ORDINANCE NO. BL2015-1306
An ordinance authorizing The Industrial Development Board of The Metropolitan Government of Nashville and Davidson County to negotiate and accept payments in lieu of ad valorem taxes with respect to American Standard Brand’s manufacturing facility.
WHEREAS, The Metropolitan Government of Nashville and Davidson County (the “Metropolitan Government”) is vitally interested in the economic welfare of its citizens and wishes to provide the necessary leadership to enhance this area’s capabilities for growth and development; and
WHEREAS, the provision of jobs to area citizens by local business is both necessary and vital to the economic well-being of the Metropolitan Government; and
WHEREAS, pursuant to the Industrial Development Corporations Act, currently codified at Tenn. Code Ann. §§ 7-53-101 through 316 (such act, as heretofore or hereafter amended, referred to as the “Act”), the General Assembly of the State of Tennessee (the “General Assembly”) has authorized the incorporation of public corporations known as “industrial development boards” in municipalities in the State of Tennessee (the “State”); and
WHEREAS, the Industrial Development Board of The Metropolitan Government of Nashville and Davidson County (the “Board”) has been duly organized and incorporated in compliance with the Act; and
WHEREAS, the General Assembly has found and declared that the Board is performing a public function on behalf of the Metropolitan Government and that the Board is a public instrumentality of the Metropolitan Government; and
WHEREAS, the Supreme Court of Tennessee (the “Supreme Court”) has found that the Board is an agency or instrumentality of the Metropolitan Government; and
WHEREAS, the Act expressly incorporates by reference the statement of public policy set forth in Section 3 of Chapter 209 of the Public Acts of 1955; and
WHEREAS, Chapter 209 of the Public Acts of 1955 states that the declared purpose of the Act is to do that which the State welfare demands and that which the State public policy requires to alleviate the problems of unemployment, to raise family income, to provide a means by which the citizens of the community may promote and develop industry in their area so as to obtain a balanced economic development highly essential to the welfare of the State, and to promote the development of commercial, industrial, agricultural, and manufacturing enterprises by the several municipalities so as to be given local benefits peculiar to each and general benefits to the entire State; and
WHEREAS, the General Assembly also has declared that the purposes of the Act include maintaining and increasing employment opportunities by promoting industry, trade, and commerce by inducing manufacturing, industrial, financial, service, and commercial enterprises to locate or remain in the State; and
WHEREAS, the Supreme Court has held that the purposes of the Act include the promotion of industry and the development of trade to provide against low wages and unemployment and that such purposes are public in nature; and
WHEREAS, the Board is empowered pursuant to the Act to acquire, whether by purchase, exchange, gift, lease or otherwise, and to improve, maintain, equip and furnish, “projects” (as defined in the Act), and to lease such projects to others; and
WHEREAS, AS America, Inc. (together with its corporate subsidiaries and affiliates, “American Standard”), is a national manufacturer of a wide range of high-quality kitchen and bath products; and
WHEREAS, American Standard is planning to work in conjunction with Ashley Interchange, LLC (together with its corporate subsidiaries and affiliates, “Ashley Interchange”) to renovate, improve and equip the manufacturing facility previously operated by Whirlpool located at 1714 Heil Quaker Drive, Lavergne, TN 37086 (the “Project”); and
WHEREAS, once the renovation and improvements are completed, American Standard will occupy and operate the Project as a facility for the manufacture of kitchen and bath products and as a call-center; and
WHEREAS, once the Project is fully operational, American Standard expects to employ approximately 600 full-time Project-based employees; and
WHEREAS, American Standard and Ashley Interchange anticipate making a significant investment of approximately $22,750,000 in connection with the Project; and
WHEREAS, American Standard and Ashley Interchange expect their expenditures within the boundaries of the Metropolitan Government in connection with the Project to provide significant employment and other commercial opportunities for area citizens; and
WHEREAS, pursuant to Tenn. Code Ann. § 7-53-305, all properties owned by the Board are exempt from ad valorem taxation in the State of Tennessee; and
WHEREAS, pursuant to Tenn. Code Ann. § 7-53-305(b), the Metropolitan County Council (the “Council”) has the power to delegate to the Board the authority to negotiate and accept from its lessees payments in lieu of ad valorem taxes, provided that such payments are in furtherance of the Board's public purposes; and
WHEREAS, the benefits to the Metropolitan Government of the location of the Project within the boundaries of the Metropolitan Government, and in the exercise of its powers above, will provide an opportunity for the Board to acquire, by purchase, exchange, gift or lease, property that will be used with respect to the Project, to lease that property to American Standard and/or Ashley Interchange, and to enter into one or more agreements with American Standard and/or Ashley Interchange to accept payments in lieu of ad valorem taxes with respect to the property; and
WHEREAS, the Board may only negotiate and accept payments in lieu of ad valorem taxes with authorization from the Council; and
WHEREAS, it is in the interest and welfare of the citizens of the Metropolitan Government to delegate authority to the Board to negotiate and execute a payment-in-lieu-of-tax agreement with American Standard and/or Ashley Interchange.
NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1: That the Council of the Metropolitan Government finds that the Board’s acceptance of payments in lieu of ad valorem taxes with respect to the Project is in furtherance of the Board’s public purpose of maintaining and increasing employment opportunities, as set forth in Tenn. Code Ann. § 7-53-102, and the other public purposes described above.
Section 2: That the Metropolitan Government hereby delegates to the Board the authority to negotiate and execute an agreement for payments in lieu of real and personal property taxes with respect to the Project for a period of up to five years, beginning no later than the 2016 tax year. The amount of the payments in lieu of real and personal property taxes that shall be required with respect to that five-year period shall be equal to the lesser of either (a) the Standard Tax or (b) the “2014 Property Tax Payments,” as defined below, plus fifty percent (50%) of the difference between the Standard Tax owed in connection with the Project and the 2014 Property Tax Payments. Notwithstanding the foregoing, if there are fewer than 480 Company Positions (as defined below) as of December 31 preceding a year, commencing December 31, 2017, the payment for the following year will be 100% of the Standard Tax.
Section 3: That the term “2014 Property Tax Payments” shall mean the total amount of personal and real property taxes paid in connection with the real and personal property located at 1714 Heil Quaker Drive, Lavergne, TN 37086 for the 2014 tax year, which were $114,258 for real property and $0 for personal property.
Section 4: That the term “Standard Tax” shall mean the amount of ad valorem real and personal property tax that American Standard and/or Ashley Interchange would be required to pay with respect to a given tax year with respect to the real and personal property that is then subject to the payment in lieu of tax arrangement authorized hereby if American Standard and/or Ashley Interchange owned such property. American Standard and/or Ashley Interchange shall be permitted to challenge the assessment of any real property that is then subject to the payment in lieu of tax arrangement authorized hereby in the same manner as if American Standard and/or Ashley Interchange owned such property.
Section 5: That the term “Company Position” shall mean each full-time Project-based employee position. A Project-based employee will be considered a “full-time” position if the position is filled by an individual who regularly works on average 40 hours or more hours per week for American Standard.
Section 6: (a) That the payment in lieu of tax arrangement authorized by this Ordinance shall apply to all real and personal property comprising a portion of, or used at or in connection with, the Project.
(b) That the payment in lieu of tax arrangement authorized by this Ordinance shall apply to all land, easements or other property rights, buildings, improvements, fixtures, construction in progress, equipment, furniture, and other properties of any nature comprising a portion of, or used in connection with, facilities located on the property described above. Such arrangement shall apply to such facilities and such properties in their current scope and configuration and to all replacements, enhancements, additions, expansions, and improvements to such properties and facilities.
Section 7: That the final version of the payment in lieu of tax agreement authorized by this Ordinance shall be in substantially the form attached hereto as Exhibit A and must be approved as to legality by the Department of Law of the Metropolitan Government prior to being executed by the Board. Without limiting the foregoing, the agreement shall contain DBE and workforce development provisions in substantially the form included in the form of agreement attached hereto as Exhibit A.
Section 8: That all ordinances or resolutions, or parts thereof, in conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby repealed.
Section 9: That this Ordinance shall take effect from and after its final passage, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.
Sponsored by: Bill Pridemore, Robert Duvall
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|Introduced:||July 21, 2015|
|Passed First Reading:||July 21, 2015|
|Referred to:||Budget & Finance Committee|
|Passed Second Reading:||August 4, 2015|
|Passed Third Reading:||August 18, 2015 - Roll Call Vote|
|Approved:||August 19, 2015|
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