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Hamilton County Commission approves Chestnut Flats tax break

The Hamilton County Commission, pictured here during a May meeting, has approved a resolution that could bring a county-funded SRO to Signal Mountain Middle/High School.
The Hamilton County Commission, pictured here during a May meeting, has approved a resolution that could bring a county-funded SRO to Signal Mountain Middle/High School. The Hamilton County Commission, pictured here during a May meeting, has approved a resolution that could bring a county-funded SRO to Signal Mountain Middle/High School.

By Paul Leach 2 min read

photo Sabrena Smedley
photo Tim Boyd

The Hamilton County Commission has narrowly approved a 17-year tax break for a $20 million affordable housing development on Chattanooga’s Southside.

A few weeks ago, the City Council approved the same payment-in-lieu-of-taxes agreement with Elmington Group of Nashville, which plans to build a 174-unit complex on a vacant 3-acre lot at 2108 Chestnut St. The Chestnut Flats facility will offer a mixture of one- and two-bedroom apartments, each renting for $600-$750 month.

In return for the tax break, the developer promises to restrict tenants to households that earn no more than 60 percent of the average median income. That income in Hamilton County is $61,300 for a family of four, according to 2016 Housing and Urban Development figures. The 60 percent average median income threshold tops out at $36,720 for a family of four.

On Wednesday, commissioners voted 5-3 in favor of the PILOT agreement. Commission Chairman Chester Bankston and Commissioners Sabrena Smedley and Joe Graham opposed the measure.

“My problem with this [agreement] is I’m not convinced this is the right location and the highest, best use of this property,” Smedley said. “The other problem I have is the duration” of it.