The Chattanooga Housing Authority is aiming to cooperate with the city and developers of The Bend mixed-use project in pursuing a special tax district to help revitalize downtown's Westside.
The housing authority board Tuesday passed a resolution authorizing the agency to work with the city and The Bend concerning a potential tax-increment financing arrangement that in many ways could be similar to one just approved for the planned new Chattanooga Lookouts stadium project.
But unlike the stadium effort in the South Broad District that was spearheaded by the city and Hamilton County, application for the tax-increment financing is expected to be done by Urban Story Ventures, the development group behind The Bend project off Riverfront Parkway.
In a statement, Urban Story Ventures said it has been working with the housing authority and the city to finalize a tax-increment financing application for submission later this week that would need local government approval.
"Together, we are thoughtfully crafting a plan to address the needs and opportunities of this important area of downtown Chattanooga," the emailed statement said.
Robin Derryberry, a housing authority spokeswoman, said the tax-increment financing, if approved, will play a vital role in the redevelopment of Chattanooga's oldest public housing community, which currently houses over 1,500 families.
"The TIF will also be helpful in leveraging funds as the Chattanooga Housing Authority pursues a HUD Choice Neighborhoods grant in the fall," she said in an email.
Through tax-increment financing, a special district is designed to spur development in needed areas often before such activity would typically take place. Developers and local governments often collaborate in a redevelopment project and attract more economic activity and bolster property taxes within the entire district.
The money collected in the tax district in the Westside could pay for infrastructure and other improvements there.
In the Lookouts stadium project, for example, the special district is allowing the city and county to capture a portion of additional property tax revenue generated by new development to pay down 30-year bonds issued for the new ballpark. Within the tax district, money could also be used for improving infrastructure such as roads and sewers around the stadium, officials have said.
The stadium tax-increment financing included creation of a tax district of 470 acres around the proposed ballpark on old foundry land.
The housing authority previously developed a Westside Evolve development plan that involves 120 acres. The Bend also is about 120 acres in size. But it's currently not known how many acres may be approved in a proposed tax-increment financing plan for the Westside.
According to the housing authority, the special tax district could benefit its Westside Evolve plan. The plan lays out a more than 10-year road map for equitable, sustainable and holistic revitalization.
The plan was developed to build enough new housing units to maintain subsidized units for all existing Westside tenants while bringing new services, businesses and recreational opportunities to the area, officials have said. A 130-page plan recommends a mixed-use development on the 120 acres in its targeted area that could bring up to $1 billion of investment to the Westside over the next decade.
The Bend emerged from the former Alstom manufacturing site across Riverfront Parkway from the housing authority's Westside properties.
In 2018, a group that includes Chattanooga developers Jimmy White and Hiren Desai bought the former longtime manufacturing parcel from GE Power for $30 million. GE had earlier acquired the property from Alstom and then later announced plans to shut down manufacturing.
In 2019, after a lengthy planning effort, The Bend's developers revealed possibilities for the tract that included housing, hotels, manufacturing, offices, a canal, a food hall, music venue, child care center and more.
"We're creating a beautiful campus to live, work and play," White said in an earlier interview.
According to Urban Story Ventures, the proposed tax-increment financing will use the incremental tax revenue to construct necessary public infrastructure for the Bend and for Westside Evolves. Also, the statement said, the revenue will be used to support affordable housing -- "a well-known important initiative for the city."
In addition, the tax-increment financing could generate money for Hamilton County education, according to the development group.
"Our development group is the TIF applicant, and we are following the standard procedures required by the city and Industrial Development Board to submit our application," the statement said.
In the Westside Evolve plan developed by residents, planners and consultants over 18 months, all of the subsidized units in the Westside will be maintained, officials have said, and there will be a "build first" strategy to ensure new affordable housing is built before the old units are torn down.
The area is home to residents who live in subsidized housing at College Hill Courts and the neighboring Boynton Terrace Apartments, Gateway Towers, Dogwood Manor, Ridgeway, Golden Gateway, Boynton Overlook and Riverview Apartments.
Helen Burns Sharp, founder of the Chattanooga public interest advocacy group Accountability for Taxpayer Money, said in a phone interview that having The Bend as the applicant enables agreements between its officials and local government.
"We want to make sure what they're committing to in the way of jobs and investments," she said, adding there's an opportunity to put in claw-back provisions in an agreement to ensure promises are fulfilled.
Sharp said she can see the appeal of tax-increment financing related to The Bend, given its vision and record of producing good jobs such as at battery materials maker Novonix.
Also, including the housing authority's site in tax-increment financing means that some of future private investment at The Bend can be spent on projects in the Westside Evolve plan, she said.
"That's a real plus," Sharp said.
In addition, she said, the proposed tax-increment financing is an opportunity to craft a community benefits agreement that helps the area. Sharp said producing more affordable housing could be a component of such an agreement.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.