Two projects that will add hundreds of apartments to downtown Chattanooga moved ahead Wednesday, but a city panel is looking at better oversight of such housing efforts that receive property tax breaks.
“We want to make some attempt to gather information about the health of the project – is it on time, is it going to happen, is it a facility actually performing and being constructed and open and occupied on the timeline we agreed,” said Lloyd Longnion, a Health, Educational and Housing Facility Board member.
The panel on Wednesday authorized the mayor to enter into tax breaks with an Atlanta company for redevelopment of a vacant tract on the 700 block of Market Street holding a 10-story mixed-use building. The Simpson Organization plans to start work this fall on the structure that would hold 125 apartments along with retail and office space.
Also, the board approved changes to a payment-in-lieu-of-taxes agreement related to renovating some Chattanooga Choo Choo hotel rooms into apartments. The conversion of 97 hotel rooms to small apartments is part of an $8 million Choo Choo renovation announced last summer.
Longnion offered a proposal that calls for better oversight and accountability for housing projects that receive the tax breaks.
The board appointed a three-person committee of its members to develop a one-page sheet that Longnion’s proposal terms an “annual report tool.”
The report could include information about a project such as construction start and completion dates, tenant occupancy, and the share of affordable housing units. Data about vacancies, revenue and investment also could be included.
Board attorney Phillip Noblett said that information learned from the report concerning a party not meeting certain targets could be forwarded to the City Council. That body could take actions to limit the tax breaks if the targets are not being met, he said.
“I agree with the concept,” said Hicks Armor, the board’s chairman, asking what has been done in the past by the city.
Noblett said that if an entity stops making an in-lieu-of-tax payment, the city attorney’s office is notified and a letter is sent to the company.
“That has occurred in the past,” he said.
Panel member Dana Perry said that companies will provide information about their projects to the city in different ways without a standard way of reporting.
“I think this is a great starting point,” she said.
The current housing tax-break program, which allows developers not to pay most of the property taxes on improvements made to downtown properties to add more apartments, has come under fire by some for its need.
Chattanooga Tea Party President Mark West has said that downtown is booming and supply will naturally catch up with the demand for downtown rental living without tax breaks.
“I really don’t see that as a need at this point. We’ve seen Chattanooga develop and thrive over the last couple of decades to the point where I think companies and people are clamoring to come to our city,” West said recently. “And on the other hand, our city and community has a need for revenue.”
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.