It’s old, iconic and subsidizes public transit in Chattanooga, but a proposed ordinance may cause it to shut down.
The Incline Railway — which runs a mile from Chattanooga’s St. Elmo neighborhood to the top of Lookout Mountain — is at the center of a dispute over revenue generation between the Chattanooga Area Regional Transportation Authority and the town of Lookout Mountain, Tennessee.
CARTA, which relies on the profitable tourist attraction to help fund public transportation services in the city and Hamilton County, has threatened litigation if the ordinance is approved.
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The town of around 2,000 residents has characterized the ordinance, which would tax ticket sales, cap daily passengers and reduce operating hours, as necessary to recoup the cost of providing infrastructure — public safety, waste management, etc. — for the Incline’s operation. Up to 1,600 daily visitors use the Incline. Town officials say that number places a significant burden on local services.
Dispute with town threatens to close Incline Railway
Johan De Nysschen, who chairs CARTA’s board of directors, said he was unsure why coexistence between the railway and the town has suddenly become “untenable” after “a hundred-and-something years.”
“It’s been around for so long I would have to say the Incline — and the mountain for that matter — in my humble opinion belongs to not only this entire community but also belongs to the people of America,” he told CARTA staff and other board members at an executive meeting Thursday. “It’s everybody’s mountain, not just a handful of people.”
The Chattanooga Times Free Press received a copy of the ordinance from CARTA staff, who said they were forced to file a Freedom of Information Act request with the town to see the legislation themselves.
Here’s what it does:
— Institutes a $1 fee on CARTA for every passenger who uses the railway, due each month. The fee would rise by 3% each year, and CARTA would be charged an additional $50 for each passenger they fail to disclose to the town.
— Caps the number of passengers who can use the railway each day at 500. CARTA has reported over 200,000 passengers using the Incline in a single year. The max annual visitation under the ordinance would be under 183,000.
— Reduces hours to 10 a.m.-4 p.m. on weekdays and 10 a.m.-6 p.m. on weekends. CARTA’s current hours are 9 a.m.-6 p.m. during winter months and 8:30 a.m.-9:30 p.m. in the summer.
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Attempts to reach Lookout Mountain commissioners were unsuccessful. A call to the town’s local government offices Friday was redirected to Police Chief Dale Tyler, who said the town did not have a comment on the matter.
A law firm representing the town sent out a press release via email, saying the town does not wish to shut down the railway and that even CARTA officials “have repeatedly recognized that compensating the town on a per-incline passenger basis is both fair and necessary.”
The press release further accused CARTA of reneging on a “handshake deal” made in 2024 to pay the town 50 cents per passenger.
In response to CARTA preparing to set aside $300,000 to challenge the ordinance in court, the statement claims the fees would only cost CARTA up to $212,000 each year, which it could pass on to customers by raising ticket prices accordingly.
“Choosing $300,000 of litigation rather than collaboration for mutual benefit would be wasteful of Chattanooga’s taxpayer resources,” the press release says. “The town remains committed to engaging with CARTA to reach a mutually beneficial resolution.”
A mirrored conflict has embroiled the municipality’s sister town in Georgia, also called Lookout Mountain. The Georgia town has dealt with a proposed gondola lift by tourist attraction Rock City, which seeks to place the mountain station within the town’s city limits.
CARTA’s board chair said Thursday he had reached out to Chattanooga Mayor Tim Kelly and Hamilton County Mayor Weston Wamp to help mediate the dispute. Both the city and the county partially fund the transit agency.
A statement attributed to Kelly characterized the proposed ordinance Friday as a short-sighted solution that would hurt the wider community.
“This is one of Chattanooga’s iconic attractions that has been part of this community for generations, and closing it is unthinkable,” the statement said.
A statement attributed to Wamp noted the Incline’s historic presence in Chattanooga and its importance to funding CARTA’s operation.
“I hope a deal can be reached that will allow the Incline to continue to thrive while addressing the concerns of Lookout Mountain leaders,” the statement said.
The town’s commissioners gave preliminary approval to the ordinance in April, while a final vote set for May 12 was postponed in favor of further negotiations with CARTA. The legislation is set for another vote June 9, absent any resolution to the dispute.
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Contact growth and development reporter Raymon Troncoso rtroncoso@timesfreepress.com or 423-757-6317.