River City seeks tax breaks for housing in downtown Chattanooga

River City seeks tax breaks for housing in downtown Chattanooga

August 10th, 2012 by Ansley Haman in Business Around the Region

Kim White, CEO of RiverCity Co. in Chattanooga

Photo by Contributed Photo/Times Free Press.

River City Co. CEO Kim White has asked Hamilton County commissioners to approve a 10-year tax incentive program aimed at developing housing in downtown Chattanooga.

A similar incentive program expired in December 2011 after assisting development of several projects downtown, including the Bread Factory Lofts, Johnston Apartments at St. John's, Frazier Place, the Morgan Adams Building, Mountain City Lofts and the upcoming Chattanooga Bank Building, Walnut Commons and Mission on Main.

At the Thursday commission meeting, White said River City amended the proposed program's boundaries to require that developers pay the education portion of their property taxes, an agreement known as payment in lieu of taxes, or PILOT.

In the new River City PILOT, property taxes will be frozen for about 10 years at the rate assessed when the agreement is made. Longer terms can be set for older or historic buildings, White said.

"The goal is to create workforce housing downtown," White said.

The North Shore no longer will be included, but areas such as Lincoln Park will be added, White said.

Currently, White estimates the market rate for downtown housing ranges from $800 to $1,500 a month, depending on square footage and number of bedrooms.

River City is amending the proposal after commissioners expressed concern that the county mayor would only have veto power over PILOT agreements for 21 days after each one is inked, White said.

"They want more control over the properties that are brought before them," White said after Thursday's meeting. "We are going back to change that. Instead of them just having veto power, they will have approval."

Chattanooga City Council members, who also must approve the PILOTs, have told her they want to approve each project as well, she said.

Commissioner Joe Graham said he wants the commission to have a say in the approvals.

"I believe that each PILOT agreement needs to be brought to this body and vetted publicly," he said. "I think this body, being that we are the taxing authority, needs to be brought aware."

Commissioner Fred Skillern echoed Graham's concerns.

Commissioners asked White to return next week, when they plan to further discuss the resolution.