Commissioners approve downtown development tax incentive plan
Hamilton County commissioners unanimously voted Wednesday to approve a 10-year tax incentive program geared at luring developers downtown to undertake "workforce housing" projects.
The resolution, which was passed after a half-hour of discussion and questioning by commission members, was tweaked to give the group the opportunity to discuss projects proposed under the plan publicly before giving them final approval. Still, not all commissioners were initially convinced that moving forward with the plan, proposed last week by River City Company, was the best idea for the future of the city.
Commissioner Tim Boyd said he had not been satisfied with the amount of discussion regarding the plan that had taken place prior to Tuesday's vote. Boyd asked River City CEO Kim White and attorney Alfred Smith several questions and expressed several concerns with potential outcomes the proposal could have over the next decade.
"I'm about to vote on a resolution that affects the tax revenue, what we are dealing with on a daily basis, for the next 18 years," Boyd said, citing provisions that, in certain cases, could extend portions of the PILOT agreement for developers longer than the 10 years stated. "That's four or five commissions. The guy that's sitting here 10 years from now, he's going to read this and he's not going to know the full intent of it—he's just going to know that he's not going to get any taxes off it … We're making a very, very critical decision here."
Boyd, who represents District 8, which surrounds areas of East Ridge, also expressed concerns for why the plan only applied to projects taking place in certain areas of downtown.
"I want to understand as much as I can, so I can tell constituents in my district why I voted to give away taxes for development in downtown Chattanooga," he said. "Why not Brainerd? Why not over at the Memorial Hospital area? What defines the box of what we're doing here? Why is River City the gatekeeper of this program? I mean, there are so many 'whys' I'm just not comfortable with it."
White responded to Boyd's question and said the group had sought to implement the tax incentive plan because of an apparent need for workforce housing to support middle- and low-income workers.
"We would not do anything to hurt the city," she said. "What our role is, is to really act as your partner and look at the gaps. And where are the gaps? The gaps right now are in affordable housing downtown. We need rental housing downtown. And we work with developers all the time who want to come in, and it's still difficult to do apartments … We are attracting more and more young people to this city, and what we hear is there's no place for them to live downtown."
White promised the group that River City would ensure that projects under the plan would add to the overall value of the city.
Commissioner Joe Graham, who requested last week the changes to the plan that provided the commission with the opportunity to vet proposed development projects publicly, expressed thanks to River City for tweaking the proposal. Graham, who represents District 6, which includes areas that would be eligible for projects under the plan, said he thought the incentives would eventually allow projects to take place that built upon previous gains made downtown.
"As an economic tool, this PILOT program is not going to cost us anything," he said. "We're going to receive the same amount of revenue now that we would have received, and the schools will actually get an increase as the properties increase yearly … These areas we're discussing first and foremost is the area River City covers, and as a city and a county, we have invested millions and millions in our Riverfront and our downtown area."
Commissioners approved the plan in a 9-0 vote.
