Mark West, president of the Chattanooga Tea Party, speaks to media in this August 8, 2014, file photo. Some conservatives and government watchdogs say the River City Co. is too cozy with the Chattanooga and Hamilton County governments when it comes to the city's tax break program for downtown housing.
Chattanooga Tea Party President Mark West and tax abatement sleuth Helen Burns Sharp say there's a conflict of interest because elected and appointed city and county officials who ultimately approve payment-in-lieu-of-tax agreements that River City negotiates also sit on the River City board.
River City negotiates PILOT agreements for downtown housing for the city and county. Then those agreements are approved by the City Council, County Commission and the city's Health, Education and Housing Facilities Board.
County Commissioner Joe Graham sits on the River City board, as do City Councilman Chip Henderson and HEB board member Dana Perry. The city and county mayors are also on the River City board, but they don't vote on PILOT agreements.
West says there's a need for independence between River City and the local governments.
"You have members of an elected body - the commission and council - who are voting 'yes' or 'no' on projects. But then some of those same members are on the board of the organization that is definitely wanting a 'yes,'" West said. "It just seems like a foregone conclusion that it's going to pass."
Sharp has a similar view.
She said River City developed the housing tax break program.
"And they are the ones who sold it to the city and the county, and they are the ones who accept the applications - and they are advocates for the program or the individual PILOTs. So how can you be on that board and [the council or commission]?" Sharp said.
But Kim White, president of River City Co., said there's no conflict. River City is on the same side as the local governments. And no money is changing hands.
"We are not funded by the city or the county, but for 30 years we have been a partner of the city to grow downtown," White said. "We are not compensated by the developer; we are really acting as the city's partner."
Henderson said Friday that he also didn't think there was a conflict.
Sharp said it's not about money flowing between River City and the local governments. Developers are the ones getting to avoid paying millions in property taxes. The issue, Sharp said, is that the tight links between the governments and River City leave no one looking out for the public's interest.
She added that the city and county legislative bodies approved the criteria for the PILOT program River City follows.
White said dual membership in office and on the River City board doesn't guarantee a vote in favor of PILOT projects. Henderson voted against a recent 14-year PILOT for UTC Five, a 64-unit apartment complex in the 500 block of Lindsay Street.
Graham and Perry both said they didn't feel beholden to River City on projects.
"If River City was profiting in any way by these PILOT agreements, then I could see a conflict of interest. But not only are they not profiting, but Hamilton County or Chattanooga don't give River City any money," Graham said.
West said even if nothing improper is going on, it still looks that way, and that's the issue.
"It's important to maintain not just integrity, but the appearance of integrity, especially when we talk about elected officials."
Contact staff writer Louie Brogdon at lbrogdon@timesfreepress.com, @glbrogdoniv on Twitter or at 423-757-6481.