Amid the hot housing market, Red Bank is taking steps to prevent developers from subdividing the 6.4-square-mile city's limited commercial properties to accommodate multiple detached single-family homes.
"The issue arose on the heels of the requested subdivision of the parcel often referred to as the Save A Lot site in the White Oak section of Dayton Boulevard," City Manager Martin Granum said at the city commission's Tuesday work session. "While that request is now withdrawn, it called to attention the possibility of our larger commercial properties being subdivided for single-family housing."
For the 374 properties in the city's convenience commercial zone, permitted uses include houses as well as apartments above ground floor shops. Large parcels also can be subdivided to accommodate multiple homes, according to the city's zoning ordinance.
The city has three large commercial properties - all shopping centers previously anchored by grocery stores - that are underutilized, including the former Save A Lot shopping center, Mayor Hollie Berry said in a phone interview.
"Economic incentives are continuing to tip in favor of houses over any other type of development, so we are reaching a tipping point in Red Bank where it would be economically viable to purchase one of our large, underutilized commercial shopping centers, tear everything down and subdivide it into a single-family residential neighborhood right on Dayton Boulevard," Berry said.
But that's not the intended use for those properties, and it's not what citizens want, she said.
Citizens are clamoring for more restaurants and businesses, said Berry, adding that she constantly receives calls from business owners who want to move their operations to the city. But there are only a limited number of commercial properties available, and using those properties for houses would deprive the city of the sales tax revenue and higher property tax revenue from businesses.
"Yes, we need housing, but we need to do it in a smart way," she said.
Red Bank needs market-rate housing that workers making "Chattanooga-type" wages can afford, which would consist of higher-density, multifamily housing rather than houses, Berry said.
Homeowners in single-family residential neighborhoods usually don't want multifamily housing in their neighborhoods, so multifamily housing is better suited for the commercial district, she said. Higher-density residential units also provide more customers for businesses located in multiuse developments.
In February, the Planning Commission voted 3-2 to recommend approval of developer Rise Partners' request to rezone the 7.1-acre property at 2102 Dayton Blvd., the location of the former Save A Lot shopping center, from a commercial district to a neighborhood commercial zone to allow for townhomes on part of the largely vacant shopping center.
A proposed amendment to the zoning change that would have allowed only nonresidential development fronting Dayton Boulevard failed by a 3-2 vote.
Rise Partners, which owns the property, withdrew the rezoning request before it went before the City Commission for approval.
"We are working on plans for the property and undergoing feasibility studies," Rise Partners co-owner Geoff Smith said by email.
Berry said that while townhomes are preferable to detached single-family homes, they are still not the best use of commercial property. Residents at the meeting also spoke about the need to preserve the city's limited commercial space over building single-family homes most Red Bank residents could not afford.
"It seems like the developer has taken that feedback to heart and is going back to the drawing board to create a new proposal," Berry said.
Southeast Tennessee Development District planners worked with the city's Planning Commission to develop an ordinance that would placed several limitations on detached single-family dwellings in the commercial zone.
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That ordinance was tabled for additional discussion when it came before the city commission in May.
Only 81 of the 374 properties in question would allow for detached single-family homes under that ordinance, and city officials agreed that its scope was "too expansive," Granum said.
Ruth Jeno was the only commissioner on the five-person board to vote no on the revised ordinance when it was first put up for vote Tuesday. She said she wanted the ordinance to go before the Planning Commission before being considered by the commission.
The ordinance would not affect the old Red Bank Middle School property, which is in the central business district. Proposals submitted by developers for that property have included developments consisting of single-family detached dwellings, which some commissioners and residents felt was not the best use of the large parcel owned by the city.
The final vote on the ordinance is at 6 p.m. June 21 in the Red Bank courtroom, 3117 Dayton Blvd.
Contact Emily Crisman at ecrisman@timesfreepress.com or 423-757-6508.