Johnson City preparing to seek state approval for retail tourism district
By Dave Ongie
Last week, the plans for a proposed development that would sit on about 100 acres of land inside a new retail tourism development district saw the light of day.
Spearheaded by a group including Mark Larkey, Joe Wilson, Bryan Sangid, Bucky Mabe and Clarance Mabe, the development would include a mix of retail and residential space on property located just off Exit 17 of Interstate 26 between Boones Creek Road and Bart Green Drive.
The willingness of the group to develop the property is a good illustration of the tremendous potential that now exists off Exit 17 of Interstate 26 in the wake of two major decisions in Nashville. First, TDOT agreed to fund a $10 million project to reconfigure the exit in a way that will allow for a major increase of vehicle traffic. Second, the state legislature passed the Regional Retail Tourism Development Act back in May, clearing the way for state sales tax dollars generated in the new zone to go to Johnson City, which can then use that money to incentivize projects intended to boost tourism and retail activity inside the district.
Last Friday morning, Johnson City city manager Pete Peterson said the property Larkey and his partners are looking to develop has been owned by several developers over the last 15 or 20 years, but nothing had been done with it, mostly because of the congestion off Exit 17.
“When people go shopping, one of the first things they demand is ease of access to where they want to go shop,” Peterson said. “The state’s investment in reconstructing that interchange is huge. That really opens up that whole corridor.”
When you add the enticement of state tax dollars, which will allow developers to be reimbursed for the expenses they incur while building inside the new district, Peterson sees a once-in-a-lifetime opportunity to change the landscape of commercial development in Johnson City and the region as a whole. As of Friday morning, Peterson said he had not yet seen a proposed development plan from the group looking to develop the property between Boones Creek Road and Bart Green Drive, but he said the city has been working hard to develop a vision for the new zone and will be very judicious when approving projects inside the district.
“A project that’s going to meet the criteria of this statute will create hundreds of jobs,” Peterson said. “I wouldn’t be surprised if by the time everything is built out, this may create as many as 800 to 1,000 jobs.”
Johnson City has already drafted a preliminary map of the properties eligible to be included in the new development district. In accordance with the bill, properties have to be within a half-mile of the Exit 17 interchange, and the district can’t exceed 950 acres.
The properties shaded in pink in the graphic accompanying this story are eligible to be included in the development district, but Peterson said landowners shaded in pink are in no way under any obligation to develop their land.
“This is nothing more than an overlay,” Peterson said. “It doesn’t mean that the property is going to be annexed. It doesn’t mean that it’s going to be rezoned. It doesn’t mean that it’s going to develop commercial or tourism. Those properties could be within the zone, stay exactly as they are and nothing would change if that’s what the property owner wants.”
Peterson is hopeful that the City Commission will approve the boundaries of the district within the next month or so. Once the city passes an ordinance to approve the boundaries, that ordinance will have to be sent to the state of Tennessee for approval along with a business master plan that meets the stipulations of the legislation passed in May.
“At that point in time, there is a 30-year clock that starts ticking, because the state incentives are only available for 30 years once that approval is granted,” Peterson said. “During that 30-year period, the entire zone could be developed as one project. It could be done by one developer, or it could be done in phases by multiple developers.”
Peterson said the city has been in close contact with the state in order to help ensure the ordinance and the master plan the city passes and sends to Nashville has the best chance to be approved.
“I’d like to get that preliminary approval from the state so that whatever we’re going to send them for the final approval, they know what’s coming and they’re comfortable with it,” he said.
Once final approval is granted, Peterson is hopeful the district can provide a huge economic boost for both Johnson City and Washington County through increased sales tax revenue and new job growth. He sees the district as a potential tool to recruit new businesses to the area and help attract and retain young talent to Washington County.
And armed with lessons learned in the past when retail businesses migrated from downtown Johnson City to North Roan Street, Peterson believes careful planning will allow the new district to augment existing retailers already in place and elevate the quality of life in Johnson City.
“That’s the desired end result, that this is a rising tide that lifts all ships,” Peterson said.