A request for the City Council to approve a 14-year tax freeze for renovations to the Maclellan Building, one of Chattanooga’s landmark downtown structures, turned into a lively discussion Tuesday about whether the city’s residential tax breaks are beneficial in the long run.
Councilman Yusuf Hakeem said he wants to rein in the city’s payment in lieu of taxes, or PILOT, agreements, noting that downtown is vibrant enough to support itself. Meanwhile, Councilman Moses Freeman argued that reducing tax breaks could force the city to raise taxes or cause more downtown buildings to remain empty or in disrepair.
“An empty city is a scary city. It’s a dreary city,” Freeman said. “We can’t stop focusing on the heart and soul of our community that is downtown. If this place, downtown, dies, our whole community will began to die.”
Others, including Councilman Ken Smith, asked for more government accountability to monitor developers and make sure they keep their agreements.
The current debate is over whether the city should give developer Heritage Land and Development Co. a 14-year waiver of taxes (with a four-year phase-in of taxes at the end of that period) to renovate the Maclellan Building on Broad Street that has remained mainly vacant for 10 years. Under that agreement, the developer would pay roughly $1.5 million in property taxes over 14 years, but Hamilton County and the city also would waive about $1.3 million over the same period.