Hamilton County Commissioners to take up housing incentives

photo Kim White

After questions arose from the Hamilton County Commission, the River City Co. has altered details of a 10-year tax incentive program to entice developers to build new apartments downtown.

But commissioners -- who are involved in the plan because it involves property taxes, which the commission manages -- said they still plan to question the structure of the program.

Kim White, CEO of River City, a downtown development company, said the organization changed the program this week to give the commission and the Chattanooga City Council approval power for each project.

"We have changed the ordinance to read that they would have to approve each project, and I've had conversations with Commissioner Joe Graham," she said.

Graham's District 6 includes the downtown area.

"I'll be interested to see the changes," Graham said. "We're the taxing authority, and it's our job to decide who gets the tax breaks and who doesn't."

Last week's draft included only a 21-day veto period for projects approved by River City.

"I do know about the changes," Commission Chairman Larry Henry said. "I was a little apprehensive about the 21-day veto. We may or may not hear about the projects as they come up."

The changes will be more "open and transparent," Henry said.

The program would freeze the tax rate at the time of the project's approval for 10 years, or possibly longer if the project rehabilitates a historic building, White said.

Though Graham and Commissioner Tim Boyd acknowledge that incentives are a useful tool, they note that the program is designed to last a decade -- through parts of at least three four-year commission terms.

The newly proposed plan includes a PILOT agreement, or payment in lieu of taxes, that will require developers to pay the equivalent of the education portion of their otherwise-reduced property taxes. Commissioners previously requested that the PILOT requirement be added to the incentive program, the last version of which expired in December 2011.

The footprint for the qualifying area also is smaller than the last one, which included areas of the North Shore, White said.

Boyd said he supports the program, though he still has questions.

"I think it's important that we consider PILOT incentives for low- to moderate-income families," Boyd said.

County Mayor Jim Coppinger said his office has been briefed about changes to the program, which he said is important to the community's future because downtown needs more people living in it.

"Obviously, we have an issue with apartment rentals downtown," Coppinger said.

When BlueCross BlueShield of Tennessee moved its headquarters to Cameron Hill, the new campus replaced 350 rental units, and those haven't been replaced, White said. The tax incentive program "gives developers who are interested in doing downtown development at least the parameters of how the program would work," White said.

"This is not a tax abatement," she said. "The taxes that the county and city are getting now, they'll continue getting."

Contact staff writer Ansley Haman at [email protected] or 423-757-6481.