One Westside tax district in Chattanooga to help support over $198 million in public improvements

Staff Photo / Part of The Bend in downtown Chattanooga is shown in this 2010 aerial photo. The property formerly held Alstom manufacturing operations.
Staff Photo / Part of The Bend in downtown Chattanooga is shown in this 2010 aerial photo. The property formerly held Alstom manufacturing operations.

A special tax district proposal tied to Chattanooga's One Westside plan calls for more than $198 million in public improvements such as roads, sidewalks and other infrastructure at The Bend mixed-use development along Riverfront Parkway, documents show.

But not all of those improvements would be paid for using tax increment financing, a business incentive that sets aside added tax revenue from a new development to pay for infrastructure to support that development.

Jermaine Freeman, interim chief of staff for Chattanooga Mayor Tim Kelly, said in a telephone interview on Friday that the estimated value of the TIF — potentially the biggest-ever in the city — is upwards of $115 million. That includes "a substantial contribution" from the TIF that would go to advancing the Westside Evolves plan to redevelop the city's oldest and biggest housing project across Riverfront Parkway from The Bend, Freeman said.

(READ MORE: Special tax district eyed on downtown Chattanooga's Westside)

A week ago, Chattanooga and Hamilton County leaders unveiled the One Westside plan to help revitalize 300 acres. The plan includes thousands of new homes, more than 1 million square feet in commercial space and future downtown educational opportunities.

The proposed development would be aided by designating about 120 acres at The Bend as a TIF district, setting aside a portion of the new tax revenue generated over the next 20 years to help pay for the planned infrastructure, education opportunities and housing, officials said.

In a TIF district, property taxes normally paid to the city and county on the enhanced value of the property are diverted to instead pay for infrastructure to support development, though all the revenue normally set aside for public school funding will be protected, officials said. TIF districts are aimed to aid in promoting new development, especially in blighted areas, and generating added growth.

  photo  Contributed Map / The 120 acres at The Bend off Riverfront Parkway is shown in light brown adjacent to the Tennessee River. Just across Riverfront Parkway in red is the city's largest housing project.
 
 

On Monday, the city's Industrial Development Board will be asked to accept the application of Chattanooga developer Urban Story Ventures for the TIF district on The Bend, which for many years held manufacturers Combustion Engineering, General Electric and Alstom.

If the board accepts the application, the City Council and County Commission will be expected to review it the following week, Freeman said.

An application review committee also will look at the potential TIF district, and a public hearing will be set up later, he said. In addition, the developer is expected to prepare an economic impact plan for review, Freeman said. He said approval would be expected to occur well before the end of this year.

Jimmy White of Urban Story Ventures said earlier he envisions more than $800 million of new development at The Bend.

(READ MORE: Special tax zone proposed to spur redevelopment of The Bend and Chattanooga's Westside)

"Without the TIF, this transformation would not be possible," he said. "It's key to building out the substantial public infrastructure needed to support these 120 acres while simultaneously supporting affordable housing, education and community services."

According to documents submitted with the TIF application, "the city and county will be missing out on key opportunities ... for new jobs and economic development to occur in a timely manner" without the district.

Bend officials don't anticipate using any TIF revenue to pay for expenditures for improvements owned by the applicants or private parties, documents said.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.

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