published Thursday, February 6th, 2014

Harr: Tubman property suited for major employer

Ron Harr
  • photo
    The former Harriet Tubman Homes site in East Chattanooga, seen here from Missionary Ridge, was built in 1953.
    Photo by John Rawlston.
    enlarge photo

Utilizing the old Tubman public housing site to spur job creation is the highest and best use of the property both for the surrounding neighborhood and the community as a whole.

Early in Mayor Andy Berke's administration, I spoke with him about how our community is losing major economic development opportunities because we do not have industrial parks where new employers can locate. In response, Mayor Berke asked the Chamber to compile a list of brownfields that might be returned to productive use.

The old Tubman site was at the top of our list for these reasons:

• The site consists of 25 acres that are flat enough to accommodate a major employer.

• The old Tubman site is already served with the industrial-grade utilities such as electric, water, sewer, etc. This saves tax-payers tens of millions of dollars in preparing the site.

• The old Tubman site has existing railroad access.

• The site can be re-developed quickly with no environmental remediation.

Put simply, the old Tubman site is one of the very few remaining parcels that can be converted to industrial use at a low cost to the taxpayer, and we believe the investment will result in substantial community benefit in the near future.

By attracting a major employer to the site, hundreds of new job holders would earn millions of dollars in payroll, pay local taxes, and spend their earnings at local businesses. As a result, the property would serve as a catalyst for generating new revenue both for individual job-holders and businesses but also for the community as a whole.

In contrast, other uses of the property will create new costs for the community without generating any new revenue. The Times Free Press reports the Chattanooga Housing Authority has been spending $300,000 a year for security and other costs associated with keeping the property boarded up. Imagine how much it would cost the city to provide police, fire protection and other services for a mega-sized affordable housing project.

To be clear, we strongly support the strategic development of affordable housing, but years ago, the Chattanooga Housing Authority (CHA) determined it was more cost effective to abandon the Tubman site than to keep operating it in the old way.

CHA's new approach does not isolate affordable housing into islands of poverty as happened with the original Tubman development and other old-style public housing projects. We also applaud the many programs lead by CHA and others to encourage the private development of affordable housing that is integrated into the local economy.

In addition, it is important to remember that affordable housing does not mean cheap housing. By linking Chattanooga residents with quality jobs, the Chattanooga Housing Authority can help end the cycle of poverty by boosting the number of families who can afford housing without a subsidy.

In fact, family-wage jobs are the best solution for many economic and social challenges. The Chamber stands ready to work with Mayor Berke along with local and state training partners to prepare local people for the new jobs that would be created by a new industrial park.

With all this in mind, we urge the CHA to see the true cost of simply accepting the highest bidder. The Housing Authority should work with Mayor Berke to return the old Tubman site to productive use that will create new jobs and new economic growth for our city. Time is precious. The old Tubman site has been a drain on CHA's resources for a number of years while our community has lost opportunities to attract a major employer to the site.

Now is the time to turn a blighted and abandoned property into a major asset for our community.

Ron Harr is president and CEO of the Chattanooga Chamber of Commerce.

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nucanuck said...

While major economic development could happen on the Tubman site, the reality is that the US and the world are awash in over-capacity of almost everything, including people, at the very time that resources are becoming either less available or more expensive to extract. Reducing consumption needs to become a priority for the whole developed world. New industry is every city's dream, but not a realistic probability in this economic environment.

The best redevelopment ideas going forward are likely to be projects that produce for local/regional consumption, replacing goods imported from afar. The single most critical product need for every population center is food security. The average food item Chattanoogans eat travels more than a thousand miles. Developing smart green house food production nodes on urban brown fields can produce local jobs, healthy food, and protect against food interruptions from far away places. Amazing amounts of fresh fruits and vegetables can be grown in relatively small areas. Dozens of businesses and hundreds of jobs are just waiting to happen.

Food resilience has become an important theme for big cities all over the world. Check out Capitol Growth in London as an example. The Mayor of London got behind that project and they have done amazing things. Our strung out just-in-time food supply lines are a major vulnerability that every progressive city should be concerned about at a time when economic fragility seems to be increasing rapidly. The average super market has a three day supply of food if the eighteen wheelers should stop rolling. Chattanooga is heavily dependent on California for many basic foods. Should California's drought continue as the West continues to heat up, every city in the US would be in a food bind. Much of California's water comes from Lake Meade which is approaching crisis low water levels. The food clock is ticking down in California.

At a time when individual's needs are crowding out wants in our economic daily lives, a wholesome local food supply can become a top business idea.

Sometimes the best ideas are the simplest and most obvious, if only we could see them.

February 6, 2014 at 2:29 a.m.
aae1049 said...

Oh my Gosh, the Chamber of Commerce, masters of corporate welfare telling us what we need based upon their cronyism, tax exempt programs for the richest demographics.

Mr. Harr the taxpayer are sick to death of giving your "corporate union" $1.1 million annually of our local tax dollars. The Chamber of Commerce has members let them pay dues adequate to fund the Chamber of Commerce functions in the City. After all, at least 53 of your members have reduced property taxes under Payments in Lieu of Tax incentive programs the Chamber issues prior approval for, prior to any public comment. These PILOTs are only available to really big business, and have NO clawback provision to protect the taxpayers if your corporate members do not deliver.

Sadly, the Chamber of Commerce property tax abatements are only available to big business, and makes the little guys, retail, and citizens pay greedy industry share of local taxes, and the corporate welfare club won't even fund their own club called, the Chattanooga Area Chamber of Commerce.

Locals cannot start a business with a pilot because your Chamber of Commerce has the deal rigged for big industry corporate welfare, you must have 50 jobs creation right out of the gate. The Chamber has just ruled out small to medium business. Then, the Chamber does not make industry getting the tax exemption guarantee job creation.

We are sick of giving your organization $1.1 million dollars annually of local tax dollars. At least, the local unions pay their own way.

Property Tax Abatement

http://www.chattanoogachamber.com/can-do/site-selection/local-incentives

"Local incentives are offered by the Chattanooga and Hamilton County governments in the form of a payment in lieu of tax (PILOT) program for new & expanding businesses. This incentive allows qualified businesses to substantially reduce their local real and/or personal property taxes for new investments in real and personal property. Typically, projects must have an investment value of at least $5 million in new real and personal property and create 50 or more new jobs with wages equal to or greater than the average wage in Hamilton County as reported by the U. S. Department of Labor.

Once a client is able to share information on the type of project, proposed capital investment, new jobs, and payroll, the Chattanooga Chamber can readily provide a preliminary commitment with regard to tax abatement and land cost. The city and county are prepared to offer some form of tax abatement in combination with a competitive land cost for manufacturing companies interested in locating in Chattanooga.

February 6, 2014 at 8:02 a.m.
soakya said...

excellent post aae1049. I believe what Mr. Harr would really like to see is a TIF district set up for this area.

I believe most people don't understand the effects these PILOT agreements are having on Hamilton county and TN. On the surface they might sound like a good idea but when you dig into the financial statements you see the real effects. Population expansion, more unemployed, lower labor participation rates, higher debt and higher taxes for everyone else.

And most folks don't understand the Chambers role behind these agreements. The chamber has said it is seeking candidates that are "progressive" so that should tell you all you need to know about the chamber.

February 6, 2014 at 8:24 a.m.
aae1049 said...

By all means Soakya, buckets of our local tax dollars, a TIF for all the Chamber of Commerce club of 53 that mandates that the rest of us, stupid people, pay their share of taxes.

February 6, 2014 at 9:23 a.m.
nucanuck said...

It's easy to be against TIF, it is much more difficult to find solutions for abandoned brown field sites. Do you guys have any constructive ideas for re-developing urban blight or just want to sound-off?

BTW, have you ever seen the loooong list of tax exempt property in Hamilton County, it's enough to make your blood boil.

February 6, 2014 at 10:46 a.m.
aae1049 said...

There are better solutions than giving 5 to 30 year tax exemptions to only rich industry with absolutely no claw back provision. I have gone to Mr. Harr and the Chamber, and they are not interested in protecting the tax payer's best interest with claw back provisions. Met with them face to face. April Eidson

The local Chamber of Commerce continues to pour public messages to convince we the people that giving local tax dollars to rich industry is somehow good for us.

This notion of feeding our local tax dollars to the top in a trickle down economic model of the Chamber of Commerce, masters of corporate welfare, is based in cronyism and tax exempt programs for the rich industry. Our city has never been more impoverished; with the poverty rate increasing from 16 to 25 percent during the Chamber tear mandating that we the working class and small businesses pay the rich industry list of 53 share of local taxes and services, or PILOT. It should mean rich industrial flight from paying taxes, but what it really means is Payments In Lieu of Taxes (PILOT). This fancy name, PILOT, is designated so regular working class and poor, like me, that are busy in lives don’t know what the heck it means.

The Chamber of Commerce and their elected buddies are robbing small business and working class people. We should challenge this notion of the Chamber diverting our hard earned taxpayer resources from local services.

Why?

It is just mind boggling that the “corporate union" of the Chattanooga Area Chamber of Commerce receives $1.1 million annually of our local tax dollars to operate. Our local elected officials just won’t deny the Chamber of Commerce, a powerful organization, anything they want, including other people’s money called public resources. The Chamber of Commerce has members, let them pay dues that are adequate to fund the Chamber of Commerce functions in the city and county.

After all, at least 53 of the Chamber of Commerce largest industrial members have reduced property taxes under Payments in Lieu of Taxes (PILOT) incentive programs approved by the Chamber, prior to any public comment. Our city and county elected officials are just approved these agreements behind our backs. We learn the details, are the dirty deed is done.

These PILOT tax exemption are only available to big industry or business, and have no claw back provision to protect the taxpayers. If the corporate members do not create the number of jobs promised in exchange for our tax dollars, we the people are just taken the cleaners. Why aren't the taxpayers being protected in these bad business deals. We just get thrown under the bus, with no say in the matter, because our elected officials are cowards.

We are being robbed.

February 6, 2014 at 10:52 a.m.
cooljb said...

Anyone that thinks a TIF is an answer for anything needs to read this. California has more experience with TIF than anyone and have eliminated it from being used now. Is it not a wise decision to take a look at the history of Tax Incremental Financing before it cripples the local economy also? http://www.governing.com/columns/eco-engines/col-redevelopment-financing-gets-overhaul-in-california.html

February 6, 2014 at 4:18 p.m.
aae1049 said...

"Since schools get 50 percent of the property tax, that means the state is subsidizing redevelopment to the tune of $3 billion a year. When you’re staring at a $25 billion budget deficit, that’s real money."

TIF has been a disaster in so many states.

Great share cooljb

February 7, 2014 at 2:51 a.m.
gypsylady said...

For a start every county commissioner and city coucilmember should be pressured to reduce or cut out taxpayer dollars for the chamber. There is no point in having a non transparent entity functioning as an arm of the government. Chamber sympathizers like to claim that Detroit is bankrupt because of unions. Detroit is bankrupt because of a corrupt government and because of their overuse of Pilot's. GM is still benefitting from these agreements and Detroit can't collect the full value of some of their most valuable land. Decisions made now will come back to bite us in 20 years or so.

February 7, 2014 at 11:24 a.m.
soakya said...

Go read this story, "Planners urge mayor's involvement in Chattanooga's center city renaissance"

I pulled the following statement from it, "But following through on the plan could cost millions of dollars -- money that private developers have shown themselves reluctant to spend."

Just why are the developers reluctant to spend that money? Don't they want to make money, after reading the article this sounds like a sure winner. If this was a winner you couldn't stop developers from investing their own money. You think you progressives would understand this, you call them greedy for a reason, they like to make money and I don't blame them for that. There is a reason they are reluctant. Why won't they risk their own money? I'll answer it. The risk is too great so they want to spread it to the taxpayers and they know they can. Taxpayer money is how wealth is created now.

February 8, 2014 at 7:07 a.m.
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