Springbrook Farm and Alcoa will soon generate tax revenues of more than a million | News
After a third amendment to a development agreement, a lawsuit, and several groundbreaking ceremonies, Alcoa is rounding the final bend before a long construction period that will complete major tax generators for the city.
Alcoa City officials have implemented a downtown development located on the former ALCOA Inc. West Plant site called Springbrook Farm.
In 2016, Alcoa signed an agreement with a company to prepare and market the 252 acres for developers to buy and build. In turn, the former industrial site would begin to generate more taxes for the city to absorb.
City manager Mark Johnson said land preparation will be complete once Alcoa receives a check for $2 million and about 30 acres in Springbrook.
Alcoa’s board of commissioners approved a third amendment to the development agreement on April 22 that aims to complete the planning.
Since 2016, Airport Center Development Partners, LLC. has been Alcoa’s partner in creating attractive properties for apartments, single family homes, restaurants and other recreational activities.
The agreement held each party – ACDP and the city of Alcoa – responsible for different parts of the preparation. Alcoa paved Tesla Boulevard, installed streetlights, provided access to utilities, and supported other development costs for which the ACDP would reimburse the city.
Outlined in the original agreement, Alcoa estimated to invest $8 million which ACDP would repay over time by selling properties to developers. However, ACDP has yet to reimburse the city for the $6.5 million spent by the city.
The first two amendments to the agreement, one in 2018 and the other in 2020, were to block reimbursement due to COVID-19 and environmental studies. In the most recent amendment, the ACDP transferred its financial responsibility to another company – TN Alcoa Primary, LLC.
In addition to the debt owed to the city, Alcoa Primary acquired ACDP’s remaining land assets within Springbrook Farm.
In December, another company interested in the Springbrook Farm development filed a lawsuit against ACDP and other LLCs over the planned deal change which came to fruition on April 22 at Chambers of commission from Alcoa.
Johnson said the lawsuit hasn’t delayed any action by the city, but the deal depends on Alcoa Primary’s ability to take it over.
Plaintiff NAI Knoxville, Inc. alleged that ACDP was reneging on its agreement with NAI for sales commissions on the Springbrook Farm land.
Under the two companies’ agreement, NAI would market the land while ACDP would make it developable, and then NAI would receive commissions once ACDP sold the property. When ACDP transferred its interests to Alcoa Primary, over 100 acres were non-commissionable to NAI.
ACDP informed NAI last fall that it would be terminating its commission agreement and transferring its assets to another company. The lawsuit was filed by NAI shortly thereafter.
The court ordered that before any transfer of interest could take place, ACDP and its partners must issue nearly $900,000 in commissions to NAI.
ACDP disputed this and claimed that, pursuant to the commission agreement, NAI was no longer entitled to commissions and had been paid whatever the company was owed.
About a month later, Alcoa’s board of directors unanimously approved the transfer of ACDP’s interests to Alcoa Primary, subject to legal approval.
Alcoa Primary is now responsible for reimbursing the City of Alcoa for $6.5 million.
As noted in the latest amendment, Alcoa Primary has agreed to send the city a check for $2 million by the end of the year and return the 29.8-acre property in the Springbrook development area. Farm.
According to the agreement, the estimated value of this land is 4.5 million dollars. However, Johnson said other Springbrook Farm land was selling for more in this current market than the prices used to estimate the value of the 29.8 acres.
Johnson said the city plans to keep most of the space clear for a future track and land for Alcoa City schools, greenway connections and parks. Although planned, the projects do not yet have a schedule or cost estimate.
A 10.2 acre lot on one side of Faraday Street behind the baseball and softball fields is planned for athletics, the 5 acre open space on the other side of Faraday is planned for a greenway to connect to Springbrook Park.
Another 1.6 acre greenway connection behind the Mills Street small house development and a nearby 2 acre park to be named Centennial Park in the middle of Springbrook is planned.
Land that will not be green space is dedicated to the creation of three additional routes for navigation in the downtown development, one perpendicular and two parallel to Tesla Boulevard.
Johnson said every green space project will be completed because the city has room in the budget or receives grants.
City officials hope that the sales tax generated by Springbrook Farm will increase budget margins for new projects.
Three apartment complexes, a townhouse community and the Mills Street homes will add 1,072 taxable properties to the city. By including the Vintage in active rental at Hunters Crossing, Johnson estimated the town would receive over $1 million in additional property taxes.
According to a statement from Vintage, the 192-unit apartment complex was 62% let on April 20. The apartments are still under construction and located on Middlesettlements Road, opposite Rural King, formerly Bungalow Elementary School.