Phillips: Time is of the essence as NETWORKS, NETNHub pursue agreement

Erin Downs, chairperson of NETWORKS Sullivan Partnership’s Regionalism Committee, briefs the Executive Committee during a meeting on Wednesday morning. Photo by Dave Ongie

By Dave Ongie, Managing Editor

According to the CEO of the Northeast Tennessee Regional Hub, the clock is ticking as efforts continue to bring existing economic development entities in our region under the umbrella of the Hub.

Speaking during a meeting of the NETWORKS Sullivan Partnership Executive Committee on Wednesday morning, NETNHub CEO Dennis Phillips said progress on an agreement between NETWORKS Sullivan Partnership and the Hub – a public/private entity designed to unify economic development efforts in Northeast Tennessee and serve as a unified voice in Nashville – will need to be made by March.

“By March, this will either be dead or we’ll be on the road to working together,” Phillips said. “We already have one major corporation that is only funding us through March. In my opinion, if we’re not working together and making some progress, it’s over.”

Phillips’ comments came following an update from Erin Downs, chairperson of NETWORKS’ regionalism committee. During a full board meeting on July 13 of last year, the regionalism committee was charged to work with council to act on behalf of NETWORKS and work with Phillips and the Hub’s legal council “to determine functional operations, governance structure, fiscal responsibility and objectives to propel the region forward.”

The committee met on July 28 and decided it was appropriate for NETWORKS to enter some type of agreement, perhaps a joint venture, with one or more organizations or entities for the purpose of economic development. However, according to Downs, “The agreement would specify that no control would be ceded and no function or activity would be delegated to any other organization.”

Downs went on to say Bill Argabrite, NETWORKS’ attorney, then sent a letter to the Hub’s legal council on Aug. 1 seeking to work toward forging such an agreement with the Hub. Lawyers representing the Hub responded with a proposal dated Nov. 2 that NETWORKS’ regionalism committee deemed unsatisfactory because the agreement went beyond the scope of what NETWORKS was willing and legally able to do under its bylaws.

“This memo is termed as a joint venture, but it actually involves ceding control because the staff would no longer be the staff of NETWORKS, it would be the staff of the Hub,” Downs said. “The funding that is coming into Networks would no longer come into Networks for operations, so we wouldn’t have any money to perform our function. 

“It also commits the cities and the county to fund the Hub, which of course NETWORKS can’t do.”

Argabrite concurred that NETWORKS, according to its own bylaws, is prohibited from committing future county or city funds to the Hub.

“We cannot amend the intergovernmental agreement,” Argabrite said. “This is the charter of NETWORKS. It can only be amended by the cities and the county, and it has to be unanimous among the cities and the county.”

Phillips said he understood the individual cities and the Sullivan County Commission would have to agree unanimously to change the bylaws in order for NETWORKS to fold into the Hub, and he said he plans to take the issue to the appropriate governing bodies for a vote. When talk turned toward forging a path forward that would allow NETWORKS to enter into a cooperative agreement with the Hub without ceding control of its operations, Phillips said he’d be happy to take any proposed agreement to the Hub’s Board of Directors.

“The (Hub’s Board of Directors) has asked that NETWORKS be folded into the Hub,” Phillips said. “If there are other ways, I’d be glad to present anything you’d like to the board.”

Sullivan County Mayor Richard Venable reminded the board that it had control of the funds it is allocated each year from the governing bodies of the cities and counties it represents and could certainly commit those funds toward a cooperative agreement with another entity.

“It’s important that you think about the control this board has and what this board can do on its own based on the best interests of the counties and cities we represent,” Venable said. 

Given the fact that NETWORKS passed a motion to fully support the intended scope and mission of the Hub last July, no further motions were made on Wednesday. Board Chair Bill Sumner encouraged Argabrite and the regionalism committee to continue trying to hammer out a workable arrangement with the Hub’s lawyers, and he reiterated the board’s support for regional cooperation.

“I think it can be a really strong organization,” Sumner said. “It’s just not the organization (the Hub) proposed.”

Meanwhile, Washington County’s economic development entity continues moving full-steam ahead in its mission to fold into the Hub. NeTREP CEO Mitch Miller said on Wednesday that the group has a four-person team handling the transition, and both Johnson City and Washington County are being positioned to have strong local representation.

Phillips said during Wednesday morning’s meeting that NeTREP was holding off on committing funding to the Hub until it saw NETWORKS make progress toward joining.

“They are holding funding to see what you all do,” Phillips said. “One county is not willing to do something the other is not willing to do. We have two major counties here. Without you two working together and the cities within, this is not going to happen.”

Miller, however, said NeTREP’s agreement with the Hub was in no way contingent on progress being made between the Hub and NETWORKS. He said he fully expects NeTREP to make its financial commitment to the Hub during a meeting on Jan. 26.

“We just want to make sure the private sector commitments are there before we commit money and staff,” Miller said, adding that he is unaware of plans by any of the private sector entities – Ballad Health, Bank of Tennessee, Bristol Motor Speedway, ETSU and Eastman – represented on the Hub’s Executive Board to pull funding in March.

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