9:15 a.m. UPDATE: The Washington County Budget Committee amended resolution 16-07-08 (RESOLUTION APPROPRIATING $1,200,000.00 FROM THE CAPITAL PROJECTS FUND BALANCE TO THE INDUSTRIAL DEVELOPMENT BOARD AND DELEGATING AUTHORITY TO THE INDUSTRIAL DEVELOPMENT BOARD TO NEGOTIATE AND ACCEPT PAYMENTS IN LIEU OF TAXES RE: ECONOMIC DEVELOPMENT OPPORTUNITY) from $1.2 million to $600,000 in hopes that Johnson City will contribute the other half after their city commission meeting on Monday night.
By COLLIN BROOKS
Mullican Flooring has indicated to the Washington County Economic Development Council that they will wait until August before they make their decision as to where they will place their new warehouse.
Early indications were that the company would make their decision by the end of June, but legal language held up a resolution for financial support from Washington County from making it out of the county’s budget committee — on three separate occasions — and into the full commission. Now though, the Budget Committee is expected to see the resolution during their Wednesday, July 13, meeting.
WCDEC Business Development Director Alicia Summers said that business has let the council know that it will hold off on their decision until the county has had time.
“They have agreed to hold off on their decision until the end of the month, after the county commission meets,” Summers said.
But, Summers did say that Mullican — who has been headquartered in Johnson City since 2000 — did decide on which rental agreement they would be interested in if they were able to keep occupy the 126,000 square foot building at 129 Roweland Drive.
Mullican indicated they would prefer the $0.75 per square foot proposal, which has an annual incremental increase of $12,000. That was in lieu of the $0.96 per square foot agreement, which had a lower annual increase of $6,000. If Mullican does not exercise its option to buy the building in the sixth year — completing its 15-year term — they may buy the property for $1.00. Each would give the county a nine percent return on investment at the end of the term.
That has many commissioners and Washington County Mayor Dan Eldridge eager to get the deal done. But Eldridge said that he wanted to make sure that the county handled the deal correctly, mentioning that they only have one chance to get it right.
“If you used borrowed money, than it would run afoul of the constitution prohibition on lending of credit of the county,” Eldridge said. “However, if we use cash, as we have in times past then we are fine. But you still have a lot of structural things to work through in regards to how you actually design the agreement, which will accomplish what the county wants to accomplish — in regard to providing the incentive and getting the jobs created and the investment made — but as the same time assures accountability from the company and does not run afoul of the IRS regulations.”
Washington County is competing against Wise, Virginia, and Bowling Green, Kentucky, for the Mullican Flooring warehouse to store finished products. Having the warehouse in the same town as one of their main production facilities will allow them to ramp up the volume of their production in Washington County.
In all, Mullican would add 200 jobs over a five-year period with those jobs providing an average salary of $40,600 and an estimated $8 million in wages over those five years.