The Oak Ridge Observer

· $3.5 billion project budget complete, including spending to date but excluding financing costs and financial assurance

· Initial machine design drawings released, allowing strategic suppliers to build first AC100 centrifuges

· Component production begins at Oak Ridge, Tenn.; substantial plant construction continues at Piketon, Ohio

BETHESDA, Md. – USEC Inc. (NYSE:USU) has completed its review of the cost and schedule for the American Centrifuge Plant and affirmed its previously disclosed estimate of completing the project at $3.5 billion, which includes amounts spent to date but excludes financing costs and financial assurance.

Based on the maturity of our centrifuge and plant design, USEC has undergone a rigorous process over the past several months to develop a comprehensive budget. The budget reflects a bottom-up, roll-up of detailed work-breakdown structure activities and reflects extensive input from our suppliers.

We refer to our production centrifuge design as the AC100 series, a design that reflects improvements learned during individual machine testing and subsequent integrated testing. Each AC100 series centrifuge machine is designed to produce about 350 SWU per year, which is substantially greater than any other commercially deployed centrifuge. The initial AC100 machine design is final, and all drawings have been released to our strategic suppliers to begin manufacturing components.

The strategic suppliers have begun manufacturing parts for the 40 to 50 AC100 machines that will be installed in the AC100 Lead Cascade in Piketon, Ohio. This cascade is expected to be operational by the end of the first quarter of 2009. This cascade of AC100 machines is intended to provide additional data on equipment operation and reliability and identify opportunities to further optimize the machine and cascade design. In addition, improved AC100 components and design features will be incrementally introduced into the current cascade during the remainder of 2008.

"In the first half of 2008, we've made tremendous progress in several areas. The current Lead Cascade provided invaluable data that has been integrated into the design of the AC100. We completed the initial design and our strategic suppliers will be building the centrifuge components for the cascade of AC100 machines over the next several months," said John K. Welch, USEC president and chief executive officer.

"We have finalized a project budget and project control process that provides management with the tools we need to closely monitor and control costs in all phases of the plant build out. We have continued to execute contracts with our suppliers that narrow the cost risk of the project. And we have applied for a loan guarantee from the Department of Energy for financing needed to complete the plant," he said.

"We are entering an exciting phase of the project as we work with industry-leading suppliers to build the first AC100 machines and prepare for high-volume manufacturing," Welch said. "And we continue to see opportunity for improving the productivity of our centrifuge technology during the build-out of the American Centrifuge Plant."

We have been operating the Lead Cascade integrated testing program using prototype machines since August 2007. These machines have demonstrated the ability of the cascade to generate product assays in a range useable by commercial nuclear power plants. During the past year, we obtained data on machine-to-machine interactions, verified cascade performance models under a variety of operating conditions, and obtained operating experience for our plant operators and technicians.

The centrifuge machines involved in the current Lead Cascade integrated testing program have operated for over 100,000 total machine hours, providing data on equipment reliability and identifying opportunities to further optimize the machine and cascade design. These prototype machines confirmed centrifuge design and performance targets while verifying the predictions of our analytical performance models.

Over the past 12 months, we strenuously tested the centrifuge machines in operating conditions unlikely to be seen in normal plant operations, and in some cases we encountered issues that we systematically evaluated and addressed. We took additional time for this evaluation, which diverted resources from our value engineering efforts. Resolution of these issues gives us additional confidence in the robust nature of the technology, the deterministic approach we have taken to assure reliability and the potential for future machine performance improvements. The deterministic approach focuses on identifying failure modes and designing the components and systems with safety margins exceeding expected stresses during operations. The months of Lead Cascade operation have also given our employees experience in operating a cascade of machines that has refined operating and maintenance procedures.

Work continues on the design for the value-engineered AC100 machine, which is expected to be completed in March 2009. The value-engineered AC100 machine is the machine we expect to deploy in the commercial plant.

In addition to operating the current Lead Cascade and finalizing the initial design of the AC100, a major focus for our American Centrifuge team has been re-establishing the highly specialized U.S. manufacturing base needed to build the AC100. This high-tech manufacturing base has been established throughout the United States. For example, we have significantly refurbished a facility we purchased in Oak Ridge, Tenn. and renamed it the American Centrifuge Technology and Manufacturing Center. We made substantial capital improvements to the site during the second quarter as we installed new production machining equipment, robotics, and computer controls and testing systems to support the ramp-up to manufacturing centrifuge components. We have contracted with a subsidiary of Babcock and Wilcox Co. to manufacture upper suspension assemblies, lower suspension assemblies, cap assemblies and column parts at this facility, as well as assembling rotors and procuring unclassified metal parts.

Another key component for the AC100 is its carbon-fiber rotor tubes. A subsidiary of Alliant Techsystems Inc., or ATK, is expanding its facilities at the Allegany Ballistics Laboratory in Rocket Center, W. Va., to produce the approximately 40-foot-tall rotor tubes for the centrifuges. Separately, Major Tool & Machine, Inc. is significantly expanding facilities at its Indianapolis, Ind., plant to fabricate the steel casings for the machines.

During the second quarter, we awarded a contract to Teledyne Brown Engineering, Inc. to manufacture service modules for the ACP. These steel framed structures hold pipe headers and valves, control and instrument cabling, electrical distribution cables and other controls. Each service module can serve up to 20 centrifuges. Teledyne Brown expanded a manufacturing facility in Huntsville, Ala., to accommodate this work.

As noted earlier, these suppliers will be manufacturing the various components of the AC100 machines that will be assembled later this year into a cascade of 40 to 50 machines, which we expect will be operational by the end of the first quarter of 2009. The manufacturing infrastructure that we are putting into place to deploy the initial plant capacity will be available to support any future expansion beyond 3.8 million SWU. Because an expansion would not require creating this manufacturing infrastructure or another demonstration of the technology, the cost of any expansion is anticipated to be less than the initial project.

Following receipt of a construction and operating license from the NRC in April 2007, we began renovating and building the ACP in Piketon, Ohio. We continue to build out the ACP balance of plant. Contractors completed preparing one production building floor for machine mounts and are preparing to begin work in the second production building. We also made substantial progress on a new boiler building. Other work includes demolition within the feed and withdrawal facility in advance of work to install new equipment. This facility will house equipment where uranium hexafluoride is heated to a gaseous state before introduction into the centrifuge cascades, and the subsequent withdrawal of the low enriched uranium product.

We have completed a thorough, bottom-up review of the cost to build the ACP. In line with our expectations communicated earlier this year, we have established a project budget of $3.5 billion. This budget includes expenditures to date but does not include financing costs or financial assurance.

Based on the maturity of the AC100 and plant design, we have undergone a rigorous process to develop this budget over the past several months. The budget reflects a bottom-up, roll-up of detailed work-breakdown structure activities and reflects extensive input from our suppliers. We have built into the budget a management reserve and a structured process to manage any potential changes in scope, budget or schedule.

While our project budget includes some degree of embedded contingency with respect to labor and materials cost assumptions, we remain subject to cost escalation risk. We estimate that each 1 percent change in labor cost from our budget would change the project's cost by approximately $10 million and each 1 percent change in commodity cost would change the project's cost by approximately $8 million. If project management determines that costs will exceed the budget (including the built-in management reserve), and such costs cannot otherwise be offset or financed, we may elect to deploy fewer centrifuge machines in the plant to mitigate such potential cost growth. The modular nature of the plant structure and its construction permit normal operation even if the scale is reduced from the current planned size.

We have been pursuing a phased approach to contracting, with work generally divided into three stages: demonstration, initial AC100 machine manufacturing, and the balance of commercial plant construction and final machine production. Currently, we are working with our strategic suppliers primarily under cost-reimbursement agreements. As we proceed with the project, we intend for contracts with suppliers to transition from a cost-reimbursement model to a fixed-price or incentive-based model, as appropriate.

We also reviewed our schedule and have identified a schedule going forward that allows for some additional time to reduce risks in design and demonstration, manufacturing and construction, and startup and operations, while still keeping us within our earlier target of having the ACP completed in 2012. We anticipate receiving the first AC100 machines from our manufacturers in the fourth quarter of 2008 and beginning AC100 Lead Cascade operation by the end of the first quarter of 2009. These operations will continue through 2009 and these machines may be integrated into a commercial cascade.

We are working to re-establish a manufacturing infrastructure in the United States for building these highly sophisticated machines. Our suppliers have been focused on building the facilities necessary to be in position to build several hundred AC100 machines per month. Progress on building the production facilities is on track to support the production schedules for both the initial AC100 and value-engineered AC100 machines. Finally, in terms of plant startup and operations, we anticipate beginning commercial operations at the end of the first quarter of 2010, and reaching 1 million SWU capacity in the first quarter of 2011 and the full 3.8 million SWU capacity at the end of 2012.

Our testing program continues to demonstrate the opportunity for machine productivity beyond 350 SWU per year. We anticipate being able to assemble and install machines with greater SWU capacity at a discrete point in the deployment of centrifuges for our initial two production buildings, which have space for approximately 11,500 centrifuges.

We must still raise the remainder of the capital needed to build the ACP and this has been and will continue to be a focus of management. Current financial market conditions have significantly reduced the availability of public market financing for high-yield issuers and large capital projects such as the American Centrifuge. We currently view the DOE loan guarantee program as the path for obtaining debt financing to complete the American Centrifuge project.

The loan guarantee program was created by the Energy Policy Act of 2005 and in December 2007, federal legislation authorized funding levels of up to $38.5 billion, including up to $2 billion for advanced facilities for the front end of the nuclear fuel cycle, which includes uranium enrichment. DOE released its solicitation for the loan guarantee program on June 30 and we applied in July. We believe that our project is ideally suited for the loan guarantee program and are actively seeking a prompt review of our application and a commitment from DOE.

However, USEC may not be selected to move forward in the program and it could take an extended period for the loan guarantee and funding to be finalized. Accordingly, on a parallel path, we continue to evaluate alternative sources of capital. If we are not able to obtain timely action from DOE or obtain an alternate capital commitment, we will be forced to slow spending on the project, which will result in potentially significant schedule delays and increased costs, or take other actions to ensure that we have adequate liquidity for our ongoing operations.

Our marketing and sales staff has engaged in discussions with our customers to sell the output of the ACP. By waiting until now to sell this production, we believe we are in a better position to structure proposals for long-term sales to customers in ways that will provide stronger support for our financing and earn an appropriate return on our capital. We have received accepted offers from customers and are in the process of negotiating and signing long-term contracts for commitments totaling approximately $900 million for deliveries beginning in 2013. We will continue to meet with customers to continue the process of selling ACP output. Sales contracts for this initial output represent a strategic commitment by customers to ensure a reliable, U.S.-based source of nuclear fuel that will be available for decades to come.

Our website now includes a virtual tour of the American Centrifuge Demonstration Facility. The tour provides a step-by-step guide to current operations at the facility and a preview of the future site activities for the American Centrifuge Plant. You may view the virtual tour at www.usec.com by clicking on the American Centrifuge tab.

USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel for commercial nuclear power plants.

Press Release, unchanged: Tennessee House of Representatives candidate, Alex Moseley has introduced “MPACT,” the “Moseley Program for Assisting Communities in Tennessee.” MPACT would return funds from the state’s nursing-home bed tax to the communities from which the funds were collected in order to assist local senior services.

Where did this tax money come from? Nearly two decades ago, the legislature passed a tax on qualifying beds in assisted living facilities. The tax, which currently sits at $2225 per bed per year is only collected on beds designated for use by senior citizens. MPACT would return this amount of money to Tennessee’s communities for senior services.

Oak Ridge resident Dave Drum said, “As the child of a recent nursing home patient, I was appalled when I learned of a tax placed on nursing home beds. This is a specific tax placed on the weakest and least able to pay of our society, and needs immediate attention by state legislators."

How much money is collected from Tennessee’s senior citizens and their families? In the 2008-2009 fiscal year, the estimated collections are approximately $99.7 million across the state. Fiscal year 2007-2008 has not yet ended; how much has been collected so far? In Anderson County, the funds collected during this fiscal year from the 5 assisted living facilities were already $1,351,777.93 as of August 7, 2008.

How is this money collected and used currently? It is collected by the health department. It goes to the general fund. MPACT would return funds to the communities where the taxes were collected.

Moseley said, “MPACT would ease the economic strain on those communities who are having difficulty funding senior programs. Exactly which senior programs to fund would be at the discretion of the local government.”

Moseley said, “This money is paid on behalf of senior citizens and their families. It’s their money. It should be used to provide services for seniors.”

When asked about the state budget, Moseley said, “This is approximately one-third of one percent of the state budget. If we have our priorities right and avoid wasteful spending, the Tennessee legislature should be able to agree on the need for MPACT.”

Moseley said, “This is not just about an election; it is about affecting good policy change.”

Moseley said, “I value fairness and awareness. Taxpayers should be aware that they are paying these taxes. Fairness dictates that the money should be spent to the benefit of those same taxpayers.”

2008 Oak Ridge Lady Wildcats schedule

Aug. 26 at Central

Aug. 29-31 Katie Hunter Tournament at Oak Ridge

Aug. 29 Oak Ridge vs. Darlington (Ga.) Academy

Aug. 30 Oak Ridge vs. Beech

Aug. 30 Oak Ridge vs. Hendersonville

Aug. 31 Oak Ridge vs. Dobyns-Bennett

Sept. 4 Powell at Oak Ridge

Sept. 6 Greeneville at Oak Ridge

Sept. 9 Kingston at Oak Ridge

Sept. 12-14 Battle For The Blues in Memphis

Oak Ridge vs. Notre Dame

Oak Ridge vs. BGA

Oak Ridge vs. Collierville

Sept. 17 Science Hill at Oak Ridge

Sept. 23 Oak Ridge at West

Sept. 26 Clinton at Oak Ridge

Sept. 30 Oak Ridge at Cookeville

Oct. 2 Oak Ridge at Karns

Oct. 4 GPS at Oak Ridge

Oct. 7 Oak Ridge at Halls

Oct. 9 Farragut at Oak Ridge

Enjoy Liz & Tim, Doll Sale and Dollhouse Show
Sept. 6 at Children’s Museum

Dolls and miniatures will fill the gym of the Children’s Museum of Oak Ridge from 10 a.m.-4 p.m. Saturday, Sept. 6, when the Three Blind Mice Dollhouse and Miniature Show makes its first appearance in Oak Ridge

More than 80 collectible dolls will be sold to benefit the Children’s Museum during the show. Local folk duo Liz and Tim will present a special musical performance at 2 p.m. in Imagination Gallery, entertaining with Americana, folk, and traditional Appalachian music.

Liz McGeachy and Tim Marema will bring a selection of children’s songs especially for the show, encouraging audience participation, particularly with their rendition of “There Was an Old Woman Who Swallowed a Fly.”

The Three Blind Mice Show will bring dealers and artisans from five states with a range of miniatures and dollhouses. The miniature organization helped the Children’s Museum price the collectible dolls that will be for sale, all of them donated to the museum’s collection to be used to benefit the museum.

Dealers from five states will bring miniatures, dolls, dollhouses, handcrafted and custom-made dollhouse accessories to the show. Miniature enthusiasts will find everything from landscaping to lighting in miniature scale at the show. Exhibits offering ideas on how to make miniatures for doll houses will also be featured, according to Linda Frye, of Cincinnati, who is organizing the event.

A children’s table, offering items for those 12 and under, will have grab bags and items priced at 50 cents and lower. The first 100 guests will receive a free gift. Those interested in joining a miniature club will find more information about that available at the show.

Admission to the show is $5 for adults and $2 for children 5 to 15. Museum members will receive free admission. Enter the museum at the gymnasium doors in the middle of the building. For more information, see the show’s web site at www.3blindmiceshow.com.

History speaks through the Museum’s new signature exhibition, Voices of the Land: The People of East Tennessee. The $3 million, 8,500 square-foot exhibition tells the story of more than three centuries of life in the region and is the only exhibition to encompass the entire history of East Tennessee.

The museum features more than 500 important historical artifacts, and includes more than

350 stories of individual East Tennesseans, as well as 25 media programs, including touch screen

interactives and three feature videos. The museum is located in the East Tennessee History Center on the corner of Clinch Avenue and Gay Street in Knoxville – just across the street from the Historic Tennessee Theatre.

The Y-12 National Security Complex is the presenting sponsor of the Oak Ridge video diary that tells the story of the building of the Secret City and the Manhattan Project using still images and historic footage. Y-12 historian D. Ray Smith, who serves as a member of the East Tennessee Historical Society’s board of directors, invites everyone associated with Oak Ridge to take advantage of the Grand Opening events set for August 23 – 24, 2008 at the History Center in downtown Knoxville – See the related schedule for details.

The Voices of the Land exhibition has been designated as a “We the People” project from the National Endowment for the Humanities for its role in incorporating local history into the national story. Funding has been provided by a $2.5 million grant appropriation from the State of Tennessee legislature, federal grants, and private donations.

For more information on the exhibition, museum hours and grand opening events, call 865-215-8824 or visit the website at www.EastTNHistory.org

About the East Tennessee History Center and the East Tennessee Historical Society

For nearly 170 years, the East Tennessee Historical Society has been helping us hold on to our unique heritage -recording the events, collecting the artifacts, and saving the stories that comprise the history we all share. The historical society pursues its educational mission through publications, lectures, conferences, school programs, exhibits, and heritage programs such as the popular First Families of Tennessee and the new Civil War Families of Tennessee.

The East Tennessee History Center houses the staff and programs of the East Tennessee Historical Society, the Museum of East Tennessee History, the Calvin M. McClung Collection and the Knox County Archives.

The Grand Opening of the East Tennessee Historical Society’s (ETHS) new signature exhibition, Voices of the Land: The People of East Tennessee, will be held August 22-24, 2008 with fun and entertainment provided by area historical societies, historic attractions, and associations featuring exhibits, activities, games, and re-enactments. Grand Opening celebration activities include:

Walk through the pages of Knoxville’s past with Voices of the Land HISTORY HUNT, an interactive, self-guided walking tour of Downtown Knoxville. You’ll discover prominent Knoxville landmarks, famous Tennesseans, popular legends, and little known facts along the way. A fantastic companion to the Museum of East Tennessee History, this guide brings history alive on the streets of Knoxville. FREE guide books will be available at the front desk of the East Tennessee History Center, 601 S. Gay Street.

Official Ribbon Cutting Ceremony at the East Tennessee History Center, 601 S. Gay St.

Ribbon-cutting ceremony to be held by ETHS and Knox County officials. Following the ribbon cutting, ETHS members are invited to tour the exhibit until 7 p.m.

o Living History Timeline and Re-enactors—representing periods from the Cherokee to World War II

o Presentations and exhibits by authors and representatives of various historic sites and historical/genealogical societies

o Live craftsmen demonstrations including a blacksmith, spinning & weaving, and berry basket making.

o Saturday 10 a.m. – 6p.m. Performers will include David West, Jim Clayton, Bowman Family (descendants and relatives of the famous early country music Bowman family), Guy and Candie Carawan, members of the Cumberland Trail, Paul Brewster, the McCarrells (Tom and Tammy; Tom was with the early Roane Ramblers).

o Sunday noon – 5 p.m. Performers will include bluegrass/country gospel acts featuring David West, Mavis Hughes, Gammon Horton & Reynolds Gospel Trio

· Saturday 11 a.m. – 3 p.m. Free trolleys to downtown historic sites---Blount Mansion, James White Fort, Mabry Hazen, First Presbyterian Church Cemetery

· Saturday & Sunday, 2-4 p.m. Meet historic characters buried in First Presbyterian Church Cemetery, including James White, Samuel Carrick, William Blount and wife Mary Blount, Mrs. Margaret Ramsey, Abner Baker. Followed from 3-4 p.m. by tours of this historic graveyard, led by author and local historian Jack Neely.

· Sunday, 12 – 5 p.m. Storytelling stage: Among performers are Mark & Sherry Finchum and Jim Claborn as Davy Crockett. At 3 p.m. kids will celebrate Davy’s birthday with cake and a party.

· Saturday, 7 p.m., Women’s Equality Day Celebration Meet the Quakers, Abolitionists, Elizabeth Cady Stanton, Lucretia Mott, Frederick Douglass and others who made the first public call for women’s right to vote during a reenactment of the Seneca Falls Convention of 1848. After the re-enactment the celebration continues with an 1848 Ball in the Great Hall of the East Tennessee History Center with live music and refreshments. Tickets to the reenactment and the ball are $15 each or $25 for both. Call 546-7770 for reservations.

o Saturday, 11 am. – 6 p.m. Open House at Tennessee Theatre and clips of historic footage by the Tennessee Archive of Moving Image and Sound:

o 11 a.m., Festival of Children’s Classics - Features vintage shorts and cartoons. Includes films of Shirley Temple, Betty Boop, Gumby, Abbott and Costello, and many more.

o 12:10 p.m., Your Town in the Movies. Unique films that capture the traditions and industries of East Tennessee hometowns, 1930s-1950s, including Athens, Harriman, Lenoir City, Maryville, Rockwood, and Sweetwaer.

o 12:45 p.m. Viva Knox Vegas! Footage compiled from home movies features clips of downtown Knoxville from the 1920s through the 1960s. Look for UT football games of the 1940s, vintage Dogwood arts clips, and the last Knoxville trolley ride in 1947.

o 2:00 p.m., Tribute to Chet Atkins, featuring Lost Midday Merry-Go-Round footage and live performance by “Chet picker” Larry Oldham. Home movies of Lowell Blanchard and the Merry-Go-Round gang in the early 1940s. Vintage performances by Union County native and guitar greatChet Atkins.

o 3:30 p.m., The Jim Thompson Collection - Personal home movies of renowned local photographer Jim Thompson feature rare, vintage scenes from Knoxville and the great Smoky Mountains National Park in the first years of existence.

o 4:45 p.m., East Tennessee Television History Highlights from Classic Knoxville Television Programs - Classic clips from the popular and long-running television shows aired from Knoxville televisions stations. The program will feature segments from such fondly-remembered shows as 'Jim Clayton Star Time', Bonnie Lou and Buster Show', 'Little Jimmy Hartsook Show', "Wrestling with John Cazana", along with classic commercials.

o 6 p.m., This is Cas Walker! - Our tribute to the legendary Cas Walker features outtakes and bloopers from his long-running television show, an early musical performance by Dolly Parton, some fine local bluegrass music, and rare WBIR-TV news film detailing the political career of Walker.

Opening event sponsors are Knoxville and Holston River Railroad & Knoxville Central Business Improvement District & Knox County Public Library. Media sponsors: WBIR TV, Knoxville News Sentinel, WDVX Radio, Comcast, East Tennessee Public Television, WUOT Radio.

Events are being added daily - for more information, visit the calendar of events at www.EastTNHistory.org.

The Oak Ridge Chamber of Commerce released its 2008 economic report last week, and the numbers for this year show that the Chamber hit its required goals as the city’s primary marketing arm.

But, the bigger news from the meeting seemed to be the concern of the Chamber president regarding Oak Ridge’s retail situation.

Asked at the end of the presentation if he were concerned about the rapid growth of new retail construction at Hardin Valley, Parker Hardy, the Oak Ridge Chamber president, went on a several-minute long discussion of the threat facing the Secret City.

"Yeah, I’m really, really concerned," Hardy said. "We are quickly getting surrounded, and not just by Hardin Valley."

He said that developments in both Lenoir City and the I-75 interchange concern him as well.

"The business community is going to serve Oak Ridge," he said. "And the business community doesn’t care whether those stores are located either inside or outside Oak Ridge."

The Chamber report is in three pieces. To read Parker Hardy's Cover letter, click here. To see the full report, click here. And the referenced exhibits in the report are here.

Oak Ridge City Council members spent most of Saturday, July 19, discussing the city’s future.

Council, after lengthy discussion led by a facilitator, created a draft “common agenda.”

Several Council members indicated in Monday night’s meeting that the “common agenda” was a draft. And that they desired more feedback.

“We need your input,” said Council member Tom Hayes. “We need your help.”

Council members will sit down again to refine the list during a Saturday, August 2, work session.

The decision to create a new list follows the death of the Visioning process, and the ending of the city’s former Strategic Plan – a controversial document that aimed to keep taxes low.

A group of advisors commissioned with exploring options for a new Senior Center has resoundingly said “no” to the Roane State option, and put forth a new one.

David L. McCoy, chairman of the Elder Citizens Advisory Board, recommended to City Council that the city of Oak Ridge purchase a church that’s no longer in use – Trinity United Methodist Church – for approximately $1.2 million and then spend another million dollars on renovating it.

The recommendation, a unanimous vote from the Elder Citizens Advisory Board, was to oppose using the Roane State option and enter into negotiations with Trinity United Methodist Church representatives to purchase the facility for a new Senior Center.

Approximately a dozen or more seniors attended Monday’s Council meeting to show support for a new Senior Center at Trinity United Methodist Church.

One of those who spoke in front of Council was Phil Longhurst. Longhurst said that while seniors enjoy being around young people some of the time, there are also times when they want to be to themselves.

City staff is studying the option, as well as others, and will eventually make a recommendation to City Council.

A recommendation by City Manager James R. O’Connor to support a tax abatement for a potential Holiday Inn Express on South Illinois Avenue led to strong debate during Monday’s City Council meeting.

O’Connor wrote that he supported a 50 percent tax abatement over a 10-year period that will pay for costs associated with public infrastructure for a couple of reasons.

Namely, because it falls within the city’s Commercial Incentive Guidelines that were previously adopted by City Council. And, because it matches the incentive that was given to the Staybridge Suites for a similar project just a couple of years ago. And finally, because “there is a significant return on the investment by the City and the County. There is estimated revenue of $2.2 million that will accrue to the city over that 10-year period. In addition, the county will receive nearly $400,000 over the same period.”

But several Council members let it be known practically before O’Connor was finished making his statement that they had concerns with the tax abatement.

Council member Willie Golden Jr. argued strongest against it, saying, “We need to start addressing things (such as this) on the front end.”

Several Council members felt that local Oak Ridge developer Shailesh Patel should have said on the front end – before the rezoning vote – that he would need a tax abatement.

Patel countered during the meeting and said that in the beginning, just getting the rezoning was the issue.

That rezoning was initially declined, and only narrowly passed following a lengthy six-month “corridor study” by city staff.

“This has been three years,” she said. “First, he changed from a five-story (hotel) to a three-story (hotel). This has been three years of (him) jumping through hoops. Bottom line, we need the business. We need the hotel.”

The Industrial Development Board will consider Patel’s tax abatement and then make a recommendation to City Council. City Council members will have the final say so as to whether Patel will receive the abatement.

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