The city of East Ridge is dipping into its reserves to make the last of $4 million of city payments to a private developer preparing a 40-acre retail development to be anchored by a new Bass Pro Shop.
Despite warnings that the move might hurt the city's bond rating, the East Ridge City Council in an unusual Sunday session voted unanimously to drop its requirement to maintain a three-month budget reserve in its rainy day fund. The city is paying a group headed by Chattanooga developer John Healy the final $1 million incentive payment this week for site preparation near Exit 1 on Interstate 75 in East Ridge.
John Healy
Marc GravittThe move will cut the city's reserves to only $2.6 million -- equal to just over two months of its $11 million general fund budget. East Ridge Mayor Brent Lambert said the three-month reserves previously held by the city was more than what most Tennessee cities maintain and the new retail project build near Camp Jordan will more than pay for itself in economic development and tax collections for the city after the Bass Pro Shop opens in 2016.
State Rep. Marc Gravitt, R-East Ridge, who is vice chair of East Ridge City Council, said Bass Pro helped East Ridge become one of only three cities in the state with a border region designation in which most of the growth in state sales tax revenues will flow to the city.
In a similar border region created to lure a Bass Pro Shop to Bristol near the Virginia state border, the city provided developers $25 million of local assistance.
"Bass Pro is the most recognizable outdoor sporting goods store in the nation and this store will be substantially larger -- and a bigger draw -- than any of its competitors in this region," Gravitt said Monday. "It will be the largest single positive economic impact that the city of East Ridge has ever seen."
Within border regions, 75 percent of the growth in state sales tax collections not allocated to education can be kept by the cities where the additional revenue is generated. The extra sales and property taxes generated by Bass Pro Shop and other retail development spurred by the attraction should boost East Ridge tax collections by more than 50 percent once the new facilities are built and opened in the next couple of years, Healy said.
"Anytime you have a project of this size and complexity, you run into some challenges along the way," Healy said. "But Bass Pro is moving full-steam ahead and you should start to see vertical construction on this site by this summer. With the additional sales tax revenues generated by this store and others in the 950-acre border region, East Ridge should be a big winner."
East Ridge acquired property from the state highway department along Interstate 75 near Exit 1 to house the new Bass Pro Shop. But the low-lying site required major infill to avoid flooding, the relocation of one of the city's firehalls, and a $603,000 payment to the Tennessee Department of Transportation for the increased value of the parcel the city used for the fire hall. To entice the Bass Pro Shop to locate in East Ridge, the city also agreed last summer to a $4 million incentive package for Exit One LLC, the partnership created by Healy's Wolftever Development Co.
Healy said the site for where the 85,000 square Bass Pro Shop will be built was prepared and ready in April and "and we're talking with several other prospective tenants right now" which he said are interested in locating near the new outdoor retailer.
Gravitt said Bass Pro, combined with efforts to improve the on and off ramps at Exit 1, should spur more investment in East Ridge beyond the 40 acres being developed by Healy.
Life Care Cener of East Ridge is building a new $24.8 million facility to replace its existingng nursing home and the La Quinta Inn on Ringgold Road has been completedly remodeled.
"The whole Exit 1 area is going to change in the next 24 months and that should lead to significant investments in East Ridge," Gravitt said.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.
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