City OK's tax break change for CKNA

Friday, October 14, 2011

By Clint Confehr

Senior Staff Writer

Without much fanfare and a unanimous vote, Lewisburg councilmen have modified an agreement with the city's largest employer so the industrial tax break accommodates new investment and more jobs.

Also during the council's monthly meeting on Tuesday, it was announced that Kingsley Brock, an assistant commissioner of Tennessee's Department of Economic and Community Development, would confer with city officials next month during a council retreat at Henry Horton State Park.

Both steps reflect city officials' concern over continued recessionary conditions in Marshall County where the most recent unemployment statistics show 13.8 percent of the workforce is without a job.

When CalsonicKansei North America established its factory here to make parts for the Nissan car and truck plant in Smyrna, the original investment was $14.4 million, City Attorney Steve Broadway said. Now, CKNA, a Japanese company, plans to bring in new machinery and modify its plant in the city's Industrial Park. The new investment is valued at $1.5 million.

"It will be for 50 jobs," City Economic Developer Greg Lowe said. "That's to start at the plant in the fourth quarter of 2012."

What city councilmen did on Tuesday was modify a Payment In Lieu Of Taxes agreement. Dubbed a PILOT Agreement, the contract waives a percentage of the company's property tax liability. That's possible because, technically, the city will own the factory, property and equipment until the end of the agreement in 2027.

The tax break also applies to CKNA's tax obligation to the county because the city is a tax-free entity.

"It's really a nice trade-off," Lowe said.

Councilmen have taken the same attitude when they granted a PILOT Agreement with the owner of the Arby's roast beef sandwich shop on Ellington Parkway a few years ago. Without the agreement, no development might exist, and taxes on vacant land are considerably lower than taxes, and even payments in lieu of taxes. Furthermore, officials have explained, without the agreements, no new jobs would be developed.

CKNA employs 563 people now. Job openings with the company are described on the company's Web site.

Since the new jobs are for work on the Nissan Leaf's inverter and charging system, the work requires skilled labor with college degrees. The company does, however, have turnover in employment and jobs are available here, Shelbyville, and other cities with CKNA plants.

The Tennessee Department of Labor will issue county unemployment figures next Thursday.