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‘It sure does smell bad’: Judge reluctantly sides with city in BID lawsuit

Staff photo by Doug Strickland / 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.
Staff photo by Doug Strickland / 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. Staff photo by Doug Strickland / 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.

By Sarah Grace Taylor 3 min read

The city of Chattanooga was all but absolved at a Friday hearing on a lawsuit claiming the formation of the controversial Business Improvement District downtown was illegal.

Hamilton County Chancellor Jeffrey Atherton presided over the third and likely final hearing of the lawsuit, which was filed against the city by six property owners after a special district was formed on its second pass through the city council this summer.

The judge sided with the city on all four counts in the summary judgment order filed by plaintiff and attorney Charles Paty, which included accusations of improper notice, questionable financial liability of the city and improper ordinance formation regarding the city’s July approval of the district. The district will assess around $1 million in fees from property owners for visual and safety improvements in central Chattanooga.

While the judge sided easily with the city on the other three matters, he struggled to come to a conclusion on whether reintroducing the district as a resolution immediately after the petition that first brought it to the council violated state law. That law requires a year between attempts to form a Business Improvement District.

What is the BID?

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.