Hamilton County Commission not committed to proposed Chattanooga business improvement district

Buildings inside a proposed Business Improvement District are seen on Tuesday, April 16, 2019, in Chattanooga, Tenn. The proposed district would encompass downtown Chattanooga from the Riverfront to 11th Street and from U.S. Highway 27 to different areas bordered by Cherry Street, Lindsay Street and Georgia Avenue.

The proposed business improvement district in central Chattanooga is supported by property owners, the city and area nonprofits, but support from the county is still unconfirmed.

A BID is a privately-formed community improvement initiative, governed by a board of property owners, common in cities across the country. The nonprofit downtown redevelopment group River City Co. and business owners in the area have collected signatures supporting the creation of the district from 57.9 percent of property owners in the area, exceeding the state required 50 percent of properties, and 76.6 percent of the assessed value in the BID, also topping the 66.6 percent required for such districts.

Now, supporters are seeking funding for the project and approval from the Chattanooga City Council.

In a presentation to the Hamilton County Commission on Wednesday morning, Kim White, president of River City, detailed the traction of the BID before asking the commission to "buy-in" for $23,000.

"This is a business," White said. "It's a million-dollar business that will take personnel, store front and administration."

Commercial and nonprofit landowners in the district will pay an annual assessment of 9 cents per square foot, of either the lot or building size, whichever is greater, plus $4.95 per linear foot of lot frontage. Residential property owners with townhouses or condominiums would pay a flat annual fee of $150 per unit.

While nonprofits are allowed to apply for a hardship waiver of the fee, White touted that the Tennessee Aquarium and the YMCA had all chosen to pay the fee and participate in the district. According to White, the City of Chattanooga has also agreed to pay its building fees, totaling $40,000.

While the county commission was not asked to vote on anything Wednesday, White asked the county to pay its optional fee of $23,000.

District 8 Commissioner Tim Boyd opposed the county contributing to the BID and grilled White about the legal parameters of the board.

Boyd's first concern was whether or not the BID board would have condemnation power. In an email to commissioners on Tuesday, White had denied that the board would be granted any such power, citing TCA 7-84-520, which names the powers of the BID board and does not mention condemnation.

"I've got a legal opinion that contradicts your response and until we have third-party legal opinion that confirms that the BID management group does not have the power to condemn private property, I can't see how this county commission could be any part of it," Boyd said. "I've asked the county attorney to review that, but until that time, I think we're a little premature."

Boyd then asked White what liability the county government would assume if the BID employed city ambassadors to interact with the public.

"I don't know any liability that the county government would assume," White answered. "We would contract with an entity to provide ambassador services, so it would be that they had insurance just like a private company has insurance. Just like we contract with a lot of people."

Boyd was not moved.

"I don't like going to legal meetings and having to settle [lawsuits]. And this seems like it's opening up more liability for us," Boyd said. "I don't see us being receptive to adding any more money to the budget for anything."

Boyd added that the county allocates nearly $9 million to the Chattanooga Area Convention and Visitors' Bureau and the Chattanooga Area Chamber of Commerce combined, both of which have supported the BID, and he suggested those groups should pay the $23,000 for the county.

After the meeting, White said she was not discouraged by Boyd's questioning.

"I didn't take it as a negative," White said of the interaction. "We would love for them to support the initiative and I'm hopeful that the mayor will add [the $23,000] to the budget."

County Mayor Jim Coppinger later told the Times Free Press that the commission would consider buying in after the city approves the creation of the district.

The BID proposal will go before the City Council for first reading on May 28.

Contact Sarah Grace Taylor at staylor@timesfreeepress.com