The PILOT program in Wilson County was started by county resolution in 2006 with the goal of increasing economic investments and development and high quality jobs leading to a better quality of life for the community.
Joint Economic and Community Development Board
The Joint Economic and Community Development Board (JECDB) was started in 1989 with the goal of encouraging economic development in Wilson County and it’s three cities – Lebanon, Mt Juliet, and Watertown. The Board works to attract companies and businesses to open operations in the county, providing quality jobs and investments in the community.
One of the tools the JECDB uses to attract companies to the area is agreements for payments in lieu of taxes (PILOT). A PILOT agreement allows a business making a significant investment in the county to pay the costs of development or additional jobs in lieu of property taxes for a set period of time.
The PILOT Process
I spoke to GC Hixson, the Executive Director of the JECDB about the process that occurs before a PILOT agreement is reached.
Our office typically uses an outside economic consulting company (Younger Associates of Jackson, TN) to analysis projects.
The attached report (Project Santa -Thermo Fischer Scientific ) located in the Speedway Industrial Park was approved by the Budget Committee and accepted by the Wilson County Industrial Board in 2021. It has been our largest PILOT approval in terms of jobs and investments.
Project payback or the “Benefit/Cost Ratio is a critical consideration. The b/c ratio is the sum of all tax revenues from construction and operations during the PILOT period divided by total taxes forgone.”
In this project it was estimated that for each $1.00 abated there would be $2.95 in economic benefits returned during the agreement. It received a 7-year agreement for the projected wages/benefits and its estimated 1400 jobs. The state of Tennessee provided a $10.2M direct grant.
As you may be aware, our PILOT agreements are limited to a maximum of seven years. State regulations allow them to be up to 20 years in length.
We take all PILOT proposals to the Budget Committee for approval. This is not required by state law but was designed into the program for involvement and oversight. By law, the ID Board could consider PILOT’s and approve them without local government consideration and approvals. This is typically the process in other communities across the state.
We believe that projects like Thermo Fisher brings quality jobs to the county while increasing the tax base as soon as we can get them back online as full taxpayers.
It is my belief that without the program we would not have been successful in many of the located projects. We do not offer PILOTs to any and all projects considering our community. We weigh the economic analysis, the typed of jobs and overall effects of a project before considering providing a proposal. (we did not do one for the electric battery charging company – Tritium because they did not have a large enough investment to justify the associated costs of the program)
To date: our average PILOT has been 5 years with 12 projects being in manufacturers and 15 being in logistics/transportation/service industries. We monitor the number of employees and survey their wages of those who have received PILOTs.
Amazon ($31,330,700 facility at completion) , Starbucks ($22,817,700), Hollister was $10,196,200, Novamet was $5,996,100, and PFP was $7,106,900. (, Novamet, and PFP have already been added to the tax rolls. That’s real property tax of $780,331.04 at the old assessed values prior to reappraisal. It’s probably more than that now.
Maplehurst Bakeries ($10,106,000) and Fed Ex ($17,032,000) both go on the tax rolls in fiscal year 6/30/23. Those two projects will add $273,432.64 to the tax rolls when they are added (again, at the old assessed values, prior to reappraisal).
Under Armour ($42,730,300) goes on the tax roll in fiscal year 6/30/24. It will add $430,533.41 to the tax rolls when it is added at the old assessed value.
Important to note that not all of this money goes into the general fund. It is divided up amongst the various funds that receive property tax.
Also important to note – in the case of Amazon, we invested $315,675.60 a year for seven years (total 2,209,729.20) and got a $31,330,700 building built which will be taxed for the next 40+ years. In essence the county invested $2.2 million for a minimum of a $12.6 million return. Every one of these projects could be analyzed in the same fashion and would produce similar results.