Planning commission defers vote on annexation for state licensing office pending corrected financial analysis

The Johnson City Regional Planning Commission on March 11 deferred action on a proposed voluntary annexation of roughly 3.9 acres along Bobby Hicks Highway that would allow a State Department licensing office and skills-testing course to locate on the site.

Planner Callie McGrew told commissioners the parcel is contiguous to the city limit, sits inside the urban growth boundary and that staff recommends annexation with a B5 (planned community business) zoning assignment. McGrew said the project “is expected to be an expense of $290,637 and generate $8,735 for the city” under the financial analysis on file, but she also noted the project is a state lease and the applicant is present to address financing and tax questions.

Property owner and developer John Davenport told the commission he is building the facility as a “build-to-suit” for the state and that the state will lease the building. “There will be city taxes paid out of this once we get it constructed,” Davenport said, adding he expects to break ground around May 1 and estimates an 11- to 12-month construction period with an anticipated opening no later than April 1, 2027.

Commissioners pressed staff and the applicant on the fiscal numbers before committing to about $290,000 in sewer-line extension costs. Staff explained the sewer would be extended roughly 750 feet along Bobby Hicks Highway and that the extension could enable service to neighboring properties as well. Commissioner Laura Kelly said it would be “nice to know from a comfort perspective” whether the city’s upfront expense is justified by property-tax revenue over a reasonable payback period.

After discussion, the commission voted to defer the annexation until its April regular meeting so staff can provide a corrected and updated financial analysis. The roll call on the motion to defer was: Commissioner Aldridge, yes; Commissioner Cooper, yes; Commissioner Dutton, yes; Commissioner Goodson, no; Commissioner Kelly, yes; Commissioner Williams, yes; Chairman Degenhardt, yes. The motion passed 6-1.

The applicant and staff did not provide a firm property-tax estimate at the meeting; Davenport said final taxes would depend on the county appraisal at project completion. McGrew cited the city’s bridge-plan policy 1.18 as supporting annexation requests inside the urban service area when the property requests water and sewer, but commissioners said the fiscal analysis needs correction before the commission takes final action.

The item will return to the commission’s agenda in April with an updated financial review for commissioners to consider before voting on annexation or zoning assignment.