A TIF program uses increased, future real estate tax revenues to fund new improvements designed to attract additional industrial investment and job creation.
The recession of 2008 paired with increased energy code requirements (IECC Regulations) and tightening environmental regulations created a perfect storm hitting industrial development. Typically, industrial developers build “speculative” buildings in anticipation of future tenant demand. These buildings are a financial risk to the developer, but a benefit to the local community as it allows for quick occupancy to potential manufacturing and distribution companies.
As the recession hit, manufacturers became cautious with expansion plans. In the same time period, the federal government increased energy and environmental regulations driving up construction costs 15%-18% and essentially erasing the potential profit for speculative builders. The market of potential manufacturing or distribution users were not willing to pay the additional costs; and, as a result, very little speculative industrial space was being built.
This widening gap for new industrial space rent versus used industrial space rent resulted in a continuing reduction in the supply of existing industrial space. Ready industrial space for manufacturing, distribution, and warehousing is a critical element needed by expanding businesses. Manufacturers need to capitalize on market opportunities in months not years; so, if ready industrial space is not available, then businesses cannot capture the opportunity and fail to grow.
To stimulate the expansion of speculative industrial space, and in turn industrial employment growth, governments can turn to incentive plans to offset rising costs. While this may seem short sighted to some from a tax standpoint, the reality is quite the opposite. Communities with immediately available industrial space have a much higher opportunity to attract new prospects, nor is it risky for the community granting the TIF. The TIF loan is paid back by the increase in property taxes and is guaranteed by the developer receiving the TIF.
The community leaders of Anderson County, TN saw the opportunity to restart speculative industrial development in their community with a TIF. Working with The Hollingsworth Companies, the Anderson County Commissioners and Industrial Development Board of Anderson County have approved a TIF for two industrial buildings and site infrastructure to be developed by The Hollingsworth Companies.
“This TIF will result in 2 speculative industrial structures of 126,000 SF each that include 13,100 SF of commercial office space”, said Bear Stephenson, Chairman of the Anderson County Industrial Board. “It is anticipated these buildings will attract automotive, plastics, nonwovens, and various other manufacturing and distribution companies and the resulting jobs to Anderson County.”
The Hollingsworth Companies’ In-house Attorney (Jamie Huskins) and SVP of Architecture and Business Development (Tom Wortham) worked with the county commissioners and industrial development board to develop the documentation and gain approval for the Tax Incentive Funding.
"I fully recommend working with The Hollingsworth Companies if cost or time driven schedules play a part in your company's opportunity because they do deliver within budget and on time with no change orders or surprises." -- David B. Sutherland, CMS Companies
"Southern states are home to 50 million more residents than the Northeast. In corporate growth, only the South has shown a positive net migration in the early 21st Century." -- Plano Star Courier
"We invited The Hollingsworth Companies to our Atlanta Offices. Within two weeks all negotiations were completed and the lease was executed. From beginning to end, it only took 45 days to complete our requested up fits." -- David B. Sutherland, CMS Companies
"The bottom line is that we could not be more pleased with our Hollingsworth Companies experience." -- Karl F. Hielscher, President and CEO, Metl Span
“From greenfield startup to becoming a national industry leader 10 years later, Hollingsworth continues to play an invaluable role in Service Center Metals growth and success.” -- Scott Kelley, President and CEO, Service Center Metals
"Hollingsworth entered an agreement to ensure quick delivery of the pre-approved standard building sizes . We are committed to deliver the structural steel, ready for erection, in just 6 weeks from receipt of a final building order." -- Jeff Carmean, General Manager, Nucor Building Systems
"Joe Hollingsworth participated as one of our first equity investors. In addition, Joe Hollingsworth has served as a board member and leading advisor for strategic planning and direction." -- Scott Kelley, President and CEO, Service Center Metals
