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Downtown Centre sale approved by committee, full commission

Paving the way for the full Washington County Commission to cast its vote, the County Owned Property Committee met in a called meeting on April 21 to approve a final contract to sell the Downtown Centre to the Johnson City Development Authority.
According to the terms of the contract, the JCDA will purchase the building for $1 million, due in full at the time of closing. The sale is the next step in getting Northeast State Community College to locate a teaching site at the facility.
“Even though we are selling it for $1 million, that is a discounted value that the county is contributing to this community college project,” said County Attorney John Rambo, who put the value of the building at $2 million or more. “We are considering that the county’s contribution to getting the community college started in Johnson City.”
The contract includes a transition period for the county to move its Clerk and Trustee’s offices currently located in the building. However, County Attorney John Rambo said it is doubtful the county will even need the additional time now that it has secured a location in North Johnson City to relocate the offices, likely by July.
Additionally, the contract is written so the sale of the Downtown Centre is not binding on the JCDA. In other words, if Northeast State is unable to get the state to lease the building from the JCDA to create the teaching site, the sale of the building will be null and void.
“They have 120 days from the day of the agreement to secure a lease from the state of Tennessee,” Rambo explained. “If not, our agreement expires or more time can be worked out.”
The lease agreement is scheduled to be considered for approval on May 21, according to County Mayor Dan Eldridge.
Meanwhile, the JCDA is expected to consider the final sale agreement at its meeting early next month. Commissioner David Tomita, who also serves on the JCDA board, said he expected the agreement to be approved, but warned that the deal is nowhere near complete.
“There are no funds in the bank,” Tomita said. “We have to secure the financing.”
The JCDA plans to apply for a loan to purchase the building as well as financing another $1 million to make necessary renovations to the facility before it can be leased to Northeast State.
According to Tomita, the JCDA is looking to secure a loan to be paid back over seven to 10 years. The organization hopes to garner the financing based on its incoming tax increment financing, or TIF, funds.
The county, as well as Johnson City, takes part in the TIF program. Currently the county contributes approximately $180,000 annually to the TIF program.
The county is not able to halt its participation in the program until all outstanding debt is retired, which includes the repayment of the loan issued to purchase the Downtown Centre.
At Monday morning’s meeting of the full commission, members unanimously voted to approve the contract for selling the Downtown Centre.