Two decades after Chattanooga redeveloped the downtown riverfront with its 21st century waterfront plan, city and county leaders Friday announced an even more ambitious effort to revitalize 300 acres of the Westside with more than 1 million square feet of commercial space, thousands of new homes and a new riverfront park.
The One Westside plan unveiled Friday would create a special tax zone to help spur redevelopment of The Bend development and provide funding for a possible new downtown vocational school and the redevelopment of Chattanooga’s oldest and biggest housing project.
Officials said the plan sets aside 9 acres for a new riverfront park on what is now known as The Bend, owned by Urban Story Ventures, which is redeveloping the former Combustion Engineering site.
The city has been working with Urban Story Ventures and Hamilton County Mayor Weston Wamp for nearly a year to “ensure that this transformative development will be something that will make us all proud,” Chattanooga Mayor Tim Kelly said at the announcement.
“This project essentially adds a whole new neighborhood to Chattanooga and transforms another, so it’s not a stretch to call this a generational opportunity,” Kelly said.
Of the new homes planned, at least 10% of all rental units in The Bend footprint would be reserved for residents making 80% or less of the median income for the typical Chattanoogan, Kelly said.
Developers Jimmy White, Chuck Chitty and Hiren Desai bought the 121-acre former Combustion Engineering and Alstom property in 2018 from GE Power for $30 million and have renamed the area The Bend. The new owners recruited battery maker Novonix to locate in one of the former Alstom plants and have developed a number of medical and other office projects along Riverfront Parkway.
The developers are preparing to build more than 400 housing units in the first phase of their development and will build a 200,000-square-foot office building overlooking the Tennessee River, White said Friday. Ultimately, White said he envisions more than $800 million of new development at The Bend, which was once the site of Chattanooga’s biggest manufacturing employer — Combustion Engineering.
As an equipment supplier for nuclear and other power plants, Combustion Engineering once had more than 5,700 employees at its Riverfront Parkway facilities, but cutbacks in power plant construction ultimately led Combustion’s successor — Alstom Power — to close the plant.
“This community-focused partnership will allow us to revitalize the Westside — an area once known as an epicenter for business and prosperity,” White said at an announcement of the proposed development Friday.
The redevelopment of the property along Riverfront Parkway and Main Street will be aided by the designation of a tax increment financing district, which will set aside a portion of the new tax revenue generated in the 120-acre-plus area during the next 20 years to pay for infrastructure, education and affordable housing, Kelly said.
In such a district, property taxes that would normally be paid to the city and county on the enhanced value of the property are diverted instead to pay for infrastructure to support the new development. TIF districts are designed to aid in promoting new development, especially in blighted areas, and generating new growth.
During their term, TIF districts divert tax money that would otherwise go for police, fire and other local government services from city and county coffers to be used to pay instead for the development costs. Proponents of the financing mechanism say it only captures new revenue — that is, tax money that would not have existed without the development.
“Without the TIF, this transformation would not be possible,” White 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.”
The Bend will be the sixth TIF district established in Hamilton County — five of which have been established within the past four years. In each of those districts, property taxes are still paid to support local schools, but other new taxes are used for public infrastructure or special projects, such as the funding for the new Lookouts baseball stadium on the Southside.
Unlike the previous TIF districts approved for Black Creek Mountain, East Chattanooga, the Southside and downtown, the new district for The Bend will designate some of the extra tax collections to be used for helping projects outside of its footprint.
Under the proposed agreement, 53% of the extra property tax revenues generated by the development, other than the school tax portion of such taxes, will be used to help the Chattanooga Housing Authority fund its Westside redevelopment, along with providing funding for some of the cost of a new downtown school, fire hall, and stormwater and sidewalk upgrades downtown.
The Bend is across the street from the site of College Hill Courts, Chattanooga’s oldest and largest public housing project. The Chattanooga Housing Authority is developing plans to rebuild and redevelop the area as part of its Westside Evolves plan, which officials hope can attract federal grants for both replacement and additional housing and related development.
The proposed TIF agreement should help the city apply this summer for a $50 million federal grant from the U.S. Department of Housing and Urban Development as part of the Choice Neighborhood Implementation program, housing authority Executive Director Betsy McCright said at the announcement.
If successful in obtaining the HUD grant, the Westside area also could receive multiple awards of low-income housing tax credits through the Tennessee Housing Development Agency to build new low-income and workplace housing and related development to help offer more needed downtown housing, McCright said.
“The return on investment of these dollars will resonate for generations,” McCright said, noting the Westside Evolves plan could spur up to $1 billion of new investment on the housing authority’s property in addition to more than $800 million of projects at The Bend.
Hamilton County has more than 3,000 acres of property now in TIFs and, if approved by the city and county, the new one will be the third downtown special taxing zone created to spur development following the one at the end of West M.L. King Boulevard and the much larger zone at the former U.S. Pipe/Wheland Foundry site on the Southside where a new Chattanooga Lookouts stadium is planned.
Hamilton County still has fewer TIFs than Knox County, which has 30, or Davidson County, which has 15, according to the Tennessee Comptroller’s Office.
Wamp, who was critical of the TIF package negotiated for the Chattanooga Lookouts stadium on the Southside, voiced support for The Bend project, which he said has been structured to do more to help spread the wealth by focusing on affordable housing and educational funding, in addition to commercial and upscale housing.
“This agreement represents a new approach to economic development in which the priorities of the citizens of Hamilton County and the city of Chattanooga are aligned closely with the developers,” Wamp said Friday at the announcement.
Wamp wants to build a new vocational school downtown on the 11-acre Golden Gateway building on West M.L. King Boulevard that BlueCross BlueShield of Tennessee is selling. The proposed school would be just a few blocks northeast of The Bend and over time could receive millions of dollars of funding from the TIF for its development.
The proposed TIF agreement announced Friday will be reviewed next month by both the Chattanooga Industrial Development Board and the Hamilton County Industrial Development Board at their next public meetings. The plan will then be referred to the City Council and County Commission for approval.
Contact Dave Flessner at firstname.lastname@example.org or 423-757-6340.