East Ridge officials voted unanimously Thursday to give the first $4 million of a potential $11 million-dollar incentive package to the developer of a new Bass Pro Shops and Jordan Crossing development along Interstate 75 at Exit 1.
Applause from city council members and some audience members greeted the industrial development board after one-by-one, they verbally signed off on the assistance plan guaranteeing the first $4 million for the project.
The money will come from the city of East Ridge. But under the state's 3-year-old Border Region Retail Tourism Development District law -- intended to keep major developments inside Tennessee lines -- East Ridge can keep 75 percent of the state's portion of sales tax collections generated by the Bass Pro Shops development to repay its investment in the new retail center.
The industrial development board will handle disbursement of the city assistance to the developers, Exit One LLC, as the project progresses.
Mark Mamantov, public finance lawyer with Bass, Berry and Sims PLC, worked on the city's behalf in incentive negotiations with Exit One. During Thursday's meeting, he said there had been some disagreement with the developers.
"There's been a lot of give-and-take," he said. "As you might expect, a few issues came up afterward."
The biggest disagreement revolved around any property tax breaks the project may also receive from local governments.
Under state law, Bass Pro Shops has the right to approach Hamilton County, instead of East Ridge, if the company seeks tax abatement incentives.
Mamantov said the city's best interest lay in a commitment from the development that it would only enter into a tax abatement agreement with East Ridge, if it desires such tax breaks.
John Healy, a commercial real estate broker who spoke on Exit One's behalf Thursday, said the developers didn't feel to be "in good faith for us to commit Bass Pro to something."
The compromise is that if Bass Pro Shops does desire a property tax break, the developers are obligated to go first to East Ridge with a proposal.
If the city turns down the proposal, Bass Pro can then approach the county. If county officials also turn down the offer, Bass Pro Shops is free to come up with another proposal, but it is again obligated to go before East Ridge officials first.
The city also agreed to absorb the cost of relocating of a fire hall -- a roughly $1 million project. The fire hall relocation is addition to the $4 million voted on Thursday. Combined with potential tax breaks for Bass Pro Shops, the total incentive package would swell to $11 million over time, officials said.
Contact staff writer Alex Green at email@example.com or 423-757-6480.