The Scam Continues: HomeServe receives jobs expansion tax break from Hamilton County

by Paul Leach  /  Chattanooga Times Free Press

HomeServe USA has secured a five-year tax break for its $5.7 million East Brainerd expansion plan.

The company, which sells monthly major household repair plans to homeowners, has operated a call center in Chattanooga since 2010. Based in the United Kingdom, the company’s United States headquarters is located in Connecticut. It serves more than 2 million customers in the U.S. and Canada.

On Wednesday, Hamilton County commissioners voted 8-0 to enter into a five-year payment-in-lieu-of-taxes [PILOT] agreement with the company. Commissioner Tim Boyd was absent.

“We’re really proud that HomeServe’s going to be expanding once again in Hamilton County,” Hamilton County Mayor Jim Coppinger said after the commission’s vote. “They are one of those types of companies that when you recruit them, they start relatively small and they grow.”

The tax agreement eliminates 100 percent of new property taxes generated by the company’s planned 46,000-square-foot facility in the first year of the agreement. That drops to 75 percent in the second year and 60 percent in the third year. Property tax payments level out at 50 percent for the last two years of the tax agreement.

In all, that means Hamilton County will excuse $90,698 of HomeServe’s property taxes over the agreement period.

However, HomeServe will still pay the entire amount of property taxes owed to Hamilton County Schools during the PILOT agreement, which amounts to $131,789, according to the agreement. The company also will pay $66,521 in economic development fees, which Hamilton County and Chattanooga will split.

In return for the tax break, HomeServe promises to add 192 more people to its staff of more than 300 employees.

Last week, Charles Wood, vice president of economic development for the Chattanooga Area Chamber of Commerce, told Hamilton County commissioners most of the new jobs will require only a high school degree but pay an average of $17 an hour, or more than $35,000 a year. About 60 of the jobs, which include back office and management positions, boost the overall salary average of the 192 jobs to $39,250.

“If you think about folks who are working at some of the call centers like Convergys, that might be at a lower wage or getting experience, this will give people the opportunity to move up the wage ladder, if you will,” Wood said.

Females comprise 60 percent of HomeServe’s Chattanooga workforce, and minorities make up 40 percent of the staff, Wood said.

That’s important because Chattanooga has been successful bringing in manufacturing jobs, but men mostly staff those kinds of positions. Women tend to fill a larger proportion of financial and back office positions, Wood said.

HomeServe estimates the expansion will create $9.4 million in employee wages and benefits.

On Tuesday, the Chattanooga City Council approved a similar agreement with HomeServe.

Before giving its approval, the council amended the agreement to stipulate HomeServe would continue its Chattanooga operations for three years beyond the five-year PILOT agreement period. The amended tax agreement also includes stronger “clawback” language indicating the local governments will take action if the company does not deliver on its promises.

Several council members credited Accountability for Taxpayers Money, a public policy advocacy group, with helping them push for workable changes to the agreement.

“You all are to be applauded because all the research you do is not only immense, but it is super beneficial to helping us make decisions,” Councilman Darrin Ledford said.

The city will forego $150,382 of HomeServe’s new property taxes during the tax agreement.

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