TN Economic Development Finance Course Feb. 20-21, 2014 UT Center for Industrial Services & Council of Development Finance Agencies

1. NEWPORT/COCKE COUNTY
Tax Increment Finance
TCED
UT-CIS
February 21, 2014

2. NEWPORT/COCKE COUNTY MAP

3. CROWE PROPERTY
HIGHWAY 321, EXIT #435, I-40

4. TIF District Final Estimates
Crowe Property
Newport/Cocke County
Revenues:
Anticipated Appraisal Lowe’s
Anticipated Appraisal Retail Space
Anticipated Appraisal Out lot #1
Anticipated Appraisal Out lot #2
Anticipated Appraisal Out lot #3
Anticipated Appraisal Out lot #4
Anticipated Appraisal Out lot #5
$
$
$
$
$
$
$
Total estimated*
$14,000,000.
$15,300,000.
40 % Assessment
Mil Rate / 100
$ 5,600,000.
$
56,000.
$
$
$
Taxes:
City rate
$2.46
County rate $3.16
Total revenue
Less:
Current tax base
(assessed at $29,850; $735/$945)
County Debt Service Rate (7.5%)
Net available to service debt
Annual debt**
Debt coverage ratio
**Loan terms
Year 1
8,000,000.
5,000,000.
200,000.
200,000.
200,000.
200,000.
200,000.
Year 4
8,000,000.
5,000,000.
1,500,000.
1,500,000.
1,500,000.
200,000.
200,000.
Year 5-10
$ 8,000,000.
$ 5,000,000.
$ 1,500,000.
$ 1,500,000.
$ 1,500,000.
$ 1,500,000.
$ 200,000.
$16,600,000.
$17,900,000.
$19,200,000.
$ 6,120,000.
$
61,200.
$ 6,640,000.
$
66,400.
$ 7,160,000.
$
71,600.
$ 7,680,000.
$
76,800.
137,760.
176,960.
314,720.
$
$
$
150,552.
193,392.
343,944.
$ 163,344.
$ 209,824.
$ 373,168.
$ 176,136.
$ 226,256.
$ 402,392.
$ 188,928.
$ 242,688.
$ 431,616.
$
1,680.
$
1,680.
$
1,680.
$
1,680.
$
1,680.
$
$
23,604.
289,436.
$
$
25,796.
316,468.
$
$
27,988.
343,500.
$
$
30,180.
370,532.
$
$
32,372.
397,564.
$
77,400.
$
267,395.
$
267,395.
$
267,395.
$
267,395.
3.74
$
$
$
$
$
$
$
Year 2
8,000,000.
5,000,000.
1,500,000.
200,000.
200,000.
200,000.
200,000.
March 15, 2005
1.18
$
$
$
$
$
$
$
Year 3
8,000,000.
5,000,000.
1,500,000.
1,500,000.
200,000.
200,000.
200,000.
1.28
$
$
$
$
$
$
$
1.39
1.49
Principle - $2,000,000. Interest rate - 3.87% Term - 10 years (int. only yr #1; amortize yrs. 2-10)
$2,000,000. @ 3.87% = $77,400. Yr 1;
P&I yrs 2-10 = $267,395.
No points, closing costs, negative carry; interest accrues from time of disbursement; upon Lowe’s delivery of
Certificate of Occupancy for property.
* Assumes one out lot will be sold/developed per year for years 1-4. Assumes only 4 of 5 will be sold.

5. Debt Estimates
Annual debt**
Debt coverage ratio
**Loan terms
$
77,400.
3.74
$
267,395.
1.18
$
267,395.
$
1.28
267,395.
1.39
$
267,395.
1.49
Principle - $2,000,000.
Interest rate - 3.87%
Term - 10 years (int. only yr #1; amortize yrs. 2-10)
$2,000,000. @ 3.87% = $77,400. Yr 1;
P&I yrs 2-10 = $267,395.
No points, closing costs, negative carry; interest accrues from time of disbursement; upon Lowe’s delivery of Certificate of Occupancy for
property.
* Assumes one out lot will be sold/developed per year for years 1-4. Assumes only 4 of 5 will be sold.

6. New Estimates of Revenue
Fast Forward to today and update changes to 3/15/2005 Estimates --After the Reappraisal of City/County for 2005 & new tax rates are known:
Year 1
$12,000,000
5,000,000
600,000
600,000
600,000
600,000
600,000
$20,000,000
Year 2
12,000,000
5,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
27,000,000
$361,600
Lowe’s
Add. Retail
Outlot 1
Outlot 2
Outlot 3
Outlot 4
Outlot 5
$488,160
$2.48 new county rate
$2.04 new city rate
$4.52
Gross Taxes
Less:
Current tax base
(assessed at $29,850; $735/$945)
County Debt Service Rate (7.5%)
Net available to service debt
P & I payment
Debt coverage ratio
$
361,600.
$
488,160.
$
488,160.
$
488,160.
$
488,160.
$
1,680.
$
1,680.
$
1,680.
$
1,680.
$
1,680.
$
27,120.
332,800.
$
36,612.
449,868.
$
36,612.
449,868.
$
36,612.
449,868.
$
36,612.
449,868.
$
267,395.
$
267,395.
$
267,395.
$
267,395.
$
267,395.
1.24
1.68
1.68
Amortization Note – IF - : $2M (PV), $400,000 (PMT), 3.87% (I/Y) = 5.66 (N) years to fully amortize
1.68
1.68

7. LOWE’S PRESS RELEASE
Aug 19, 2005
LOWE’S STORE SLATED FOR NEWPORT- The Do-it-Yourself retailer
invests $12 million to build one-stop shop for appliances,
furnishings, building materials and lawn/garden products
Mooresville, N.C. – A new Lowe’s will soon be underway at U.S.
Highway 321 and Epley Road. The new Lowe’s store is expected
to open in early 2006. The do-it-yourself retailer is known for
helping homeowners find the right equipment and supplies to
build, improve, beautify and enjoy their homes.
Source:
http://www.lowes.com/lowes/lkn?action=frameSet&url=lowes.med
iaroom.com/

8. NEW OUTDOOR
ADVERTISING CAMPAIGN

9. THANK YOU
Donald Hurst, CEcD
Cocke County Partnership
433 Prospect Avenue
Newport, TN 37821
423.623.3008
dhurst@cockecountypartnership.com