Helping Small Business Grow in Elizabethton through Co.Starters

Small businesses are the backbone of any community and our country. This statement, I’m sure, comes with little surprise to most people. As a matter of fact, over half of the business in Carter County have less than 5 employees and just over 75 percent have less than 10 employees. We also estimate that just under 1 of every 4 workers employed in Carter County work for a small business with less than 10 employees. Imagine the impact if ¼ of the jobs in the county disappeared!

This is the reason small business and entrepreneurship development is such an important objective for our Department. Recently, we have partnered with the Northeast Tennessee Regional Economic Partnership (NeTREP) to bring a new offering for small businesses and entrepreneurs to Elizabethton – Co.Starters.

Co.Starters is a 9-week class targeted to help entrepreneurs take their business ideas and turn them into reality. This is a great opportunity for those who have been thinking about starting a business to get in and learn more about the process and how to be successful. Having been through a portion of this class before, it is also very beneficial for existing small business owners who are looking to improve their business or add in another product to their business.

The course will cover identifying your customer, dealing with competition, developing your messaging/marketing, determining your revenue stream, and identifying your startup needs and costs. The course can be intensive with weekly assignments and a lot of material that will be covered in the 9-weeks. You will also hear from existing successful small businesses and get advisement from business professionals regarding starting your small business. The best part is, once you’ve completed the course, you have the formula and materials to go on and continue to develop and improve your business or start another business over-and-over again.

The classes will be 3-hours long every Tuesday evening for 9-weeks. The classes will start February 12^th, but the registration deadline is Wednesday, February 6^th. The cost for the course is $90 (which is $10 per class) and is open to anyone who lives in or is wanting to start a business in Elizabethton, Carter County, Johnson County, Unicoi County, and Washington County. The course is limited to 12 participants on a first-come-first-serve basis. To learn more or register, visit www.Elizabethton.org/CoStarters.

The development of small business is the future for our community. As those small businesses grow, their success will become the success of our community. And remember to do your part, support our local, small businesses. Let’s talk about it!

Clearing the Air on Pub Bars

As I’m sure everyone in Elizabethton by this point knows, the City Council voted last week to approve pub bars as a new use in the city. There has been a lot of misinformation and miscommunication about what the regulations say and require of pub bars, so I want to take some time today to clarify these points.

The pub bar regulations that were passed last week were specifically tailored to regulate the type of establishment that City Council has desired to allow, while at the same time attempting to discourage the types of establishments people commonly think of when they hear “pub” or “bar.” First, pub bars (along with breweries and microbreweries) are required to provide food. They can be in the form of pre-prepared snacks or platters for purchase or freely available, but they must provide some food. The difference between this and a restaurant is that the primary purpose of the establishment is not to provide food.

There has also been some discussion regarding breweries and microbreweries confusing these issues. Breweries and microbreweries have been legal in the city for almost a year now and the regulations allow for them to have a tap room on-site. When crafting these regulations, we simply looked for similar uses of pub bars (in this case brewery and microbrewery tap rooms) and set a similar standard for them.

Next, in our definition of a pub bar, we require that 80 percent of the alcoholic beverages served must be from a microbrewery (a brewery that produces less than 15,000 barrels annually). This does two things. The first, is it encourages pub bar owners to purchase from small businesses in our region (all the microbreweries in our region produce under 15,000 barrels) where they can easily self-distribute to a local pub bar and, secondly, because craft beer is much more costly than high production domestic beer, it raises the sale price of the beer making the economics of drinking to the point of inebriation unappealing. This same logic has been used at local festivals that have started serving beer with no issues.

Fourthly is the issue of beer on sidewalks. While this was included in the regulations passed last week, there are strict requirements to serve on the sidewalks and in no case would someone walking down the street with a beer in-hand be allowed. The regulations allow for beer service so long as the business owner obtains a sidewalk encroachment permit and provides a barrier between where sidewalk pedestrians are and where beer service is allowed. Patrons of the pub bar will not be allowed to simply sit along the curb, walk down the street, or crowd the sidewalk with the beer in-hand.

Lastly, the City Council will be passing next month an ordinance amendment that will require pub bars to not provide service after 11:00pm. Currently, other establishments serving alcohol can serve later than 11:00pm. This will help ensure that pub bars do not become establishments open all hours of the night or become endless drinking establishments. We encourage our downtown businesses to stay open after 5:00pm, but staying open after 11:30pm or midnight is probably not something we want in our downtown. This will help ensure these businesses stay open late enough to provide a venue for those who desire it, but not stay all night.

City Council and city staff have put a lot of research, review, and have had many discussions with officials from Johnson City, Erwin, and even a few small towns in southwest Virginia regarding the impacts of tap rooms, breweries, and pub bars on their communities. There may be some who are upset and some who are happy, but in either case please do not think that City Council or city staff took the crafting and passage of these regulations lightly. We have worked together to craft regulations that we believe will achieve responsible establishments for our citizens who wish to partake of these types of beverages. Let’s talk about it!

Littering Has an Impact on our Economy

I recently attended a Keep Carter County Beautiful (the former Carter County Proud) meeting and was astounded by the reports of the group on some of their street and highway cleanups. Milligan Highway, Old Bristol Highway, and other various roads around the county (including the city) which individuals had collected multiple full garbage bags worth of random trash just sitting in the ditch-lines. Both of these roads are secondary entrances into our county and, while not likely, very well may be used by tourists visiting us. But, logic would imply that if these roads are like this, our major entrances (think 19E and 321/Elk Avenue) very well may be worse.

Once a year, the Chamber of Commerce has sponsored a river clean up. Every year they pull bags worth of garbage, tires, larger plastic toys, and other household items from our rivers. Similar efforts occur at Watauga Lake and Wilbur Lake each year. If you’ve visited any of the little coves on Watauga or Wilbur lake via a boat or kayak, you know what I’m talking about -- plastic bottles, styrofoam cups, and random pieces of plastics from who knows what. Some of this comes from boats on the lake, while some of it flows into the lake through rivers and streams, but regardless of where it comes from it makes us look bad.

Imagine you plan a family vacation in the mountains out west. You’re looking for something affordable, yet relaxing with things to do nearby. When you arrive, however, you find fast-food bags thrown in the ditch lines, rubber tires trapped along the side of a river that you’ve paid to float down, or a plastic bottle floating beside you on the lake you're paddle boarding on. I don’t know about you, but that would probably be the last time I would visit that place! Sure, the scenery is great, but the trash just ruins that picturesque image of that place.

This could easily be Elizabethton and Carter County. As we work to improve the tourist economy in our county, we must keep in mind that we are opening our home to others. Surely you wouldn’t invite friends over and leave your house a mess. We need to do the same to our community. Save that fast-food bag in the car until you get home or your destination. Many businesses and restaurants have garbage cans right outside their entrance that you can use. Take advantage of our free, County operated recycling centers, return used fluorescent bulbs to Lowes, or plastic bags to Ingles or Food City. Help keep our home ready and prepared to accept visitors. After all, they’re helping us and our economy more than we’re helping them! Let’s talk about it!

Less Parking, High Density means more Revenue

Property values are something that are vital to the cities in Tennessee and, for the most part, most cities in modern America. Almost every state has a revenue model that allows cities and counties to collect property taxes to pay for services. It is important for cities to, therefore, protect and increase property values. This is why we have a property maintenance officer, this is why cities condemn and demolish old, dilapidated homes and buildings, and this is why cities control development patterns – all to protect and increase the property values.

One way of comparing property values is by using a similar unit. An analysis suggests using the value per acre as a measure to compare developments. Using this process, can you guess which buildings in the city are the most valuable? Walmart? Lowes? Maybe one of our shopping centers? Oh, what about Snap-On? Certainly, these businesses do provide a lot of property taxes to the city and county, but the answer is no. On a per acre basis, the most valuable commercial property in the city is the Downtown Branch of Carter County Bank. The value, $5,765,670 (per acre of course). In other words, if we had an entire acre of property and built nothing else on it except buildings like the Downtown Branch that property would have a value of just over $5.7 million! Walmart on the other-hand, has a per acre value of $523,907, Lowes $537,179, and West Towne Shopping Center $392,903.

So, what could cause such a deviation in these values? After all, it’s not like Walmart or Lowes is a cheap building. Well, one of the biggest differences is the use of the property. Think about the Downtown Branch of Carter County Bank – the building takes up almost all the property and has a second story that is used for offices. Walmart, Lowes, and West Towne have huge buildings (in comparison) but have even bigger parking lots. Walmart alone has just under 9 acres of parking lot! The value of the parking lot is essentially $0. Having a vacant property with a parking lot on it provides little to no increase in the property value.

While parking lots are a necessity, an almost 9-acre parking lot (which was required by the city at the time) seems a little excessive. How many times a year do you see it full? Even requiring Walmart to have 1 less acre of parking could have resulted in having another restaurant like the size of Bojangles or Captain D’s. These would have generated at least increased the property value more than a parking lot resulting in additional tax revenues.

While the answer is certainly not getting rid of parking requirements, it might serve us well to reduce parking requirements and encourage denser development. This will help ensure that the city is getting the best return on our investment both when we invest roads and water and sewer infrastructure into a project. Let’s talk about it!

Bringing Main Street to Downtown Elizabethton

You may have heard more recently about the national Main Street Program. This is a program founded by the National Trust for Historic Preservation as a way to help historic downtowns and commercial neighborhoods revitalize. The program has been used across the county with much greater success than most other revitalization program. As a matter of fact, there are over 1,600 current Main Street communities nation-wide, 34 Main Street cities in Tennessee, and 58 Downtown cities (Main Street’s program for smaller towns) in Tennessee.
 The Main Street program helps communities organize and develop a community vision for their downtown. This is essential to ensure that we make sure we’re moving our downtown in a consistent direction forward. The program also looks at market capacity. What types of businesses do we need that would do well in the Elizabethton market. That information is then used to help develop a realistic vision for the future of the downtown and to help recruit new businesses to downtown.
 The program then utilizes the community vision and market information to help transform a downtown. During the transformation phase (which is never-ending), the program utilizes four areas of focus to ensure that community goals and the vision are being accomplished – economic vitality, design, promotion, and organization. Commonly, each of these four points have their own sub-committee of the larger Main Street board which oversees the program. Each of these sub-committees would contribute to the vision by focusing on their point. As time moves on and each of these points gain a clearer focus, and downtown development will begin to improve.
 A working committee of people with a range of ages made up of city councilmen, downtown businesses, downtown property owners, and chamber of commerce representatives, have been working and considering options for downtown revitalization and enhancing our downtown to take it to “the next level.” The committee has heard from some national and state speakers on the topic, visited other communities to see what they’re doing, and studied options that the State of Tennessee has to offer.
 At this point, they are considering recommending that Elizabethton become a Main Street community but are still looking for input. They’ll be holding a public meeting Wednesday, November 7^th at 5:30pm and another on Thursday, November 8^th at 8:00am at the Coffee Company to present this idea and gather input from the community to see if there is enough support locally.
 Elizabethton becoming a Main Street community brings a lot of positives for our downtown, but there are also some challenges. The Main Street program requires a full-time staff person, funding, volunteers, and, most importantly, downtown business and community support! This is not a program that the city can just create, and the success will happen. The most successful programs are usually independent of city government with their own funding sources and volunteers. In short, the most successful programs involve you. The program will not be successful if citizens who want to see success in downtown do not participate, attend meetings, and volunteer for events. We all have busy lives, but volunteering on the board or sub-committee for a few hours a month or giving your time to a downtown summer event is the only way success will happen. Are you in? Let’s talk about it!

New Incentive Policy Benefits Everyone

As reported in the Elizabethton Star, the Elizabethton City Council and the Carter County Commission have recently approved an incentives policy to promote the growth and recruitment of new industry and businesses to Elizabethton and Carter County. I’ve had a few people ask what the policy was all about and why do we even need an incentives policy, so I thought I was write about it.

The policy that the Council and the Commission passed, gives the authority for the respective Industrial Development Boards to give incentives to companies meeting certain requirements. These include things like hiring a minimum number of people and providing health care and a retirement plan for those people, building an addition to an existing facility, and expanding equipment at the facility. Additionally, this policy also gives these same incentives to tourism-based businesses – which is now unique only to Carter County in Tennessee.

Having this policy in places gives companies and economic development staff the assurance that incentives can be offered. Essentially, most companies don’t want their business aired in a public meeting – especially if they’re negotiating on an expansion – to help protect their stock-holders and prevent their competition from finding out. Without this policy in place, every time a company wanted an incentive they would have to go before City Council to negotiate one agreement and before the County Commission to negotiate another agreement which may be vastly different. This policy streamlines this process for the business.

It’s also beneficial for the government and tax payers in that we’ve developed the policy based on what the true return-on-investment of the business will be to the tax base. Unlike some incentives in the past, where we’ve arbitrarily given all the property taxes away with little to no consideration to the fiscal impact on the city and county, this policy takes those elements into consideration. It offers a workforce incentive based on existing ratios of workers living in Carter County, payroll to sales tax, and city to county sales tax. This looks at return-on-investment by ensuring what the city and county give in workforce incentives comes back in the form of sales tax revenues.

A similar analysis was done (albeit much easier to calculate) with real property and personal property taxes and in these incentives, we only incentivized the increase in the property taxes that would have been paid on the expanded building or new equipment – like tax increment financing. This helps ensure that the city and county will continue to receive the revenues they have always received from these businesses in order to pay for the public services that they still consume.

Lastly, to prevent the incentives from getting too out-of-hand, we have capped them at 40% of what the existing company already pays in taxes. Keep in mind, that an industry may pay $40,000-$100,000 in property taxes annually and when the city or county decide to fully abate their taxes the government lose all that money at once – which could easily be a 2-3 people’s salary and benefits. Capping the incentive at 40% of will ensure that the company will pay at least 60% of what they’ve always been paying in taxes while still giving them relief on any capital expenditures.

This policy was intentionally written to protect the tax-payers while incentivizing existing and new companies and its adoption serves as a win-win-win for the companies, governments, and tax-payers. Let’s talk about it!