JOHN COFFELTContributor

According to a timeline shared during the Aug. 29 Coffee County Budget And Finance Committee meeting, the full legislative body will see as early as November a proposal for a tax increment financing (TIF) plan for a roughly 1,000 unit mixed-zone development in Tullahoma.

Tullahoma Area Economic Development Corporation Executive (TAEDC) Director Winston Brooks said the planned development will provide the Tullahoma area with much needed residential and commercial units while also providing a significant increase in sale and property tax revenue.

“This is a really good deal that I think is going to help the county,” Brooks said.

Municipalities and county governments can use TIFs to foster economic development and enhance the tax base, Brooks said. TIFs help fund the public use areas of a project by using a portion of the developer’s property tax revenue to repay the bonds borrowed to finance the project.

As described during the meeting, the base taxes (what the property is assessed for now) will still be collected. As the property is developed and reassessed at higher values, those increment monies will then transferred to TAEDC and will go to the bonds.

Brooks said the Tullahoma Board of Mayor and Aldermen is set to hear the proposal Sept. 24. The matter will return to Budget and Finance and then go to the Coffee County Commission. Both Tullahoma BOMA and the Coffee County Commission will need to approve the TIF proposal.

“This property is approximately 200 acres of farmland, so your base tax is around $5,000 per year,” Brooks said. “That tax will not change.”

Under the planned TIF, the developer is only asking to use 60% of the increment for the development and the county will add 40% of the increased assessments to its coffers.

Brooks said the liability on the bond will fall on the developer, so if the project fails the county is not responsible. Nor will the development require many services from the county. Public works, police coverage and water and sewer will be provided by Tullahoma. Tullahoma City Schools will serve the development.

Brooks told the commission that over the 20 years the TIF is in place, estimated new taxes will be at total of $28.6 million. The dedicated debt service tax portion will be about $629,000. The base taxes are $112,000, and the TIF revenue will be $16.7 million for infrastructure. Once project is complete the county can expect about $11.19 million for new services. Annually, the county can expect $1 million a year in tax revenue.

As they are sold, those units’ value will be assessed by the county for tax revenue.

Budget and Finance Chairman Lynn Sebourn said if approved, the TAEDC will handle the details of the contract.

“This commission will be agreeing that they can proceed with the tax benefits,” Sebourn said. “The TAEDC board will manage the TIF throughout the process for the next 20 years.”

Since the item was only a briefing on the subject, no action was taken by the Budget and Finance Committee.

Coffee County Mayor Dennis Hunt asked Brooks if he could comment on if the county decided to not participate, and Brooks responded that if Coffee County failed to approve the TIF plan, it would likely jeopardize the project.

“If Coffee County did not participate, the project would probably end because there probably could not be enough increment to complete it, or it would be on a smaller scale or they might keep 80%.”

Planning at a glance

The development proposed by developer Chris Rudd for Beacon Acquisitions is to be located on 175-182 acres north of Tullahoma. The plans call for 350 single family one and two story homes on 50-foot lots, 326 townhomes on 20-foot lots, and 320 multifamily homes in addition to three acres of retail space. The total density is roughly 7,959 square feet per unit.  There will be three acres available for commercial developments.

According to Interim Tullahoma Planning Director Charles Rush, access to the site will be on North Jackson Street, just north of Regal Cinemas.

“Ingress and egress is going to be on Jackson Street,” he said. “It’s got about 1,200 feet on Jackson.”  

Brooks called the development a nice community with clubhouses, pools and walking trails.

“People are going to want to live in it,” he said.  “Total construction costs are $232 million. It’s probably the largest project in Coffee County to ever come through.”

The acreage is currently zoned agricultural, with the land use map planning for R-1 low-density residential. The developer will request the property be rezoned to Planned Mixed Use with the specifications defined in the application. Land will be donated to the City of Tullahoma for a new fire station to be located near the site.