A memorandum of intent that was approved this week will provide the basis of a taxing agreement between the City of Knoxville and the Knoxville Veterans Alliance. The agreement calls for Tax Increment Financing over the maximum-allowed 20 year period. The City will refund 100% of allowable income taxes to the Veterans Alliance over the first five years, 75% in next five, and then 50% and 25% over the next two five year periods.

After 20 years, 100% of those taxes will be on the city’s tax rolls. City Manager Harold Stewart says that’s an estimated 2.3 million dollars in TIF money for the Veterans Alliance. He adds that these incentives speak to the importance of the project and its success.

The Department of Veterans Affairs recently ruled that the grounds of the VA Campus themselves were not taxable, but any improvements made to buildings on the campus would become subject to property taxes. KVA project manager Mike Roberts says negotiations are ongoing between the KVA and Department of Veterans Affairs, and they hope to have the lease signed by the end of next month.