By JEFF FARRELL

Staff Writer

SEVIERVILLE — Helping developers pay for the Dumplin Creek development would set a precedent for the city in directly aiding in building infrastructure, Mayor Bryan Atchley said Tuesday. Even if the Board of Mayor and Aldermen opts to climb out on that limb, it will have to find a source for the funds.

Developer John Turley — the main force behind the project, and the main force behind the Turkey Creek project in West Knox County — asked BOMA on Monday to consider paying $8.5 million toward completion of Dumplin Creek Boulevard. The road would run alongside Interstate 40 from Highway 66 to Bryan Road.

The board is expected to review the issue at one of two workshops before its regular meetings next month. Tuesday, Mayor Bryan Atchley said the proposal brings with it a number of issues — not the least of which is whether to abandon policy of keeping its fiscal hands off of private developments.

“When a developer has come in we’ve never participated in their infrastructure,” Atchley said. “That’s not to say we never would, but that’s what we’re going to talk about.”

The city had previously discussed creating a special assessment district in the area. That would have given Turley and his partners access to special bonds to pay for the road and other infrastructure, as well as the ability to add an assessment on the property that would have been used to pay the debt without involving the city.

However, Turley said Monday that it wasn’t feasible to fund the project that way for some time. “These are different times we’re in,” he said in a release issued after the meeting. “Selling bonds based on ‘future income,’ without existing buildings and tenants, is impossible.”

His plans still call for creation of a special assessment district, he said, but not until 2014 — and they will need to pay for the road before then.

Turley offered a number of factors he said would make his project different from other projects whose developers might ask for aid from the city. He said his Kodak Land Co. would give $2 million toward the project, and it has obtained a grant for another $2 million, putting the total cost at $12.5 million.

He also said he believed the city would quickly recoup the $8.5 million through sales tax revenues from the Wal-Mart Supercenter that is planned as the anchor for the project. “Wal-Mart alone will pay back the $8.5 million in the first two years,” he said.

Wal-Mart has signed a contract to buy a lot in Dumplin Creek, and the city’s planning commission has approved a site plan for or the store. But Turley said the chain could still pull out of the deal, and one of the factors it is looking at is how quickly the road is built.

He also noted that the Dumplin Creek project could help the city repay the bonds used to pay for the Central Business Improvement District.

By creating the district, which runs along Highway 66 from the interstate to downtown, the city was able to access about $200 million in bonds. Those funds are to be repaid using sales tax revenues from within the district. Under state law the city can collect sales tax revenues that would ordinarily go to other government bodies including the state and the county, and uses that money to pay off the bonds.

The city has drawn about $150 million in bonds so far, and used the money to pay for its new Events Center, improvements to Gists Creek Road and Old Knoxville Highway, and other projects.

However, it has delayed drawing the final portion of the bonds because of the downturn in the economy, and more particularly because the retail development planned in the same area has stalled due to the recession. The city’s projections for paying the bonds included sales tax revenues from that project. Turley suggested Dumplin Creek could fill in for the project unit it comes on line.

“The return to the city is enormous,” he said. “Nearly $140 million in sales taxes generated the first eight year alone.”

To back that up, he included letters from a retail real estate firm that reflected strong interest from another of well-known retail chains in coming to Dumplin Creek. He also included a timeline calling for substantial development by 2012, with Wal-Mart opening ahead of the other stores in 2011.

Local governments in Knox County helped pay for the extension of Parkside Drive through the Turkey Creek development, he noted. They paid about $6 million for that cost, along with additional funds for other infrastructure in the area. Now, he said, the city of Knoxville alone collects $6 million a year in sales tax revenues — without the additional revenues Sevierville would get because until the CBID bonds are paid because the project is in district.

It was when work started on that road, he said, that tenants began committing to Turkey Creek instead of just showing interest. “The minute we started Parkside was the minute Turkey Creek took off,” he said.

He also brought up the need for a new interstate interchange in Sevier County, saying that a connection to Bryan Road could help encourage the state and federal governments to add a new interchange in that area. He also noted he campaigned for new funds for the city, including the Highway 66 expansion and improvements to Exit 407.

Alderman Barry Gibbs, a long-time proponent of an interchange in the Exit 408 area that could connect to the planned bypass around Knoxville, seemed to support the concept. He also noted the city committed to bringing growth to that area when it included the region in the CBID.

“We as a city ought to find a partnership when we can, where we can,” he said Monday night.. “This is a kite we ought to put tail on.”

Even if the city agrees to fund the road, Atchley noted it will have to consider where to obtain the funds.

If the board wants to use CBID funding, it would have to take the proposal back to the state, he said. The city can shift CBID money from one approved project to another on its own, but must get state approval before it can add another project to the slate.

Even if that happens, the state is unlikely to approve additional funds — so the board would have to take money away from one of the existing projects, including further work on Old Knoxville Highway and Veterans Boulevard.

Atchley also noted the city couldn’t count on projected revenues, without looking at what it would do in a worst case scenario.

“You can set all the criteria you want, but if the project fails and there’s no revenue, you’re stuck.”

jfarrell@themountainpress.com