published Tuesday, August 19th, 2014

TIF for Helen Burns Sharp, zero for Black Creek developers

We have a suggestion for a new Tax Increment Financing, or TIF, agreement: the Helen Burns Sharp legal fees fund.

After all, if we taxpayers can afford a $9 million agreement to pay for a road to the Black Creek Mountain project where houses would be built on Aetna Mountain along the last gorgeous mountain brow here left untouched by rich pretentiousness, surely we can get behind some reimbursement for Sharp, an ordinary citizen who has spent more than $50,000 of her own retirement savings to stop the wild squander of our money.

Never mind that Black Creek's developers have and will receive plenty of money for the homes they may sell on more than 1,200 acres of undeveloped land when that road (normally a cost of doing business) is complete. The developers -- including a giant New York hedge fund -- instead will be reimbursed by us for that road. These developers managed this by telling elected leaders and the local Industrial Development Board that the resulting highbrow property taxes would benefit the city. In fact, some of the property this road will open up isn't even in Hamilton County, much less in the city.

This brow-home developer welfare was first approved in 2012 by Chattanooga, Hamilton County and the local Industrial Development Board. But last month, Chancellor Frank Brown, in hearing the lawsuit brought by Sharp, ruled the TIF agreement invalid because of violations of open meetings rules, conflicts of interest and questions over whether the residential project itself complies with state law. He also issued a stinging rebuke to city and county officials for their secrecy and conflicts of interest involving the government role in the $500 million development.

The developers have included Jimmy Chapin, Gary Chazen, Doug Stein and Brant Enderle. (One of Doug Stein's companies has laid much of the asphalt in Chattanooga and Hamilton County.)

Among other questions raised by the case was the validity of the road cost estimate. Leonard Nixon, who owns the property adjacent to the proposed road, testified that he had seen a plan by previous developer Chapin to build the road for $2 million. "The $9 million should be investigated," Nixon said. "That road is going to cost less than $2 million. What they're asking for is operational capital to do the whole development."

Also, in approving the project, public officials relied on a now-discredited letter by George Masterson, an attorney for Nashville law firm Bass, Berry & Sims, indicating that a $9 million road to the development met the legal requirements to secure tax increment financing. But Masterson wrote that letter while he was being paid $50,000 by the developers, which Brown found to be a conflict of interest. Brown encouraged the parties to solicit the opinion of the Tennessee Attorney General before starting the entire process over again.

Well, forget that. On Friday, the city's Industrial Development Board reapproved the controversial $9 million TIF in a 4-1 vote.

Adding insult to injury, the resolution Friday was presented by the industrial board's attorney, Mike McMahan -- the same former city attorney who admittedly violated the state's open records law when he approved the TIF in 2012 without board approval or a public hearing. Current City Attorney Wade Hinton acknowledged that McMahan's participation would likely be a conflict of interest in a courtroom setting (since he was a witness in the lawsuit that now is under appeal), but argued such rules don't apply during a board meeting.

Really? Who appoints this board? The Chattanooga City Council. And who funds the council? Oh, yeah -- taxpayers. The same ones reimbursing private developers for a road to a posh brow community.

It's tempting to say these guys never learn. But the real folks who don't seem to learn is us -- the taxpayers with the thin wallets.

So let's hear the chant: TIF for Sharp! TIF for Sharp!

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gypsylady said...

I've donated. It sucks that we pay officials to take care of the taxpayers and then Helen is financing the only real effort I've seen to made to "mind the store." Elected officials, whether they identify as conservative or liberal - they don't have the courage this woman has.

August 19, 2014 at 9:27 a.m.
aae1049 said...

Taxpayer funds from the TIF bond issue were reported by the developers Mike Mallen etc to have spent $999,000 of the $9 million approved for the Tiffers to spend. According to the Black Creek filing to the bond board, %240,000 of the $999,000 was spent on Miller and Martin attorneys hired by the developers as an allowable charge. We the taxpayers are being robbed by Miller and Martin attorney fees. We have to pay the developer's share of legal fees, but not Helen Burns Sharp's when the law is violated. The city and county should pay Helen's legal fees for violating the open meeting laws. These Developers are nothing more than corporate welfare recipients, corporate cronies.

August 19, 2014 at 11:50 a.m.
zulalily said...

Please, people, let's stop this! It is not too late to rally around Miss Sharp and stop this obvious abuse of power. I have written to my city council rep., Ms. Berz, and she says it is a frustrating situation, but she apparently is not willing to go up against Miller and Martin--who, by the way, contributed to Mayor Berke's campaign. The Mayor has not answered my request that he get involved in stopping this. I did get a smart-aleck e-mail from Wade Hinton and he just more or less said to come to the industrial board meetings, but when I requested the time and place, he did not answer. After all of the hard work and money that Ms. Sharp put into this, are we just going to let these people steal $9 million of taxpayer money?

August 19, 2014 at 2:06 p.m.
aae1049 said...

zulalily, we held 2 fund raisers for Ms. Sharp and it has not made a dent in the $50 plus she had to spend to find the TIF was illegal. Councilwoman Carol Berz accepts lots of campaign donations from Perimeter Properties, LLC whose principals are the TIFFERS Mike Mallen and Gary Chazem, so did Manny Rico and others that voted for the TIF.

The point is, NO ONE is watching the taxpayers back but Helen Sharp, Chancellor Brown and a few others. Our elected officials are owned by the Tiffers. A judge Voided the TIF, yet the IDB and mayor reinstated. Mayor also reappointed the TIFFERS to city boards, Doug Stein is Chairman of the Stormater Board for Chattanooga so his construction can regularly pollute Black Creek with no fines, and that damn law firm of Mike Mallen's Miller and Martin has received $240,000 in TIF funds, and for what? filling our forms. The TIF road they applied for does not cost $9 million. I heard testimony by Ric Ebersol at the IDB. These Tiffers are robbing the public, and we cannot stop them, because they run city hall.

August 19, 2014 at 2:58 p.m.
zulalily said...

Thanks for letting me know. All I knew was what I read in the paper. I still wish someone in the government was held accountable!

August 19, 2014 at 3:46 p.m.
gypsylady said...

We can't stop them if we give up. We don't need to give up. We just need to work smarter and harder and longer.

August 19, 2014 at 8:35 p.m.
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