Coca-Cola Bottling Company United is another step closer to building its $62 million distribution center in Chattanooga after the city's industrial development board approved property tax breaks for the planned expansion.

Under the resolution adopted Tuesday, the Coke bottling plant -- the oldest in the world -- will lease the Olan Mills property from the industrial development board, which is a city agency. This allows for a PILOT (payment in lieu of taxes) agreement to be offered the company, which will pay only a portion of the city and county taxes it would otherwise pay if it owned the property.

PILOT agreements are a common tactic of local and state governments in Tennessee to woo businesses by reducing their property tax bills while a company builds up its business. The property is owned by local development authorities like the Chattanooga Industrial Development Board and leased back to the business to allow the private owners to avoid or limit the property taxes paid while the lease is in effect.

"The thinking is if they did this in another community, we wouldn't be getting those property taxes anyway," said J.Ed Marston, vice president of marketing and communications at the Chattanooga Area Chamber of Commerce.

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