Ahead of a scheduled vote next week on the project, private developers briefed the Hamilton County Commission on Wednesday on the redevelopment of a 120-acre plot of land on Chattanooga’s Westside dubbed The Bend.
The Bend is a potential $2.3 billion redevelopment of the former Alstom tract downtown. The development would include hundreds of thousands of square feet in commercial, retail and recreation space, according to developers Urban Story Ventures.
It would also include approximately 500 hotel rooms and 1,500 housing units, 10% of which would be designated for households making 80% or below the area median income.
“This is not a developer coming to impose their will. This is for everyone,” Jimmy White, president and CEO of Urban Story Ventures, said during Wednesday’s commission meeting.
The commission is expected to vote on the economic impact plan for The Bend next week. The plan would include designating The Bend and Westside Evolves — a nearly $1 billion plan to replace public housing in the area with mixed-income housing — into a special tax district.
The two development plans have collectively been called One Westside.
The special tax district is formally known as tax increment financing, a funding mechanism used by the city and county to promote development and growth through tax incentives.
Unlike in other parts of the city and county, new tax revenues collected — due to the increased property value — in the special districts are not divvied to the county and city in a traditional manner. The new tax revenue is split based on an approved agreement over a certain amount of time.
In this case, new revenue in the special tax district for One Westside would last 20 years and would fund essential services, education, infrastructure and affordable housing.
White, who has previously said the project would not be possible without the tax incentives, said during the meeting they would cover about half of expected infrastructure costs.
“This TIF, the way we model it with public incentives for affordable housing and education, is going to be transformational, something like we’ve never seen before,” White said.
(READ MORE: The Bend developers are trying to bring headquarters-type jobs to Chattanooga)
Projected breakdown for every $1 in new tax revenue from One Westside
— Essential services: 28.1 cents.
— Public schools: 22.6 cents.
— Sidewalks, stormwater and other infrastructure: 21.95 cents.
— Downtown educational investments: 13 cents.
— Westside Evolves: 10 cents.
— Administrative services: 2.35 cents.
— New fire station: 2 cents.
Source: Hamilton County and city of Chattanooga
If the special tax district is cleared by both the Chattanooga City Council and the Hamilton County Commission, the Chattanooga Housing Authority is expected to apply for a $50 million federal grant by the end of the year to redevelop public housing on the Westside — Gateway Tower and College Hill Courts — into mixed-income housing.
Part of the revenue created from the special tax district would be used to match the grant with local funds, which is required under the federal grant.
According to plans for Westside Evolves, public housing residents will have a right to return after redevelopment.
(READ MORE: Survey: Most of Chattanooga’s Westside residents want to stay)
Commissioner Steve Highlander, R-Ooltewah, wanted certainty that residents wouldn’t pay more in rent when they returned.
“Nobody will pay more than 30% of their adjusted gross income,” said Betsy Wright, the housing authority’s executive director, in response to Highlander.
That rate is what residents currently pay at Westside’s public housing.
Education
David Sharpe, D-Red Bank, said during Wednesday’s meeting he likes the One Westside project, but he had questions about the education funding.
According to the proposed tax agreement, $195 million is projected to go to the county’s school system. In total, $345 million would go to education more broadly.
“How much of that is going to go to help teachers put food on their tables?” Sharpe said.
Lee Brouner, Hamilton County’s chief financial officer, said it is up to the County Commission how education funding is spent.
“This body will have the prerogative to allocate all of those funds or any portion of those funds toward the school’s operating budget,” Brouner said. “If chosen, it can be retained for future capital projects, etc., but it’ll be up to this body to decide how to spend those funds.”
Contact Ben Sessoms at bsessoms@timesfreepress.com or 423-757-6354.