Chattanooga City Council narrowly approves business improvement district, awaits public hearing

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 Chattanooga City Council narrowly voted to approve a proposed business improvement district on first reading Tuesday, despite some confusion surrounding state requirements on a public hearing.

Nonprofit downtown redevelopment group River City Co. and business owners in the area have proposed and filed a petition to create a special property owner-funded district in Chattanooga's city center that would have access to business promotion resources, mimicking thousands of similar districts across the country. Supporters have collected signatures supporting the creation of the district from 57.9% of property owners in the area, exceeding the state-required 50% of properties, and 76.6% of the assessed value in the improvement district, also topping the 66.6% required for such districts.

Tuesday, the decision was put in the hands of the council, five of whom voted to allow the business improvement district to come before citizens next week in its first public hearing and final reading, per Tennessee law.

"In my opinion, it is best when the government is led by the people," Councilman Jerry Mitchell said before moving to approve the ordinance, which was then seconded by Councilman Anthony Byrd.

Before any further vote, the council bounced back to asking city attorney Phil Noblett to clarify parts of the state code that dictate procedure for any city adopting a business improvement district. Noblett has interpreted the code to require that the city hold all necessary readings before the date of the public hearing, which has been set for June 4, and then take a final vote to amend, pass or deny the district at the same meeting.

"I agree with what you're saying, but can we move to table this, then have a hearing, then vote?" Councilwoman Demetrus Coonrod asked, advocating to hold the vote until after members of the public have been given an opportunity to comment on the plan.

Noblett explained the code will not allow for that, and votes continued with some trepidation.

"I would vote in the affirmative tonight just to get it to the public," Councilman Chip Henderson said, adding that he needs to "see that overwhelming support" that the petition seemed to represent.

The business improvement district passed on first reading with council members Byrd, Erskine Oglesby, Henderson, Mitchell and Coonrod voting in favor, while councilmen Russell Gilbert Sr., Ken Smith and Darrin Ledford voted against.

"I read the law a little differently," Councilwoman Carol Berz said before abstaining from the vote. "I very much favor [business improvement districts], but I am very much against the process."

Council members also suggested an amendment to the ordinance that would bar property owners from passing the cost of the district to renters, who do not have a say in the process, and another to clarify that the city is not required to participate in or pay for the district.

The ordinance now is scheduled for a public hearing and subsequent final vote at the June 4 council meeting at 6 p.m., but amendments to it could prolong the process.

The council also heard Tuesday a special presentation from Donna Williams, the city's administrator for economic and community development, who shared a report from the seven community outreach teams derived from last year's Housing Connections Conference.

Williams called for more density and different housing types to combat homelessness in Chattanooga, per Mayor Andy Berke's greater homelessness initiative.

The report echoed previous findings of the Chattanooga Interagency Council on Homelessness (CICH) and its new Homelessness Action Plan and the city's own Neighborhood Reinvestment Fund, as well as the goals of non-government partners like Chattanooga Neighborhood Enterprise, the Chattanooga Housing Authority, and Habitat For Humanity, all of which call for more robust affordable housing options in the city.

Contact Sarah Grace Taylor at or 423-757-6416.