KNOXVILLE, Tenn. (WOKI / WVLT) – Knox County Mayor Betsy Henderson has vetoed a controversial tax incentive package for a proposed South Knoxville housing development, setting up a potential showdown with the Knox County Commission.
The veto blocks a resolution that would have granted developer DWF John Sevier, LLC a 50 percent property tax abatement for 20 years in exchange for constructing an 80-unit townhome development at 400 W. Governor John Sevier Highway. Under the agreement, half of the units would have been designated as affordable housing.
Henderson announced the decision Tuesday, saying she made the move after hearing concerns from residents in South Knox County.
“I made a promise to the voters of Knox County that I would prioritize their voices in our government and carefully consider each action I take as mayor,” Henderson said. “After much thought and listening to the people of South Knox County, I will veto R-26-8-905.”
The proposal had generated significant debate during recent commission meetings. Supporters argued the development would help address housing affordability by reserving half of the townhomes for households earning between 80 percent and 120 percent of the area’s median income. In return, the developer would receive the long-term tax incentive.
Henderson said she does not believe public funds should be used to support the project.
“I do not believe it’s the role of government to subsidize luxury townhomes that are also used for affordable housing,” Henderson said. “I want the Knox County government to provide value for every taxpayer dollar that is spent, and I do not believe the PILOT for this project is a good use of taxpayer funds.”
The housing project did not initially qualify under Knox County’s tax incentive program, which has traditionally focused on manufacturing and distribution projects that create jobs and generate significant investment. However, county commissioners voted to modify the program’s rules to allow consideration of the housing development.
Despite the mayor’s action, the proposal is not necessarily dead. Under the Knox County Charter, commissioners can override the veto with the support of seven members. The issue is expected to return to the commission for consideration in the coming weeks.
Henderson said she remains committed to working with county leaders on future growth initiatives.
“I thank the commission for their work and understanding and look forward to working together to find solutions that prioritize smart, conservative growth,” she said.
The veto marks one of the first major policy decisions of Henderson’s administration and highlights ongoing debates in Knox County over housing affordability, growth, and the use of taxpayer-funded incentives to encourage residential development.
