Alcoa is dedicating a nearly $10 million bond to two large projects as it kicks off a 2021 full of weighty decisions that may see the city take major strides in commercial growth.
Alcoa commissioners on Tuesday unanimously approved issuing the bond, which will cover a $6 million loan to the Blount County Industrial Development Board (IDB) and a $3.3 million payment for the wastewater treatment plant, operated by the city of Maryville.
The $3.3 million would improve the plant, where Alcoa is a financial partner since it serves both cities’ residents.
The $6 million is an expenditure based on developer Hillwood Properties’ interest in building a warehouse near the intersection of Pellissippi Parkway and U.S. Highway 129.
Records and emails obtained by The Daily Times show this warehouse will be occupied by e-commerce giant Amazon, though the company has not officially announced its intentions.
During a December meeting, the IDB met with local leaders (including Alcoa City Manager Mark Johnson) to discuss and sign a variety of agreements framing its relationship with Hillwood and the warehouse’s occupant.
Two of those agreements asked Alcoa and Blount County for $6 million for a total $12 million in loans the IDB intends to pay off over five to six years, according to initial projections.
Alcoa will not reap property taxes from the development, according to the agreements. That’s because, instead of paying property taxes, Tennessee law allows some large companies to lease property, buildings and equipment from an “owner.” In the case of Hillwood’s project, the IDB is that owner and companies will pay them millions each year in property tax equivalence.
The IDB then will turn around and give that money to Alcoa, using a payment-in-lieu-of-taxes instrument.
That’s how the city will pay off its newest batch of debt.
Though Alcoa commissioners approved the bond issuance, the IDB agreement they also unanimously approved during the meeting shows a schedule for withdrawals.
Beginning on Jan. 31, the IDB will draw $1.5 million from Alcoa. Between that time and Jan 1, 2022, it will withdraw $1 million four separate times. Finally, on March 1, 2022, it will pull $500,000.
The warehouse is supposed to be complete soon after that and ultimately operational by Dec. 31, 2023.
Alcoa is the first loaning entity to sign an agreement funding the IDB’s industrial endeavors. The Blount County Commission already has voted on the agreement to partner with the IDB, but it will vote Thursday, Jan. 21, on loaning the board $6 million.
In other business Tuesday, Alcoa commissioners:
• Approved annexation, a plan of services and rezoning for properties off 2069 and 2034 Topside Road.
• Approved amendments to code regarding building height and yard front setbacks.
• Reappointed Tim Seay to the Smoky Mountain Tourism Development Authority board for a six-year term.
• Reappointed Clarence Williams to the Alcoa Regional Planning Commission for a three-year term.
• Appointed Jim Walker to the Alcoa Development and Housing Authority for a five-year term.