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Staff Photo by Robin Rudd / The steeples of Saint Paul's Episcopal, left, and Second Presbyterian flank the Republic Centre. The YMCA, United Way and the two churches, pictured, don’t want to pay the fees for a new Business Improvement District taking shape in Chattanooga. The photograph was made on February 13, 2020.

The question of whether some nonprofits will be exempt from fees related to the new Downtown Business Improvement District has been kicked back to the committee that initially recommended the organizations be required to pay the fees.

"The motion is to allow the finance committee to reconsider further information from the nonprofits," said Steve Hunt, chairman of the board of directors for the district, during a board meeting on Wednesday. "This group is not voting today; that's the work of the finance committee."

The finance committee does not yet have a date for their next meeting.

Representatives of the four local organizations spoke at the board meeting, including Maury Nicely on behalf of St. Paul's Episcopal Church on West Seventh Street.

"When we met with River City, they said this [exemption process] would be a formality," he said. "That's why we did not oppose this [district]. For us, make no mistake, this impacts people we provide services to."

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Maury Nicely speaks to the board of the downtown Business Improvement District on Wednesday about exempting nonprofits from district fees. / Staff photo by Mary Fortune

In addition to St. Paul's, Second Presbyterian Church on Pine Street, the United Way on Market Street, and the YMCA on West Sixth Street applied last month to be exempt from paying the fees associated with the district. That request was denied on the recommendation of the finance committee, largely because the organizations didn't demonstrate financial hardship, Hunt said.

Total annual fees from those four entities would come to $34,000. In three cases, the annual assessment is less than 1% of the organizations' budgets. In one case, it's about 1%, said Gordon Stalans, head of the BID board's finance committee.

If all 13 nonprofits inside the district were exempted from the fees, it could cost the district $100,000, Stalans said.

"If we start with [exempting] four, how long before we get to 13?" he said.

Board member Pierre Dabit said he thinks the nonprofits inside the district deserve special consideration, given the nature of their service to the community.

How BID fees are calculated

To fund the district's services, 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.

"These organizations have been doing good downtown for decades, and we've been here six months," he said. "I'm not saying we should exempt all nonprofits, but for these four, we should strongly take into consideration their storied history of doing good."

The Business Improvement District was established by city ordinance in July 2019. The contentious process prompted lawsuits and objections by business owners included in the district.

Properties within the district zone pay special assessment fees of about $1 million a year collectively to fund improvements to the central city to make the area cleaner and safer, as well as to fund enhanced beautification and other special projects.

Also at Wednesday's meeting, the board voted to select Steve Brookes as the director of the district, and to set his total compensation package at $130,000 to $135,000. About $100,000 to $110,00 of that would be salary, with benefits making up the rest of the value of the package.

Walk the Business Improvement District

On Tuesday, March 3, from 1-5 p.m., the District's board of directors will meet at the corner of Sixth and Market streets to begin their tour of the district from Sixth Street north to the Tennessee River.

On Thursday, March 5, from 8:30 a.m.- 12:30 p.m., the District's board of directors will meet at the corner of Sixth and Market streets to begin their tour of the district from Sixth Street south to 11th Street.

The walking tours are open to the public.

Brookes has work for the downtown Boston Business Improvement District since 2011. As the district's Clean and Hospitality operations director, he oversees 45 ambassadors and communicates with city of Boston departments, property owners and managers, students, visitors and others to provide services to the 34-block area.

Before working for the Boston district, he was the operations manager for the American Hospitality Academy in Myrtle Beach, South Carolina, worked at the Waterfront Partnership, as well as Downtown Santa Monica, Inc. He attended and graduated from Elon University in North Carolina.

There were 46 applicants for the role, and five finalists interviewed.

Contact Mary Fortune at mfortune@timesfree press.com or 423-757-6653. Follow her on Twitter at @maryfortune.

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