NETWORKS presents proposed distribution facility project

BLOUNTVILLE — At Wednesday's NETWORKS Sullivan Partnership meeting, the board discussed an economic development project that could bring hundreds of jobs and over $100 million in capital investment to Kingsport. NETWORKS CEO Clay Walker told the board the project, referred to by the code name of "Project Inlet," is at a critical point to move the development forward. "They have presented to us a proposal to purchase, but there's a lot of due diligence to it, and a lot to be worked out before then," he said. "We met with the property committee this week, and Michael [Parker] will go over the details about that." Parker, NETWORKS director of economic development, said Project Inlet represents a large distribution facility project, anticipated to create 100 to 200 jobs. That number could also grow based on later progress on the project. "Project Inlet submitted a purchase sales agreement for the 41.41 acres we currently own on Airport Parkway," he said. "This is the property that we purchased from the [Kingsport Economic Development Board] in 2024 for $697,000." According to Parker, the company intends to build a 152,000 square feet distribution facility with roughly 900 employee and delivery van parking spaces. The company's purchase proposal is $716,500 — which is more than what NETWORKS paid for the property. What is less typical, is NETWORKS would pay $43,500 in commission to the company's exclusive brokerage consulting firm. He noted there is a 180-day contingency period in the proposal with two 30-day extensions built in. "The net purchase price, which is $17,500 per acre, that's our price," Parker said. "We told them that's the sales price for the site. So they increased the purchase price to accommodate that $43,500 commission. So essentially, the company is paying that, paying us more for the acres than we requested." NETWORKS still retains the right to repurchase the property after two years if the company fails to construct anything on site. Looking ahead Moving forward, Parker said NETWORKS will still need to work on setting up an additional access point, sewer line extension hookup and a repurchase amount and reversible site expenses. The company is requesting separate entrance points for its delivery trucks and employee parking as well. "As part of the purchase sales agreement, there is language that insinuates or includes that we will deliver an additional access point that we currently do not own or control," Parker said. "So this access point indicated on the screen here in front of you is privately owned by the adjacent landowner. NETWORKS and the city of Kingsport are continuing to work with that landowner to secure either an easement or the outright purchase of probably two acres, to secure an additional access point." While the property is currently not served by Kingsport's sewer service, the city's land use and development plans show intention to extend sewer service to the site as it is developed. NETWORKS is working with the company to establish a repurchasing cap amount for budgeting purposes. "One of the things that in their purchase sales agreement is that they would request to repurchase them out to include some site expenses that would be mutually beneficial to NETWORKS If we were to reclaim them," Parker said. "Those would be environmental due diligence that go with the site or physical site improvements." Parker said the company does not plan to request state or local incentives of any level. Not much else on that front could be disclosed as NETWORKS is under a non-disclosure agreement with the company to not reveal its identity during this stage of the development process. "We are under NDA, there's no point in getting into the details, but we have done our due diligence on the company when they've done other such projects, and it gives us a very good feeling," Walker said. NETWORKS secured a $100,000 site development grant for due diligence work at the Airport Parkway site, which was announced in early February this year. The organization is slated to spend $42,000 to match the grant for due diligence. "Personally, I have very little concern that this project will not move forward at a very fast pace, and we'll see construction very soon," Parker added. The board unanimously voted to set a repurchasing cap amount of $1.1 million, which matches the amount of funds received to purchase and develop the property. NETWORKS will hold its next board meeting at 8 a.m. on May 13 at the Northeast State Community College Technical Education Complex Corporate Training Center in Room T027. For more information or to RSVP, email amease@networkstn.com.