This story was updated with more information at 4:39 p.m. on Monday, Dec. 2, 2019.
Chattanooga's Industrial Development Board approved a proposed Tax Increment Financing district Monday on the site of the former Harriet Tubman housing development, though two residents of area neighborhoods asked that the process be slowed and the boundaries expanded.
"The City Council has already put this one on their agenda for tomorrow," said Everlena Holmes, a Glenwood neighborhood advocate and executive director of Enroll the Region, a volunteer organization that helps vulnerable people get access to health care. "No wonder I continue to hear citizens say, 'What good does it do to speak up when they have already made up their mind?'"
Nippon Paint is expected to build a 270,000-square-foot facility on 29 acres of the 44-acre site beginning in the first quarter of 2020, bringing 150 jobs to East Chattanooga over the next 5-7 years. The proposed tax increment financing district includes the site where Nippon will build, as well as the remaining 15 acres around it.
Chattanooga City Council member Anthony Byrd called the approval of the district "amazing news," though he said he also knows it will be impossible to make everyone happy.
"I definitely understand their reservations — I get it, I have those same reservations," he said. "But look at the type of money that's going to be attracted from this project and give us more bang for our buck. Afterwards, we'll see other development come in, and we can come back later and expand the district if needed."
Now that the Industrial Development Board has authorized the creation of the Tax Increment Financing zone, the City Council and County Commission also need to vote on the district. The topic will be on the City Council agenda on Tuesday, Dec. 3. There are three state entities that must also sign off before the zone can take effect.
Within the district, taxes paid on the property are invested in infrastructure improvements to the tax increment financing zone to attract development to the area. Eligible improvements include elements such as roads, sidewalks, landscaping and lighting, which create a more attractive site for further development. Over the next 20 years, Nippon will pay $11.4 million in taxes, with about $4 million going to improvements to the zone, according to estimates from the city.
Industrial Development Board Vice Chairman Jimmy Rodgers abstained from the vote, saying he has concerns about the timing of the decision. "I'm bothered by the rush," he said. "We're being told it's on the City Council agenda tomorrow. To me there needs to be a slowdown here, so for that reason I abstain."
Charita Allen, the city's deputy economic development administrator, said the plan has been six years in the making, and community involvement has been an essential element of the process.
"We have continuously listened to the community throughout," she said. "None of this process has been done in isolation."
One issue Holmes raised in the public hearing Monday was the work of the Historic River to Ridge planning committee, which has a draft plan in public review stage now through Dec. 18. The committee will make land use recommendations for the 11.4 square miles bounded by Missionary Ridge and the Tennessee River, including a proposed village center at Glass Street and Chamberlain Avenue as well as redevelopment of the former Buster Brown plant on North Chamberlain Avenue.
"They will need infrastructure investment," Holmes said. "For East Chattanooga to rise, all parts of East Chattanooga must be positively impacted."
But delaying the implementation of the tax district and expanding its boundaries would both have negative consequences, said Jermaine Freeman, economic development officer for the city. Improvements to the site will begin soon, which would increase the base property tax rate that the tax increment financing calculation is based on, he said. Freezing that rate now — while the property is not generating any tax revenue — means more tax revenue becomes available later for infrastructure investment, he said.
"The larger you make the TIF district, the more you spread the investment and lessen the impact," Freeman said. "You have to take the same amount of available money and spread it over a much larger area."
Contact Mary Fortune at firstname.lastname@example.org or 423-757-6653. Follow her on Twitter at @maryfortune.