Hamilton County Commission approves 41-year tax break for Jaycee Tower rehab

Jaycee Towers is located on M.L.K. Boulevard in downtown Chattanooga.
Jaycee Towers is located on M.L.K. Boulevard in downtown Chattanooga.

The Hamilton County Commission has approved a 41-year tax break for a developer to rehabilitate Jaycee Towers, which provides housing for seniors living on low to moderate incomes.

Officials with Jaycee Future Corp., the nonprofit agency that built the 18-story tower in 1970, say they can't keep operating the apartment tower at 500 W. M.L. King Blvd.

Without a new owner willing to invest in the property, the doors will close in a few months and residents will have to find new homes, Jaycee Future Foundation board member Doug Chinery has said in recent meetings.

Purchaser Wishrock Housing Partners & Investment Group of Portland, Maine, said it can't do the project without a long-term payment-in-lieu-of-taxes (PILOT) agreement.

On Wednesday, the commission voted 8-0 in favor of the plan. The Chattanooga City Council approved the tax break proposal last month.

Several commissioners said they were concerned with the lengthy term of the agreement and worried it could set a precedent for other long-term tax breaks for housing developers. However, they all agreed supporting Jaycee Towers senior living was a good use of a PILOT.

"We had to look at the whole picture," Chairman Chester Bankston said.

Commissioner Joe Graham said the matter had weighed heavily on him.

"What I don't like to do is kick the can down the road 41 years to our grandchildren's grandchildren," Graham said.

Commissioner Warren Mackey said the issue came down to helping the less fortunate instead of just "more affluent" families, citing the commission's past approval of other housing development PILOTs.

"It boils down to principles, largely," Mackey said.

Wishrock developer Penn Lindsay has said the plan involves a "full and substantial renovation." The overhaul will reduce the tower's 190 apartments down to 175 by combining some smaller units into larger ones. Now, 60 units are too dilapidated to be occupied.

The agreement calls for Wishrock to renovate Jaycee Towers within two years and to continue to provide affordable housing for seniors with low to moderate incomes.

Lindsay has said rents will range between $695 and $880 a month. Most of the current residents put 30 percent of their income toward their rent, with governmental assistance making up the difference.

In return, the developer will not have to pay full taxation on improvements made to the property during the agreement period.

Wishrock will pay $51,000 per year for the first 11 years of the agreement, which will fund the county school system.

With each succeeding 10-year period, the developer will pay an additional 15 percent towards school funding. By the last 10-year period of the agreement, Wishrock will pay $77,564 annually.

Jaycee Towers currently generates no property tax revenues because it is owned by a nonprofit organization.

Contact staff writer Paul Leach at 423-757-6481 or pleach@timesfreepress.com. Follow him on Twitter @pleach_tfp.

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