Chattanooga mulls new subsidy rules after Black Creek battle

photo A new fleet of electric vehicles for golf course management are on display on the putting green at Black Creek.
photo New houses are being constructed in the Black Creek Mountain community.
photo Wade Hinton

Chattanooga is taking a fresh look at Tax Increment Financing, after a past Council slapped a moratorium on new proposals amid public outcry.

Council members in October, 2012 put a 90-day hold on new TIFs, a move that came shortly after the approval for the controversial Black Creek Mountain TIF, which provides $9 million in taxpayer financing to fund a road from a high-end golf course community to the top of Aetna Mountain.

Critics charged and council members agreed that the city needed clear rules for such tax agreements. But no such rules were ever passed.

One harsh critic of taxpayer increment financing, Helen Burns Sharp, filed suit against the city for what she and a judge found were improper procedures that may have violated state laws that require transparency.

In a case that generated wide public interest, a judge found that the $9 million in taxpayer assistance was approved during a secret meeting by the Industrial Development Board under the guidance of former city attorney Mike McMahan.

Current City Attorney Wade Hinton said today during a strategic planning meeting that despite the council's resolution, the rules were never written, and his office is now picking up the ball.

Council members heard an "educational-only" presentation from the Chattanooga Area Chamber of Commerce about how TIFs have been used in Nashville, San Francisco and cities across the nation.

Ric Ebersole, former chairman of the Industrial Development Board, has said that those cities have rules that prevent perceived abuses, and it was Chattanooga's minimal checks and balances that allowed taxpayer money to flow to a New York-based golf course developer.

Read more in Wednesday's Chattanooga Times Free Press.

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