The Woodlawn apartment complex is located off of Dodson Avenue.

Memphis developer ALCO Management has withdrawn its request for a tax break to purchase and overhaul a pair of Chattanooga apartment complexes after a citizens group raised concerns regarding a connection between the properties and Mayor Andy Berke's father.

Last week, the city's Health, Educational and Housing Facility Board reviewed ALCO's payment-in-lieu-of-taxes (PILOT) proposal and is scheduled to consider the company's request for $7.5 million in revenue bonds in two weeks. The project involves a $6.4 million investment to rehabilitate 163 apartments at Woodlawn Apartments and Windsor Terrace, located at 2300 Wilson St.

On Tuesday, ALCO officials confirmed the company still planned to go forward with rehabilitation efforts despite withdrawing from the PILOT application process earlier in the day. The company had been scheduled to make a presentation to the Chattanooga City Council on Tuesday afternoon.


"Due to timing constraints associated with other aspects of our financing for Woodlawn, we felt it was best to withdraw our PILOT application at this time." ALCO President Robert Hyde said in an email. "We remain committed to the rehabilitation of Woodlawn apartments and plan to start that work shortly."

Berkeley Burbank, vice president of development for ALCO, cited concerns with both timing and "the amount of uncertainty surrounding the PILOT program now" in a phone interview.

The proposed PILOT called for 10 years of tax breaks on improvements made to the properties, followed by a five-year phase-in period in which the developer would pay 20 percent of the full additional tax value in the first year and 100 percent in the fifth year. In return, ALCO promised to make all the units affordable for low- and medium-income tenants.

A PILOT could still happen in connection with the apartment complexes.

"We believe a PILOT will provide substantial additional benefit to the property, its residents and the community and plan to resubmit our application at a later date," Hyde said.

Accountability for Taxpayer Money has asked the city to use an independent party to evaluate the PILOT, partly because Marvin Berke, the mayor's father, is a partner in the group who owns Woodlawn Apartments.

"ATM believes our City Council needs to have an outside financial review by someone who understands these complicated programs and can advise from a public interest and tenant's perspective," Accountability for Taxpayer Money member Tresa McCallie said last week.

The mayor's office did not comment on the matter last week. The office did confirm Stacy Richardson, Berke's chief of staff, issued an email directing staff members not to discuss the project.

Contact staff writer Paul Leach at 423-757-6481 or Follow on Twitter @pleach_tfp.