BRISTOL, Tenn. — The Pinnacle has proven to be a boon for Bristol, Tennessee’s coffers with tax revenues netting the city nearly $9 million over the past five years.
An impact summary on the development acquired from the city by the Bristol Herald Courier through a Freedom of Information Act request shows property tax, shares of state sales tax and local option sales tax revenues generated by businesses in The Pinnacle and Border Region Retail Tourism Development District from fiscal years 2014-2019 totaled $8.7 million, exceeding the $5.7 million the city made in payments for debt it accrued to help make The Pinnacle happen.
However, the true revenue amount generated for the city by the retail complex off Interstate 81’s Exit 74 is higher because the city did not provide data on revenue from the business tax, liquor-by-the drink tax and hotel-motel tax. Tara Musick, the city’s director of finance, said the city could not provide that information because the revenue from those taxes isn’t tracked separately from what’s collected in the rest of the city.
Also, the city has not yet received its portion of the state sales tax allocated through Chapter 420, Tennessee legislation that allowed Border Region Retail Tourism Districts, for fiscal year 2019.
The sprawling commercial space, developed by Steve Johnson and his business, Johnson Commercial Development, presently has about 20 dining spaces, about 50 retailers and it’s still growing, with new buildings under construction as well as a Best Buy and T Mobile store confirmed as new additions.
In 2014 and 2015, when there were fewer businesses, tax revenue from The Pinnacle didn’t exceed the city’s debt payments. But now the development is reliable enough that when city officials know a new business will be added, the expected revenue is factored into the next year’s budget, Musick said.
The Pinnacle is the recipient of a couple of tax incentives and was the key to getting Tennessee to adopt Chapter 420 legislation. The Border Region Retail Tourism Districts allow developers and cities to keep a portion of state sales taxes generated in the district, an arrangement the city and the developer now benefit from. Additionally, a tax-increment financing agreement for The Pinnacle that diverts some property tax revenue to help the developer recoup some costs until it expires in 2042 was approved by the city and Sullivan County in 2012.
Beyond the incentives, the city also put some of its own money up to make the development happen. In 2013 and 2014, the city took out a combined $27.2 million in bond debt to help finance some infrastructure. According to a summary of the city’s outstanding debt presented by its financial advisor, Cumberland Securities Co., the last scheduled payment for that bond debt is set for fiscal year 2038. When those debts are finally paid off, the city will have spent $42.6 million over a 25-year period, Musick said.
The city’s current yearly payments hover around $1.1 million and will stay there for several more years. Starting in 2024, when the city has finished paying off some other existing debt, it will start paying about $2.1 million per year for The Pinnacle-related bond debt. But Musick said the city does not anticipate any net losses between those debt payments and revenue from The Pinnacle even after the increase in yearly payments.