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Commission devotes 40 minutes of its hour-long meeting discussing 30 year lease
TOP PHOTO: County Commissioner Beverly Hall brought up the county’s lease with A & B Holdings Inc. at Tuesday’s commission meeting. Commissioner Dewayne Baird is also pictured.
By Charlotte Underwood
JACKSBORO, TN (WLAF)- On Tuesday evening at the regular monthly meeting of the Campbell County Commission, commissioners voted to suspend the rules and add an agenda item that was not discussed at last week’s workshop in order to discuss the 30-year lease agreement with A & B Holdings, Inc.
The lease agreement in question was approved by the 1995 commission and then county mayor Tom Stiner. It was a 30-year lease agreement, with the option to extend the lease for another 30 years once the lease was up, which was due to occur this year. The agreement was renewed as of January 5th, with no action required by the commission as it was in the terms of the original agreement that the company, A & B Holdings, had the option at its discretion to renew the lease as long as the company gave a one-year notification of intent to do so. A & B Holdings did so in November of 2023, according to documents provided by the county. HERE is a related story from December 2023.
The building located on the property that is leased has housed various manufacturing businesses in the past such as Camel, which built tents, PACA, and now is home to BSH’s research and development with “right at 50 employees” working there.
At Tuesday’s meeting, County Commissioner Beverly Hall brought the issue up after her motion to suspend the rules was approved.
“I’ve had questions on A & B Holdings from 2010 to 2014, it’s in our budget every year, I ask what is it, but no one ever gives me an answer… Campbell County has a 30 year lease with A & B Holdings, and I just want to know what we’re leasing, are we leasing the building, the land, what are we leasing to A & B Holdings and what are they doing with it?” Hall asked.
Commissioner Chair Johnny Bruce referred the question to county attorney Joe Coker.
“It’s a lease of property, of real property, that was originally for this 30-year term. Tom Stiner was the county mayor at the time. It is a lease of the entire property and whatever was on it, so it would include whatever buildings are on it,” Coker said.
Commissioner Hall said it was her understanding that A & B Holdings was subleasing the building. She asked the county attorney if that was legal.
Coker said yes it was legal unless the lease restricted subleasing and said that this lease did not and that they did have the right to sublease.
Hall then asked if it was supposed to come before the building and grounds committee and the commission for A & B Holdings to extend their lease.
“The lease itself says that the lessee, A & B Holdings, had the right to extend the lease under the terms of the lease, so it was not something that required further action of the commission. They were required to notify you at least a year in advance of their intent to renew, and they did that,” Coker explained.
Commissioner Hall asked again why it had not been brought to the attention of the commission since the lease had already been approved. She asked County Mayor Jack Lynch why it was not brought before the commission when that intent to renew letter had been sent in 2023.
County Mayor Jack Lynch explained that it was not something that the commission could vote on and that the company had the right to extend it under their lease agreement. He asked the county attorney if he was not correct in that statement.
Coker reiterated that A & B Holdings “had the right under the lease to extend and that it was their option to extend it.”
Coker said that in 2023, an email of the company’s letter of its intent to renew the lease and that it was their option to renew it had been “copied to everybody that was on the commission at that time.”
Coker also said there had evidently been questions about it and that a month later there was a second follow-up letter from the company that had also been sent to commissioners.
This follow-up letter was from Chris Arnold who is listed as the president of A & B Holdings Inc.
That letter was dated Dec. 19th, 2023, and sent to County Mayor Lynch and also sent out to other commissioners, according to Coker.
In the letter, Arnold said he was “approached by a county commissioner” as to why the county set up part of the lease agreement between Campbell County Government and A & B Holdings as a lease in lieu of just selling undeveloped property to A & B and A & B paying property taxes on it. In the letter, Arnold stated that he “did not speak for the county government now or in the past” but rather gave his recollection to the question that was proposed to him.
“My recollection is that the county government at the time that the lease agreement was made is that the county wished to fund industrial recruiting on an ongoing basis and that the rental payment made to the county is equivalent to the site’s assessed property value and is to be paid and used to that end.” In his letter, Arnold invited commissioners to contact him with any other questions.
Commissioner Rusty asked County Attorney Joe Coker if the county owned the building or just the property that the building sat on.
Coker responded that the building would be considered a permanent attachment to the property.
Commissioner Orick said he had tried to research into it.
“What I can find, the county at the time had this piece of property that they traded with the state, I think it was maybe somewhere out at Towe String (Road) and they traded the property and ended up with the property and they were trying to build up some kind of industrial development and they worked out whoever A & B Holdings was at the time, they ( A & B Holdings) built the building. I think it was the company that makes the tents, Camel and the county more or less let them use the property to build on. Now if we own the property, maybe we need to look back and see if we can sell it, but if we don’t own the building itself, how can we sell it,” Orick said.
Commissioner Scott Stanfield asked if the building was a permanent fixture on the county’s property, then why couldn’t they sell it.
“If what you’re asking is do you have the power of condemnation to take the lease back, you would, but of course you would have to pay whatever fair market value the rent of the lease would be,” Coker said.
Orick asked if the county received any payment from the property during the year.
“It’s my understanding you are getting whatever the property tax would be and according to terms of the lease, the property assessor is supposed to adjust the payment based on the changes to the fair market value of the property,” Coker explained. He told commissioners they were asking him things and that he could only answer them by reading the lease himself.
Commissioner Orick said that it seemed like the original agreement had been done for the sake of industrial development.
“We as a commission have always tried to build industry in our county and sometimes, we take the property and actually give it to Joint Economic Development and it works out that way and they do some kind of agreement based on trying to build jobs in our county. I’m guessing that was the reason and intent of this back in 1995, to build more jobs,” Orick said.
Commissioner Hall said that it was “nothing against the Arnolds or the Bowers”, but that she didn’t think it was “fair that the building was a 61,000 square foot building on a 8.79 acre lot and that all the county was getting was their taxes were being paid.”
The building is assessed at $1.5 million according to Hall. Taxes on that are a little over $11,000 annually.
Commissioner Stanfield asked again about selling the property.
If the county decides to sell or transfer the property, the county must prior to the sale or transfer notify A & B Holdings, which has the right of first refusal on buying the property.
“In other words, the county would still have the right to sell the property, but it would be subject to terms of the lease, and if you do that, they will have the first right of refusal. Does that make it more difficult to sell it, of course it does. Coker said. He also said this was “not an unusual type of provision” in commercial leases.
“The point is we were not here in 1995 to make this decision. And here it’s on us in 2025 another 30- year lease just for taxes being paid. Why should this be put on us? And people know about it. They think well, they can go ahead and buy it to bring industry into our county,” Hall said. She also said she thought the building was just being used for storage.
County Mayor Jack Lynch said that was not correct; that the building had industry in it and that it currently” had research and development with right at 50 employees.”
Hall said she knew it had several companies in it since 1995 including Camel, PACA, PTL and now BSH.
Commissioner Stanfield said he thought it should be put on the tax sale and sell it.
“What you would be selling is the land subject to the lease, so that could be done through a bidding process, and it would say they would have the right to match the bid if they wanted to do so. You would want to have an appraisal made of what value the commercial lease has, that would give you some idea of what it was worth,” Coker said.
Commissioner Hall said it had been on her mind for years and that she wanted to “bring it up again at the next commission workshop for more discussion and invite the Arnold’s to come.”
“We can ask questions from them,” Hall said.
Commissioner Stanfield asked if the lease’s renewal could be put on hold.
Coker explained once more that the company had “exercised the option to renew” and that no it was not required that anyone “sign off” on the renewal and that it did not require consent of the county commission.
“So, what you’re saying we still got time to discuss this at the workshop next month and that like any other lease, either party can cancel the lease at any time with 60 days’ notice?” Stanfield asked.
“This lease gives the option of renewal to the lessee (A & B Holdings) not to the lessor (Campbell County). It does not require the consent of the lessor; it requires the lessee to give one-year prior notice of their intent to renew, which they did. Can you discuss it at the workshop, certainly,” Coker said.
“Will it do any good to discuss it at the workshop if it’s already been renewed?” Stanfield asked.
“It has been renewed,” Coker said again.
Stanfield and Commissioner Hall asked who had signed off on it since it had been renewed.
“There’s nothing in here that requires Campbell County to sign off on anything,” Coker said.
He explained again that if the county did decide to move forward with selling the property, which was the county’s right at any time, whoever purchased the property would still be bound by the 30-year lease. In other words, the rent on the property would still be set the same as it is under the lease agreement from 1995 and would be for the property tax annually.
“They would take the place of Campbell County as the owner of the property,” Coker explained.
Commissioner Hall said she still wanted to bring it up at the next workshop for more discussion.
Commissioner Stanfield said he wanted the commission to “look up who was on the commission and who was the mayor that signed off on this.”
The issue will be discussed again at the next workshop, which is slated for February 10th at 6 pm. (WLAF NEWS PUBLISHED-01/22/2025-6AM)