A real estate company that owns the Walnut Commons apartment building in downtown Chattanooga will keep a controversial tax break after action Wednesday by a city panel.
The city’s Health, Educational and Housing Facility Board gave approval to documents that will enable the Nebraska company to maintain the property tax break that could amount to $1.4 million in savings.
Alfred Smith, an attorney for the company, said the board reached the only conclusion it could.
“They honored the will of the City Council and [Hamilton] County Commission as they should have,” he said.
Smith said there were no grounds for reopening the structure of the tax incentive agreement. “To do so would be grossly unfair,” he said.
While HEB voted to approve the deal, board member Lloyd Longnion abstained.
Helen Burns Sharp, founder of the taxpayer watchdog group Accountability for Taxpayer Money and an opponent of the incentives, said the board didn’t understand what it was voting on.
She said ATM is exploring its options in terms of future action it may take.
John Konvalinka, an attorney for ATM, had argued earlier before the panel that it was being asked to sign off on a deal that was different from which it earlier OK’d.
“The deal has changed a number of times,” he said. Earlier, HEB had granted the tax breaks to the apartment project.
Sharp had told the board it had “an opportunity to do what is right for the public. You need to make a decision in the public interest.”
Walnut Commons, with 100 apartments at Walnut Street and Aquarium Way, was the biggest such complex erected downtown in decades when it opened in 2013. In 2014, a local development group that built the project sold the stock in the entity, Walnut Commons LLC, to the Omaha, Neb., company for about $15 million.
The new owner wanted to exercise an option to buy the property it had been leasing from another city panel, the Chattanooga Downtown Redevelopment Corp.
Last month, that body approved a special warranty deed to convey the property to HEB, which in turn gave its final approval on Wednesday.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.