06 - 8:08am.

I agree, I ve been down that road and have never been able to get the county to extend the same incentive packages for an individual that they extend on property owned by the county in parks,I know for years Pat Wood got almost all of these deals , but I ve not seen an effort by the powers that be to provide incentives to a privately owned industrial deal.Maybe they looked at it and passed for some reason but I thought the Westbridge property would ve been a perfect fit and there's no way you can build that building cheaper today than you could buy it for.

rikki's picture

Its hard to get market

Submitted by rikki on Fri, 2012/04/06 - 8:49am.

Its hard to get market dollars for industrial land

Yep. Because the market for industrial/business land has been socialized through both direct government ownership (through government-sponsored entities like TDC) and through welfare entitlements lavished upon buyers by eager politicians. R. Larry was courting KaTom so vigorously he was practically humping the podium.

I guess Commissioners are not as concerned about free markets and private property rights when they've got public assets to squander as they are when they've got public interests to defend.

vernon's picture

You re right,only problem is

Submitted by vernon on Sat, 2012/04/07 - 8:31am.

You re right,only problem is if we don t participate, we get no one, all counties are aggressively making deals to land companies, I hate the way its done but you either get competitive and sell our county on its benefits in addition to incentives or we get left behind in recruiting employers.It also sucks for small private developers because we want to lease our inventory to some of the same customers that the county can push incentives for.I d like a program that extended an incentive package to existing inventory to the point that it was clear and marketable.Only problem is they don t want to extend those to a company that's already here.Unless that company is threatening to go to another county.

rikki's picture

There are many types of

Submitted by rikki on Sat, 2012/04/07 - 9:58am.

There are many types of incentives: good schools, a thriving downtown, clean creeks, mature trees, sports teams and facilities, walkability, rail lines, river access, culture, character, etc. Selling interstate access is a short-term, lowest-common-denominator strategy.

The Commission majority repeatedly demonstrates a lack of vision to work toward long-term strength. Unfortunately, many developers are addicted to the entitlements Commission eagerly hands out, and they buddy up with politicians and make them feel like they are doing something good when they are really selling the community short.

fischbobber's picture

Great Points

Submitted by fischbobber on Sat, 2012/04/07 - 10:36am.

I find myself wondering more and more as I look at some of these deals "If we have to pay taxes for a guy who can't make a profit unless he pays the lowest wage possible without providing any benefits, which, ultimately we the local taxpayers will have to pony up for, do we really want that person to locate his business here?"

Our local developer's arguments remind me of the high school girl who thought having sex with everyone was the sure path to popularity and respect.

Phillip Ray's picture

WestBridge/Forks of the River

Submitted by Phillip Ray (not verified) on Fri, 2012/04/06 - 8:16pm.

KaTom said they wanted a location close to I-40. Forks of the River and WestBridge are both several miles off. Actually, WestBridge is kind of a pain in the butt to get to, I hate the Hardin Valley exit off Pellissippi.

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