Staff Photo by Robin Rudd/ Senator Todd Gardenhire answers a question. Members of the Hamilton County Legislative Delegation spoke to the Times Free Press at the newspaper's offices on November 15, 2019.

State Sen. Todd Gardenhire, R-Chattanooga, wants to change state law regarding business improvement districts after a messy year of votes, revotes and a lawsuit surrounding Chattanooga's first such district.

The Scenic City's district, which was formed this summer by a council resolution introduced less than a month after the initial petition-based ordinance failed, immediately hit a hurdle after six citizens filed a lawsuit, claiming the formation violated state law, which mandates the council wait a year between revotes on the formation ordinance.

The legal controversy spawned uncertainty in the BID's ability to collect its $1 million in special assessment fees from property owners for safety and visual improvements as the county and city determined who would do collections.

Now that the district is underway with the lawsuit dismissed, bills sent and a leadership board established, Gardenhire is looking to change state law to clarify the BID formation process.

"We're going to attempt to make it so you get one shot at it and that's it," Gardenhire said Friday of clarifying the murky legislation in the 2020 legislative session.


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.

Gardenhire said the decision comes after he spoke to the judge who reluctantly ruled in favor of the city in the lawsuit, which alleged the reintroduction and ultimate passing of the ordinance establishing the Chattanooga BID was improper, earlier this month.

"Everything in my gut tells me I should rule in favor of the plaintiffs on this," Hamilton County Chancellor Jeffrey Atherton said at the Nov. 1 hearing, calling for clarification to the state law. "But, even though [the formation ordinance] seems like an end-around, it doesn't seem to violate statute."

In his decision, Atherton determined that since the first introduction was a petition-based resolution and the state law prohibiting reintroduction pertained to council resolutions, the district did not violate state law, though the argument "smelled bad."

Gardenhire had previously announced plans to introduce legislation allowing state representatives and senators to opt into service on the boards and to address exemptions from the district.

Under a state law from the 1990s, Gardenhire and Rep. Robin Smith, R-Hixson, are required to serve as ex-officio members of the governing board, which will oversee Chattanooga's controversial new community development district.

"Rep. Smith and I are on this board, not because we wanted to be, but because of this act from the '90s," Gardenhire told the Times Free Press after the board's first meeting in October. "In that same act, we were supposed to be a part of any 'recommendation' that was made about the board anything to do with the BID."

Contact Sarah Grace Taylor at 423-757-6416 or or on Twitter @_SarahGTaylor.