The effort to breathe life into a high-profile, vacant 140-acre tract on Chattanooga's Southside could see a boost with a new law that offers another financing tool for developers.
"It makes development more financially viable," said Michael Mallen, a principal in the group that owns both the former Wheland Foundry and U.S. Pipe properties.
The legislation, signed earlier this month by Gov. Bill Haslam, will enable tax increment financing for the site, officials said. It permits most of the future increases in sales tax collections from within a targeted area to be used for projects within that district.
The legislation targeted three brownfield locations in Tennessee: the Wheland-U.S. Pipe tract, the existing Whirlpool plant site in Bradley County, and a former Sears facility in Memphis, said Mallen.
State Rep. Gerald McCormick, R-Chattanooga, who shepherded the bill in the House, said he and others would like to see the Wheland/U.S. Pipe property redeveloped.
"It's a gateway to our city," he said about the parcel that adjoins Interstate 24 near Moccasin Bend.
State Sen. Andy Berke, D-Chattanooga, said the city approached the Legislature about getting the taxing zone for the Southside.
"We're trying to spur building and job creation on the site by offering this as an incentive," Berke said.
Mallen said an economic impact plan could be brought to the city showing potential property and sales tax revenue increases. Then, if the plan is endorsed, bonds could be issued to help provide financing, he said.
"It's not a tax increase," Mallen said. "When you figure in the cost [of development], it gives equal footing to developing greenfield property."
Local taxes still would be paid for local schools, but the local share of other taxes collected within the targeted zone could be used to repay bonds used to finance development. Such bonds could be used for roads, sidewalks, landscaping, cleanup and parks and other similar infrastructure.
Mallen's group bought Wheland Foundry off South Broad Street after the business shut down in 2003 following 136 years of operation.
Three years later, the adjacent U.S. Pipe site closed after more than 100 years of operation. The business group, Perimeter Properties, purchased that site and since has been looking at redevelopment options for the property.
Mallen, who also is an attorney with the Miller & Martin law firm, said that with the economy rebounding after the severe recession, there are developers looking at the land.
"This legislation may be a springboard to be a deciding factor for a developer," he said.
Mallen said his group still sees the property as a mixed-use development featuring housing, commercial, retail and even light manufacturing.
It could also hold a lot of green and recreational space, he said.
On the Tennessee River side of I-24, a small parcel still is viewed as possibly holding some sort of gateway presence, Mallen said.
"It has the most breathtaking views of the whole site," he said. Work is going on there to rework a former landfill, Mallen said.
On the U.S. Pipe site, the group hired experts to do an inventory and designate certain buildings as architecturally significant, he said. Other buildings were demolished, Mallen said.
In Cleveland, Tenn., major employer Whirlpool is building a new plant, slated to start production in early 2012, on a greenfield site at Benton Pike and Michigan Avenue about five miles away from existing facilities, which are located in a collection of old buildings.
Whirlpool's main site takes up most of about seven blocks in a gritty part of Cleveland on the edge of downtown. Nearby are empty brick structures that formerly held manufacturing ventures of their own.
Cleveland Mayor Tom Rowland has a Southside Redevelopment Task Force to explore the Whirlpool site's future.
Reporter Andy Sher contributed to this story.
Contact Mike Pare at email@example.com or 423-757-6318.