The city of Chattanooga has decided it won't lose tens of thousands of dollars on the sale of a piece of prime King Street property to a developer and then lease back the half-acre property it sold for three years at about the same price.
We think that's wise.
In April, we said "we don't want the city to take a big loss on the property and then have to lease back parking from the new owners of the parcel."
The city recently decided to keep the property, which is currently being used as a parking lot for employees of the city's Development Resource Center across King Street.
It had bought the property for $195,000 a decade before the deal that the city's Chattanooga Downtown Redevelopment Corp. said it would negotiate last spring with developers Hiren Desai and Jimmy White. However, the developers offered the city the lot's assessed value of $134,700 and then said it would lease it back to the city for $140,000 for three years for parking.
City officials quickly said the assessed value and the proposed lease agreements were only starting points, which was a relief from what appeared to be - even with future taxes - a one-sided deal. But they now have "decided against any arrangement that would result in the sale of the parcel," according to City Finance Officer Daisy Madison, who also is chairwoman of the Chattanooga Downtown Redevelopment Corp. board.
"[K]eeping the land in the city's possession is in the best long-term interests of Chattanooga's taxpayers and citizens," she said in an email to the Times Free Press.
Madison acknowledged that the gravel parking lot "is not the highest and best use" of the land. She said any future agreements would be structured for improvement of the parcel or would otherwise "create better value for the community."
The lot lies between a six-story storage building on King Street that Desai and White are developing and a four-story, 108-room hotel they have under construction at the corner of King and Market streets.
A year ago, Desai told the newspaper he'd said to city officials, "If you don't give [the lot] to us, we'll just keep [the six-story structure] as a storage building." Nevertheless, the developers have started work on a microbrewery on the building's first floor, but they said last year the building eventually could house upper-floor apartments and other first-floor commercial space
On Monday, Desai told the paper, "I don't need the parking lot for my hotel," and "I think we have enough parking [space] for just the brewery."
In time, with retail and entertainment space growing on the Southside, we feel the city will be able to negotiate a better deal for the lot. As Kenny Rogers once opined, "You've got to know when to hold 'em."