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Sharp: The Downtown Business Improvement District is a case study of power in Chattanooga

Staff photo by Doug StricklandBuildings inside a proposed Business Improvement District are seen on April 16, 2019, in Chattanooga, Tennessee. The proposed district would encompass downtown Chattanooga from the Riverfront to 11th Street and from U.S. Highway 27 to different areas bordered by Cherry Street, Lindsay Street and Georgia Avenue.
Staff photo by Doug StricklandBuildings inside a proposed Business Improvement District are seen on April 16, 2019, in Chattanooga, Tennessee. The proposed district would encompass downtown Chattanooga from the Riverfront to 11th Street and from U.S. Highway 27 to different areas bordered by Cherry Street, Lindsay Street and Georgia Avenue. Staff photo by Doug StricklandBuildings inside a proposed Business Improvement District are seen on April 16, 2019, in Chattanooga, Tennessee. The proposed district would encompass downtown Chattanooga from the Riverfront to 11th Street and from U.S. Highway 27 to different areas bordered by Cherry Street, Lindsay Street and Georgia Avenue.

By Helen Burns Sharp 4 min read

photo Helen Burns Sharp

The Chattanooga City Council soon will consider an ordinance to create a Downtown Business Improvement District. BIDs are common in other cities and could be an excellent tool here in making the business area more attractive and safer.

BIDs are private sector initiatives for private property. Recent news articles suggest that city and county government are being viewed as private property owners and asked to provide public taxpayer funding based on the BID’s assessment formula. Really?

The ordinance the River City Company submitted to the city reads quite differently from the ordinances that set up BIDs in Nashville and Knoxville. It appears to have been written by the local law firm that represents a majority of the major property owners in the district and has represented most of the successful applicants for various tax breaks awarded by the city and county. These private attorneys are good at advocating for their clients’ financial interests. That is their job.

But who is doing the work for local government to look out for the public interest in negotiations? Based on my experience in monitoring tax incentives, I would say no one. That needs to change. Hamilton County leads the state in the amount of tax revenue abated through payment-in-lieu-of-taxes agreements, more than $26 million last year alone. Food for thought as the county considers a major property tax increase.

Chattanooga’s proposed ordinance must change before passage to clarify that the BID cannot require our local governments to pay anything; that nonprofits exempt from property tax do not fall under the ordinance, and that properties under tax break agreements do not get special treatment.