Panel delays decision in Black Creek Mountain

Panel delays decision in Black Creek Mountain

July 25th, 2014 by Mike Pare in Business Around the Region

New houses are in the middle of being constructed in the Black Creek Mountain community.

Photo by Staff File Photo/Times Free Press.

Black Creek Mountain developers pledged Thursday to keep building the golf course community, while people questioning its tax increment financing called for a new review by Chattanooga officials.

The city's Industrial Development Board left unsettled a decision over whether to appeal a judge's ruling related to the project, and the panel planned to meet again in a couple of weeks.

The board met in a closed-door session with its attorneys for about 30 minutes after a public hearing on the matter that drew about 40 people.

James Miller, the panel's vice chairman, said it will convene later and render a decision about challenging Chancellor Frank Brown's ruling.

The judge stated last month there was something "fundamentally wrong" with the way the IDB handled a 2013 decision to award $9 million in tax increment financing to the developers. The money was used to build a road up Aetna Mountain for the development.

Brown voided the board's decision to allow the financing deal, called a TIF, based on violations of the state's open meetings law and conflicts of interest in the case.

Chattanooga developer Doug Stein said the project has been approved and is in line with state law.

"We did everything according to the rules of the law," he said, adding the project "clearly qualifies" under state law for the TIF.

"No taxpayer in Chattanooga or Hamilton County who lives outside the project [area for the TIF] will ever pay a penny for the TIF," Stein said. "The only money is incremental tax revenue from those people who purchase in Black Creek."

Stein said developers are grading for 96 lots and continuing work.

However, a number of people spoke up for sending the TIF back to the city for more study.

Helen Burns Sharp, a Chattanooga retiree who brought the lawsuit on which the judge ruled, called on the board to respect the chancellor's ruling.

"We ask the board not to let your attorneys convince you to be part of a Band-Aid procedural fix," she said. "You should not agree to consider this case until the city and county request your consideration."

Sharp said she'd like to see several criteria demonstrating the TIF is eligible under state law, such as the proposed development would not happen without the funding.

She said other criteria could include assurances the project would be completed and permanent jobs are created. In addition, she'd like to see more detail on how the money is spent. Sharp also called for the board's meeting with its attorney be done in public view.

Mike Mallen, an attorney for the developers, said there had been a lot of false remarks made over the past few weeks since the order was issued. What has been missed in Chancellor Brown's order is a statement that "The court did not have personal experience with bonds...," he said.

"I very much appreciate his candor on that point," Mallen said. "The facts are the IDB met at two duly called meetings. This project was approved subject to an opinion letter. It was accepted and the developers were told to proceed."

Lance Perrin, executive director of the group Chattanooga Organized for Action, asked the board to not appeal and back away from the Black Creek TIF.

Perrin termed it inappropriate for a governmental entity to use public financing for private development and profit.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.

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