CLARKSVILLE, TN (CLARKSVILLE NOW) – Two major local projects cleared hurdles this week at the Clarksville-Montgomery County Industrial Development Board: the Office Park/conference center and the Marcelina development.
The IDB also approved moving forward on a deal to relocate to a new home on Franklin Street, and board members reacted to some complaints about the IDB that emerged at recent City Council meetings.
Office Park, convention center
In 2019, the IDB purchased a 69-acre site along Interstate 24 just northwest of Tennova Healthcare-Clarksville, in order to build a convention center with an adjoining hotel.
The plan has since evolved to include a pitch for the site to become home to a planned much-larger Clarksville VA Clinic. An announcement on the VA site selection is expected in late spring or early summer, Economic Development Council CEO Buck Dellinger said. The presence of the VA Clinic will greatly increase the value of the land for retail use, helping to pay for the convention center through tax increment financing (TIF).
“The agreement assumes limited resources from the city and county governments and is dependent on development on contiguous parcels to provide tax increment financing,” according to an executive summary of the plan from the Economic Development Council.
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On Wednesday, the IDB approved the 57-page Office Park Master Development Agreement with E2L Real Estate Solutions. Doing so clears the way for them to begin marketing parcels of the property to retailers and other developers.
“The sooner we can get this agreement done, the sooner the master developer can start talking to some specific companies” to buy retail parcels, Dellinger said ahead of Wednesday’s vote.
Marcelina development
Announced in March 2022, Marcelina is a 307-acre, 1,378-unit, mixed-use development planned on Rossview Road just southwest of the new Kirkwood school campus. The project has been presented as a fully walkable, live-work-play community with housing, retail, education, entertainment and extensive greenspace.
To help make it happen, the developer and the IDB have worked out a tax-increment financing agreement. Under a TIF, the developer of a project that will improve the community gets a subsidy to help pay for construction that is borrowed against the future increased tax revenues that the development will generate.
In this case, the TIF agreement for Marcelina, an “entire mini-city,” is worth $60 million – much larger than any other local TIF districts and the largest TIF project in state history, Dellinger said. That reflects the geographic size of the project, its expected $4 billion economic impact, and its much longer 30- to 40-year timeline.
The developers will get the TIF incentive as a tax rebate. “The developer doesn’t get the money until after they’ve developed,” Dellinger said. “The risk on a TIF engagement are really low in the county, because if they don’t build it, they don’t get their tax returned.”
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County Mayor Wes Golden endorsed the project. “I think we have a good deal here. This will benefit the county significantly, especially out in that area,” Golden said.
“We are grateful for the partnership and collaboration with Montgomery County government and the EDC,” Clint Brewer, spokesperson for the developer, Rossview Farms, said in a statement to Clarksville Now. “Marcelina is a unique development that will enhance Montgomery County’s economy through job creation and expand our county government’s tax base. Marcelina is receiving national interest, and we are looking forward to making several important announcements in the first half of 2025.”
The board approved a detailed Public Projects Development Agreement, a component of the TIF agreement.
New home on Franklin Street
As the EDC, Visitor’s Center and other agencies look to move into a new home at 335 Franklin St., Montgomery County Government has stepped in to modify the plan.
Because the IDB and the Convention and Visitors Bureau (Visit Clarksville) are county government departments, the county has stipulated that it should be the owner of the building, rather than the IDB. To make that happen, the IDB will make the purchase, then receive lease payments from the EDC. Once the IDB is made whole, the property will be quit-claimed to Montgomery County Government.
This way, the county will be responsible for long-term maintenance and upkeep of the building and property, rather than the IDB. This created a four-way intergovernmental agreement among EDC, IDB, Visit Clarksville and the county. The County Commission approved the agreement Monday night, and the IDB approved it on Wednesday.
IDB member Jim Durrett pointed out that plans for the building renovation had been created by Providence Builders without securing a competitive bid. Now that county government dollars are involved, he said that likely triggers a requirement for a competitive bid for construction.
Board attorney Matt Ellis said the original deals for the project were handled through the nonprofit Aspire Foundation, but now that county government is involved, he would look into whether they have triggered the need for a bid process going forward.
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IDB member Daniel Binkley asked if this meant that the agencies might someday have to pay rent to the county.
Golden said that while he couldn’t bind future administrations to any decisions, the intent is that they would be treated like any other county department. However, rent may be required of the Chamber of Commerce and Leadership Clarksville, which are private organizations.
IDB responds to new council restriction
After the IDB was criticized at a City Council meeting recently over the city not being aware of a PILOT agreement, IDB members offered some perspective and response.
The issue began when information fell through the cracks about a PILOT approved to help create the Miller Town Apartments affordable housing complex, and the city neglected to adjust their tax revenue expectations.
During a Dec. 5 meeting, the council voted to require additional City Council approval for all PILOTs, a step that had been relegated to the IDB years ago.
At that meeting, council member Karen Reynolds objected. “We already have a seat at the table – the mayor is an ex-officio member of the IDB Board,” she pointed out. Mayor Joe Pitts was at the IDB meeting in 2018 when the Miller Town PILOT was approved. Reynolds argued that adding council approval will slow down and complicate the process for approving PILOTs, particularly for much-needed affordable housing.
More such PILOTs for affordable housing are likely coming. At Wednesday’s meeting, Dellinger said because Montgomery County ranks high on the list of counties needing affordable housing, developers are circling for opportunities.
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Durrett said that a primary reason that industrial development boards were created was to remove politics from recruitment incentive deals. He said the county became involved when, in 2006, the IDB approved a PILOT for the University Landing apartment complex, and county government leaders, out of anger over losing on-street parking spaces, put a restriction on residential PILOT agreements.
“If we had somebody like Trane coming in here, and it has to go to the City Council or it has to go to the County Commission, that can become a big hurdle. So I think we as a board should maybe address it with the city, if we can, and see if they would have a change of heart. Because this could have a major impact on the economic growth of our community.”
Pitts was absent from Wednesday’s IDB meeting, and no representative of the city attended in his place.
IDB Chairman John Rudolph said, “The city has a seat at this table as an ex-officio member of this board. … It’s by choice that they’ve been absent from these meetings and this process. I don’t know what the right steps are to try to get them reengaged and bring them back into the fold, but it’s certainly unfortunate that they’re not here.”
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