MCRA hits snag in negotiations with Mohawk

At last month’s Mingo County Redevelopment Authority meeting, the board agreed that it might be in the agency’s best interest to explore the possibility of abating some or all of Mohawk Industries’ remaining lease payments in return for the company conveying its former buildings and assets at the James H. “Buck” Harless Wood Products Industrial Park to the MCRA.

While the MCRA owns the land on which the buildings sit and is still scheduled to receive lease payments in the amount of $10,000 per month (a total of $100,000) from Mohawk through September of 2021, the wood manufacturer has ownership of the buildings.

Pursuing the conveyance of the buildings followed an earlier discussion between MCRA Executive Director Leasha Johnson and Deputy Executive Director Greta Curry and a Mohawk representative, who indicated that Mohawk might be interested in the deal.

Johnson said Mohawk officials later expressed a serious interest in the proposition, particularly since the company has not been able to find a buyer for the buildings in the more than two years since it ceased operations there.

However, a formal proposal sent to Mohawk hit a snag, which Johnson said would have to be mitigated before the MCRA could go any further in the negotiations.

“When we first conveyed to Mohawk that we were willing to accept a transfer of the buildings and assets in exchange for an abatement of our remaining lease payments, they said okay if they could accept our offer effective Nov. 1, but that it would be weeks before we could take possession of the property,” she said.

Johnson said after she questioned the Mohawk representative about what “weeks” entailed, he relented somewhat and told her that it would only be a couple of weeks and for the MCRA to prepare the bill of sale.

“We prepared the bill of sale…and in the bill of sale we indicated that we didn’t want to be responsible for any of the tax liability for 2019 and 2020, and of course they came back and their red line indicated that they wanted the tax rate to be prorated.”

Board Chairman Paul Pinson pointed out that because the tax rate is assessed July 1 of each year, and since Mohawk was still the owner of the buildings when the tax was assessed in July, 2019, the entire $53,000 assessment would be the company’s liability and not the MCRA’s unless the MCRA agreed to assume it.

“Unless we agree in our bill of sale to take over that obligation, I don’t think we have that obligation or that we should assume it,” Pinson said. “It’s assessed as of July 1 in their name, not our name.”

“I think they’re thinking from July to October would be their portion of the tax liability and from November to next June would be our portion if we assumed the buildings in November,” Johnson said.

After more discussion, the board authorized Johnson to resend the bill of sale agreement back to Mohawk, with the MCRA redlining the agreement again to omit the tax proration stipulation along with an explanation as to why having the tax liability prorated would not be applicable as part of the deal.