BRISTOL, Va. – A year after the Virginia General Assembly enacted legislation to help the city develop a significant commercial center, city leaders now want immediate access to any tax revenues it generates.
City leaders have championed the 2012 legislation as the way to repay the millions of dollars it has borrowed and plans to borrow to establish The Falls, the 140-acre, 1.4 million square foot commercial center planned near Interstate 81’s Exit 5.
Last year’s bill allows the city to capture sales tax revenues from a “development of regional impact” if the project meets minimum thresholds including a capital investment of at least $50 million, the reasonable expectation it would attract 1 million annual visitors, generate $5 million in annual state sales tax revenues and create at least 2,000 permanent jobs.
That legislation specifies “no remittances shall be made until construction is completed” but Senate Bill 861 - which was offered last week by state Sen. Bill Carrico, R-Fries, - would make tax revenues available to the city when each business begins operating.
The amendment reads “For public facilities described in subsection B [Bristol, Va.], the sales tax revenue generated in what will become any part of the completed public facility shall be remitted by the [state] Comptroller upon certification by the governing body of the municipality that a business license has been issued to an occupant of the public facility, even though construction of the entire public facility has not been completed.”
Delegate Israel O’Quinn, R-Bristol, introduced matching legislation in the House.
City Manager Dewey Cashwell called the changes “just housekeeping.”
“Those thresholds are still in place,” Cashwell said. “This way there would be no functional delay. We want to make sure a building is built and stocked, but this would give us access as soon as they turn the lights on and begin using the cash registers. We think the timing will be improved significantly.”
Carrico is unsure how lawmakers will react.
“I’m not sure how the General Assembly will accept it,” Carrico said. “They [city] felt like they needed to be able to draw down the funds. We [General Assembly] were willing to do this [last year] and now the city is asking to change the policy set forth.”
Asked about the amendment’s chances, Carrico predicted, “It will be a challenge.”
The bill has been referred to the Senate Finance Committee.
“The Finance Committee chose to do something outside of what we always did [last year] but put the cri-teria in place,” Carrico said. “I don’t know how they’ll react to this.”
The financial effect of ceding those monies to Bristol sooner rather than later is presently “unknown,” according to the fiscal impact statement accompanying the bill.
Last month the City Council voted unanimously to notify the Virginia Department of Taxation of the city’s intent to fulfill all of the requirements so The Falls can capture the sales tax revenues.
The city’s total estimated commitment to the project is $87 million and the project is forecast to cost about $212 million through a public-private partnership between the city and Interstate Development of Bristol, Tenn.
To date the city has borrowed $25 million in general obligation bonds and used about $22 million to pur-chase about 140 acres along and near Lee Highway. The remaining $3 million is expected to fund site work and relocating a cellular phone tower.
City leaders expect to borrow at least $12 million more in general obligation bonds later this year to help fund expansion of Lee Highway, assuming the Virginia Department of Transportation contributes about $10 million toward the highway work.
Additional borrowing – in the form of revenue bonds – would be used to prepare the site.
To date, outdoor retailer Cabela’s is the only announced tenant.
To view the bill online visit: