NASHVILLE — A bill introduced by Sen. Todd Gardenhire, R-Chattanooga, that would end a "brownfield" tax incentive program for new economic development projects in Hamilton County and Tennessee's three other largest counties is triggering alarms among local officials.
Gardenhire said Tuesday he brought the bill because Chattanooga has yet to take advantage of the 2011 law that is aimed at spurring development at previously developed sites that may be complicated by the presence or potential presence of hazardous substances or contaminants.
Pointing to the former Wheland and U.S. Pipe foundries site, located in Chattanooga's Southside area off Interstate 24 near downtown, Gardenhire said, "if you have wealthy investors that are sitting on a benefit that was designed to spur economic development and growth during a recession — and they haven't done anything for a decade with it — and yet we still have to see the ugliness coming around Lookout Mountain into the city, then they obviously don't need that benefit."
Read the details of the bill
A dismayed Mike Mallen, part of the group holding the 141-acre properties, questioned the timing of trying to halt the brownfield tax incentives for new projects just as interest is mounting and plans are being made for redeveloping the entire Southside.
"This is a conversation that involves a district that encompasses [ZIP Code area] 37408 and the economic critical mass has now started moving toward it," Mallen said. "This district finally has a fighting chance after being neglected for a lot longer than we have owned the property."
Chattanooga Mayor Andy Berke, who as Gardenhire's predecessor sponsored and passed the brownfield law, said in a statement that "if you want better neighborhoods, good jobs, and the best possible quality of life for people in our city, you don't walk away — you invest. That's what's working in Chattanooga, and I invite our legislators to join us."
Current law allows cities in the state's four largest counties — Hamilton, Knox, Davidson and Shelby — to take advantage of a county industrial development board to redevelop eligible brownfield sites. The designation lets them utilize certain local sales and property taxes for redevelopment there.
Gardenhire's bill doesn't do away with the program. It turns it upside down by excluding the "Big Four" counties based on population classifications. It adds smaller and mid-sized towns and cities located in counties excluded under current law.
In fact, it allows a redevelopment zone in any county having a population of 336,400 or less, which excludes the Big Four.
An economic study of Chattanooga's entire 400-acre Southside district was done last year and new housing, a new grocery store, a new middle school and commercial projects have been proposed or have begun to be built in the area.
Mallen acknowledged that proposals to relocate the Lookouts baseball stadium to the Southside have been polarizing.
"But we have very little to do with whether that happens or not," he said. "All we can do is to make the land available. But that is the extent of our ability to make it happen or not."
Former Chattanooga Mayor Ron Littlefield has called the proposed baseball stadium on the Wheland site "an iconic gateway feature" for the area.
Mallen said his group donated 12 acres to help extend the Tennessee Riverwalk along the river and has worked to redevelop the former foundries site into a project that will enhance the city, not just make a quick return for the developers who acquired the properties more than a decade ago.
Meanwhile, the bill, sponsored by Rep. Dan Howell, R-Georgetown, in the House, has lobbyists for cities scrambling. It was scheduled to be heard Tuesday in the Senate State and Local Government Committee, but was delayed at Gardenhire's request, pending an amendment.
Chairman Steve Dickerson, R-Nashville, dryly told Gardenhire, "let me thank you, by the way. The lobbying community in Tennessee has been very, very busy with this bill in the last 24 hours. We appreciate that on their behalf."
Gardenhire, who represents part of Bradley County, argued in an interview the law is no longer needed there.
"Because we're in one of the biggest economic expansions, lowest interest rate in history, lowest unemployment in history," the senator said. "So you don't need these benefits for them for the reasons they asked for it. So I want to give clarity to this law and expand the opportunity to smaller and medium-sized counties that were excluded in the first place."
Gardenhire said Tennessee's 91 other counties don't have the advantages of larger counties and thus the original rationale for the 2011 law, which excluded them, now should include them. The city of Cleveland in Bradley County, for example, could now benefit as officials seek to redevelop a huge former industrial site owned by Whirlpool located there, he said.
"They haven't been able to sell it, and this will help them be able to sell it to a developer and develop it for retail space in an area that used to be industrial," Gardenhire said.
Howell said that's the reason why he agreed to sponsor the bill in the House. The lawmaker also said he doesn't plan to move his bill unless the Gardenhire bill gets traction with the Senate version in the upper chamber.
He noted that having a retail development site near downtown Cleveland would be a boon there.
Another provision of the bill would place a 30-year limit on bonds issued for developing a brownfield project. There is no time limit now, to which Gardenhire objects.
Gardenhire also said the original law was drafted narrowly, for example, saying an urban brownfield redevelopment project had to be on land located in a redevelopment zone and include a manufacturing, industrial, distribution or retail "facility" containing at least 1 million square feet.
Meanwhile, the senator didn't appear to mind at all the stir he's creating in the state's largest cities and counties.
"It's the Full Employment for Lobbyists Act," Gardenhire quipped. "They lined up early this morning."
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