Chattanooga is moving forward with new tax incentive policy

Officials want to keep the process in line with county goals

Staff File Photo by Robin Rudd / U.S. Energy Secretary Jennifer Granholm speaks a 2021 event marking the retrofitting of a former Alstom manufacturing plant for use by Novonix, which makes materials for lithium-ion batteries for electric vehicles. Novonix received a tax break for the project.

Chattanooga city and business officials are in talks to ensure a proposal that includes a change in the way some tax incentives for companies are approved in the city isn't at odds with Hamilton County.

"The plan at this time is for only the city to adopt the policy," said Jermaine Freeman, the interim chief of staff for Chattanooga Mayor Tim Kelly, at a city Industrial Development Board meeting Monday.

But, he said, because the city typically works in concert with the county, officials want to make sure they have a policy that doesn't put Chattanooga at odds with the economic development goals of the county.

Currently, deals allowing businesses to make a lower payment instead of paying their full property tax bill come before the City Council, which votes on whether to approve them and then forwards those to the city's Industrial Development Board.

The draft policy would allow such agreements that don't exceed 10 years and meet certain criteria to go directly to the city's development board to be voted on.

Some worry there will be a lack of transparency if the new policy is enacted.

Helen Burns Sharp, founder of the citizens group Accountability for Taxpayer Money, said at the meeting that the draft policy envisions a greater role for the Chattanooga Area Chamber of Commerce, which is a business advocacy group and the chief recruiter of new companies for the region.

"Who's looking out for us?" she asked. "A lot of people are looking out for business."

Sharp said the wording in the draft assumes "a greater role for the IDB, which is not necessarily bad, and a lesser role for the City Council, which I think is bad, and I think a lesser role for the public."

Joe Paden of the group Chattanoogans in Action for Love, Equality and Benevolence, or CALEB, told the board that having public hearings on the draft policy is valuable.

He said a transparent process is needed along with meaningful standards for evaluating tax agreement applications so the public and its representatives can have a clear picture of whether a proposal is a good investment.

Charles Wood, the chamber's chief executive, said at the meeting that Chattanooga wants to make sure it's competitive with other communities when it comes to economic development incentives.

"Not just incentives, but on process," he said. "Will we be so slow we lose projects?"

Wood said the aim is to create clarity with a limited amount of ambiguity that "allows the process to work and work pretty quickly."

Other Tennessee cities — such as Memphis, Knoxville, Clarksville and Nashville — offer faster processes for businesses with policies set by elected leaders and enforced by development boards, according to the chamber.

Freeman told the board the goal is to ensure the city remains competitive with other cities across the nation.

"It's very much a competitive dog-eat-dog world out there," he said.

Freeman said the city will continue to work with the chamber and also more closely with the county.

"We are looking forward to having some robust conversations with CALEB and our friends from the county and the chamber and get into the weeds as to how our policy can be aligned to address community concerns but also ensure the city remains competitive," he said.

Development board Chair Kerry Hayes said he is hopeful a vote on the draft policy could be taken by the panel at its October meeting. Freeman said he planned to get the proposed policy to board members within 10 days before the meeting.

Contact Mike Pare at or 423-757-6318.