Councilman Chip Henderson asks for clarification from the city attorney during a city council meeting Tuesday, July 30, 2019 in Chattanooga, Tennessee. The final vote and public hearing on the Business Improvement District, BID, was held Tuesday, and it passed with six votes for and three opposing.

This story was updated Friday, Aug. 9, 2019, at 6:47 p.m. with more information.

Six owners of property in the controversial Business Improvement District filed suit against the city of Chattanooga early Friday to nullify the ordinance establishing the district.

Siblings Pam Rymer O'Dwyer, Charles D. Paty, Kem Alexander, Ralph Paty, Marion Gaye Paty Wade and fellow property owner William Wise are listed as plaintiffs on the suit against the city that claims the ordinance passed on July 30 violated state statute for establishing such a district.

Charles Paty, one of the siblings and an attorney at Paty, Rymer and Ulin P.C., is representing the group in the lawsuit after watching the arduous BID process this summer.

"I read the statute at the beginning and I followed what they were trying to pass the first time," Paty said Friday. "The biggest defect I saw at that time was the choice to assess fees on square footage, when in the statute it should have been assessed value."

What is the BID?

Commercial and nonprofit landowners in the district will pay an annual assessment of 9 cents per square foot, of either the lot or building size, whichever is greater, plus $4.95 per linear foot of lot frontage. Residential property owners with townhouses or condominiums would pay a flat annual fee of $150 per unit.

Paty said the other "fatal" error in the formation of the district was how quickly a council resolution was introduced after the petition-based attempt to establish the district failed this summer. According to Paty's reading of the state statute, it requires the council to wait a year before reintroducing business improvement district legislation.

The statute, Tennessee Code Annotated 7-84-516(c) reads:

"The governing body shall be permitted to amend the district boundaries only once in order to permit the adoption of such ordinance, and no initiating petition shall be accepted nor initiating resolution adopted by the governing body with respect to the same properties included in the original or amended proposed central business improvement district for a period of twelve (12) months following the failure of passage of such ordinance."

Paty is pushing for the lawsuit to be expedited through the legal process to nullify the ordinance before tax bills are sent in October.

"My dream outcome would be that [the council] clears the ordinance procedurally, and then, if they do bring it back up in a year, they do the assessment the right way, based on tax assessment values," Paty said.

While City Attorney Phil Noblett and council members Carol Berz, Anthony Byrd, Erskine Oglesby and Jerry Mitchell did not immediately respond to requests for comment, Paty said he warned Berz about the lawsuit at a neighborhood meeting Thursday.

Contact Sarah Grace Taylor at or 423-757-6416.