City tax district for Lookouts Stadium plan not subject to same requirements as when private sector proposes one

Application, review panel not required; officials say other safeguards in place

Staff File Photo by Robin Rudd / Two bicyclists use the Tennessee Riverwalk as they pass the former Wheland Foundry. The former Wheland Foundry is the site of a proposed massive redevelopment on the Southside. The plans include a new stadium for the Chattanooga Lookouts as a centerpiece. Local opinion is divided on the project.
Staff File Photo by Robin Rudd / Two bicyclists use the Tennessee Riverwalk as they pass the former Wheland Foundry. The former Wheland Foundry is the site of a proposed massive redevelopment on the Southside. The plans include a new stadium for the Chattanooga Lookouts as a centerpiece. Local opinion is divided on the project.

The Chattanooga City Council will consider a resolution Tuesday disclosing exemptions the city has from requirements for creation of a special tax district, a measure proposed to help fund a new stadium for the municipality's minor league baseball team.

The requirements apply when businesses seek to form such a district, but by policy do not apply when the city seeks one.

The requirements in question include a minimum $1,500 application fee, submitting a formal application and forming a five-person review committee to evaluate the proposal.

Jermaine Freeman, the senior adviser for economic opportunity under Mayor Tim Kelly, said the funding plan is already receiving sufficient scrutiny from public officials without following the process designed to vet applications the city receives from private developers.

Approval steps that are being taken include appearing in front of both the city and county industrial development boards, which isn't normally required for similar requests. The project also is subject to approval from the City Council and the Hamilton County Commission.

"When you have a big, complex project like this where there are many unknowns and many variables, the city just needs maximum flexibility," Freeman told the Chattanooga Times Free Press by phone.

Kelly and Hamilton County Mayor Jim Coppinger announced on June 30 plans to construct a $79.4 million multiuse stadium for the Chattanooga Lookouts on the blighted Wheland Foundry site in the city's South Broad District, which would be funded through 30-year revenue bonds issued by a newly formed sports authority.

Through a method called tax increment financing, a portion of the new property tax revenue generated on land surrounding the stadium would pay for 58% of the cost of the project.

But, Helen Burns Sharp, the founder of the nonprofit organization Accountability for Taxpayer Money, said the city's review process plays an important role in posing questions about projects that involve city tax dollars.

"I don't consider myself a 'critic' of this project," she told the Times Free Press by email, pointing to the opportunity it has to revitalize a blighted area in the city and other positive factors. "But the way this deal is structured can have a major impact on future property tax revenue for services like fire, police, streets, schools, parks and affordable housing for the next 30 years."

Sharp said one of the downsides of not following the policy is that it denies citizens the opportunity to review an application on the city website. Filling out an application would also help answer questions about what is fundamentally a complex project, she said, including how officials plan to address environmental cleanup.

She wonders if elected leaders should take more time to develop agreements with key players involved in the effort, such as a community benefits agreement, which could assure tangible benefits to local workers and the inclusion of affordable housing.

"I'm not saying the city hasn't looked into my questions about protecting taxpayers and providing community benefits," she said. "Just asking if we have done all we can do at this stage."

Chattanooga leaders passed a policy in 2015 outlining the approval process for tax increment financing applications. Freeman said the city adopted those rules to put in place local guardrails for private development - rules that didn't exist at the time - but those procedures don't apply to city-initiated projects or those performed on behalf of the Chattanooga Housing Authority.

Instead, the policy states the city will follow procedures deemed "appropriate under the circumstances." The city already follows state laws, officials noted.

Fundamentally, Freeman said, a tax increment financing plan initiated by a public entity like a city or county is very different from one proposed by a private developer.

"People need to understand that this was never meant to be a process to box in the city," he said about the city's policy. "It was meant to be a process that would help us vet the TIF requests from private developers."

More information about the project can be found at southbroad.info. The Chattanooga City Council meets at 6 p.m. every Tuesday at the John P. Franklin, Sr. City Council Building, 1000 Lindsay St.

Panel schedule

Members of the Hamilton County Industrial Development Board gave their OK to the proposed stadium project during a meeting on July 21, but it still requires approval from a few more panels. This is the schedule officials outlined earlier this month:— July 27: Hamilton County Commission agenda session.— Aug 1: Public hearing before the city of Chattanooga Industrial Development Board.— Aug. 3: Hamilton County Commission tax district vote and creation of a new joint sports authority.— Aug 9: Chattanooga City Council tax district vote and creation of a new joint sports authority.

Contact David Floyd at dfloyd@timesfreepress.com or 423-757-6249. Follow him on Twitter @flavid_doyd.

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