Photo: Chattanooga Mayoral Candidate Tim Kelly Speaks at Kiwanis Club Mayoral Candidate Forum in Hixson, Tennessee
Published February 22, 2021
Chattanooga, TN – By relocating his business, Southern Honda Powersports to East Ridge, Tim Kelly gets to pocket more than $1.9 million into his personal bank account while costing the city of Chattanooga nearly $5.3 million in tax revenue over the next 22 years.
The annual breakdown of the Border Region Sales Tax Rebates that Kelly will receive over the next 22 years, based on his company’s projected sales, is $243.2 million.
During a recent Kiwanis Club candidate forum in Hixson, Tennessee, Chattanooga Mayoral Candidate Tim Kelly boasted about the decision to relocate his Honda business to the city of East Ridge.
Kelly was asked the question by the moderator, “Can you explain why you moved your dealership out of the city (Chattanooga)?”
Kelly said the decision to move to East Ridge was “a no-brainer,” when East Ridge announced their Border Region Development Act.
Kelly acknowledged State Representative Esther Helton, who was also attending the meeting, encouraging people to talk to her about it and said, “She knows all about that. It’s a heck of a deal. If you’ve got anything generating sales tax, you should be looking at that.”
Kelly stated that he was always going to move his dealership to East Ridge, but then said once again, “It’s a heck of a deal. I don’t know why Chattanooga didn’t take advantage of it.”
The new $10 million Southern Honda Powersports project in East Ridge on Ringgold Road is actually smaller than Kelly’s current facility at 73,000 square feet.
Speaking to tax dollars brought in by Southern Honda Powersports Kelly said, “I am proud to say that it has generated a ton of sales tax down there that will still accrue to Hamilton County, either way, even in the new location.”
“I don’t regret the decision in any way, shape or form,” Kelly said, and that he is proud that he “created jobs from thin air.”
Kelly promised that, if elected Mayor, he will make sure that whatever takes the Southern Honda Powersports business location on Workman Road will “serve the city and the community just as well.”
Kelly stated that he bought the Griffith Honda on Dodd’s Avenue and that Griffith was only selling 80 or 90 units a year.
After the purchase, Kelly introduced a “new business model” and turned it into the largest Honda Powersports dealer in the nation, and possibly the world, according to Kelly.
After this explosion in business, Southern Honda Powersports outgrew the Dodd’s Avenue location.
“We ran out of room so we moved across to a large 100,000 square foot warehouse that Joe Proctor sold me over on Workman Road.”
He went on to say that the location on Workman Road isn’t a “mall location.”
“It’s not what anybody would consider a retail location,” Kelly said.
Kelly stated that after moving to the location on Workman Road, he almost immediately began looking for another location to relocate his business.
With the introduction of the Border Region Retail Tourism Development District Act, Kelly had incentive to bet against the city of Chattanooga and move his business to East Ridge.
The Act, sponsored by former Tennessee Representative Matthew Hill, Jonesborough (R) and co-sponsored by former Representative Micah Van Huss, Sulfur Springs (R) and current Representative Esther Helton, East Ridge (R) is summarized as the following:
“The purpose of this chapter is to increase tourism and the competitiveness of this state with bordering states by empowering local governments to encourage the development of extraordinary retail or tourism facilities, including shopping, recreational, and other activities.”
A recent amendment to the Act is currently in committee as House Bill 0330 and is sponsored by Helton. The companion Senate Bill (SB 0421) is sponsored by Senator Todd Gardenhire, Chattanooga (R).
The House and Senate bills are summarized as follows:
“As introduced, increases, from 30 to 35 years, the maximum time period during which a certain portion of state sales taxes are allocated and distributed to a municipality or industrial development corporation that finances development of an extraordinary retail or tourism facility project in a certified border region retail tourism development district. – Amends TCA Title 7, Chapter 40.”
