TIF for Helen Burns Sharp, zero for Black Creek developers

TIF for Helen Burns Sharp, zero for Black Creek developers

August 19th, 2014 in Opinion Times

Helen Burns Sharp

Photo by Contributed Photo/Times Free Press.

We have a suggestion for a new Tax Increment Financing, or TIF, agreement: the Helen Burns Sharp legal fees fund.

After all, if we taxpayers can afford a $9 million agreement to pay for a road to the Black Creek Mountain project where houses would be built on Aetna Mountain along the last gorgeous mountain brow here left untouched by rich pretentiousness, surely we can get behind some reimbursement for Sharp, an ordinary citizen who has spent more than $50,000 of her own retirement savings to stop the wild squander of our money.

Never mind that Black Creek's developers have and will receive plenty of money for the homes they may sell on more than 1,200 acres of undeveloped land when that road (normally a cost of doing business) is complete. The developers -- including a giant New York hedge fund -- instead will be reimbursed by us for that road. These developers managed this by telling elected leaders and the local Industrial Development Board that the resulting highbrow property taxes would benefit the city. In fact, some of the property this road will open up isn't even in Hamilton County, much less in the city.

This brow-home developer welfare was first approved in 2012 by Chattanooga, Hamilton County and the local Industrial Development Board. But last month, Chancellor Frank Brown, in hearing the lawsuit brought by Sharp, ruled the TIF agreement invalid because of violations of open meetings rules, conflicts of interest and questions over whether the residential project itself complies with state law. He also issued a stinging rebuke to city and county officials for their secrecy and conflicts of interest involving the government role in the $500 million development.

The developers have included Jimmy Chapin, Gary Chazen, Doug Stein and Brant Enderle. (One of Doug Stein's companies has laid much of the asphalt in Chattanooga and Hamilton County.)

Among other questions raised by the case was the validity of the road cost estimate. Leonard Nixon, who owns the property adjacent to the proposed road, testified that he had seen a plan by previous developer Chapin to build the road for $2 million. "The $9 million should be investigated," Nixon said. "That road is going to cost less than $2 million. What they're asking for is operational capital to do the whole development."

Also, in approving the project, public officials relied on a now-discredited letter by George Masterson, an attorney for Nashville law firm Bass, Berry & Sims, indicating that a $9 million road to the development met the legal requirements to secure tax increment financing. But Masterson wrote that letter while he was being paid $50,000 by the developers, which Brown found to be a conflict of interest. Brown encouraged the parties to solicit the opinion of the Tennessee Attorney General before starting the entire process over again.

Well, forget that. On Friday, the city's Industrial Development Board reapproved the controversial $9 million TIF in a 4-1 vote.

Adding insult to injury, the resolution Friday was presented by the industrial board's attorney, Mike McMahan -- the same former city attorney who admittedly violated the state's open records law when he approved the TIF in 2012 without board approval or a public hearing. Current City Attorney Wade Hinton acknowledged that McMahan's participation would likely be a conflict of interest in a courtroom setting (since he was a witness in the lawsuit that now is under appeal), but argued such rules don't apply during a board meeting.

Really? Who appoints this board? The Chattanooga City Council. And who funds the council? Oh, yeah -- taxpayers. The same ones reimbursing private developers for a road to a posh brow community.

It's tempting to say these guys never learn. But the real folks who don't seem to learn is us -- the taxpayers with the thin wallets.

So let's hear the chant: TIF for Sharp! TIF for Sharp!