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Buildings inside a proposed Business Improvement District are seen on Tuesday, April 16, 2019, in Chattanooga, Tenn. The proposed district would encompass downtown Chattanooga from the Riverfront to 11th Street and from U.S. Highway 27 to different areas bordered by Cherry Street, Lindsay Street and Georgia Avenue.

Property owners who haven't paid annual Business Improvement District fees won't owe interest or penalties through June, though the fees were due in October and became delinquent in March.

The district fees didn't appear on city tax bills online, and many property owners were unaware they owed them, said Steve Hunt, the chairman of the board for the district during a board meeting Wednesday.

"Many property owners didn't know," he said. "There's been a concerted effort to reach out."

Through April 9, the Business Improvement District had collected $686,000 in fees, and was owed another $226,000. The board is waiting for more current collection data from the city, Hunt said Wednesday.

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Contributed image from the Chattanooga Business Improvement District / A map of the areas that fall within the borders of the Chattanooga Business Improvement District (BID) as of February 2020.

In the meantime, the director of the district, Steve Brookes, has worked to get in touch with owners of the 63 properties that have outstanding fees due, and the city is sending notices by mail to property owners about the unpaid fees.

Brookes has also been talking one-on-one with representatives of four nonprofit organizations that have requested exemption from Business Improvement District fees, Hunt said. Total annual fees from those four entities would come to $34,000.

A planned meeting of the board's finance committee to discuss those exemption requests was postponed because of the coronavirus crisis, and it has not been rescheduled.

"We agreed it would be good to go out and listen specifically to what their concerns are, so I know Steve [Brookes] has been working on that," Hunt said.

The board is making final changes to a $625,000 contract with Block by Block, the vendor that will provide services and oversee the district's 14-member ambassador program. They should be ready in July to launch programs in the downtown district, Brookes said.

"They're ready to get down here and get things figured out," he said. "It's about a five-week process, but we're getting some things accomplished in advance so maybe we can shorten that time."

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.

The board reviewed the results of a survey on improvements needed in the district that reflected a desire for more cleaning, landscaping and signage in the central downtown area. Brookes has met with Chattanooga Public Works officials to begin understanding where responsibility for those improvements will lie, he said.

In their meeting Wednesday, the board also agreed to rebrand the Business Improvement District as the Downtown Chattanooga Alliance, and set a $5,000 limit on purchases Brookes can make in his role without board approval.

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.

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

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