The Chattanooga City Council on Tuesday passed new rules for tax breaks to spur economic development and approved a tax break agreement for a 10-story development on the 700 block of Market Street.
The council has discussed the new rules for so-called tax increment financing - or TIF agreements - for months. And the vote was delayed last week to give the public more time to give council members input.
Helen Burns SharpGenerally, the TIF agreements allow the city and county to build infrastructure - or even partially fund developments - in advance and then get reimbursed by the extra property tax collections for developments over time.
Accountability for Taxpayer Money - a group of concerned residents led by tax break watchdog Helen Burns Sharp - had asked the city to make some changes to the resolution, and some of them were adopted.
Councilman Chris Anderson, who leads the council's economic development committee, thanked the group for their input, saying many of the suggestions have been implemented.
The group wanted the city to include provisions that would require developers seeking such tax breaks to pay for independent economic impact studies of their developments up front to ensure the projects required public aid. And the group asked for stronger "claw back provisions" - rules to recoup city funds if projects fall through.
Anderson said after the meeting he couldn't say exactly which ATM suggestions were accepted, but "more than half were either incorporated or already in the document."
Councilman Ken Smith said during the meeting he was pleased to see the rules in effect.
"This is something we've needed for a very long time, so I'm happy that we are at the point where we actually have it," Smith said, adding the rules could be changed in the future if need be.
The council also gave the city's Health, Education, and Housing Development board authority to negotiate a tax agreement for a retail and apartment development at 728 Market St. The development will have retail at the bottom floor, offices on the second, and parking on the third floor, according to the agreement.
Parking will be for 125 apartments on higher floors.
The developer, TSO Chattanooga Development, will have its taxes on the property frozen for 10 years, and then increased in 20 percent increments over the following four years. Although it will pay a full share of its school taxes throughout the agreement.
The Hamilton County Commission will also have to sign off on the agreement.
Contact staff writer Louie Brogdon at lbrogdon@timesfreepress.com, @glbrogdoniv on Twitter or at 423-757-6481.