NASHVILLE - Gov. Bill Lee has included a $725,700 grant to help Chattanooga officials secure downtown Tennessee River front property seen as critical to build on the area's past successes and promote additional development and bring more people to the thriving area.
The grant is a single item in a $2.66 billion amendment the governor unveiled last week, which he hopes lawmakers will include in his originally proposed $52.6 billion budget. His amendment also provides funding for dozens of programs and projects across the state, including a $500 million grant to help Tennessee Titans owners build a new covered football stadium.
Chattanooga officials hope to combine the state's $725,700 portion and a $725,759 portion provided by the city and the nonprofit River City Co. to assist in paying the Tennessee Department of Transportation $1.45 million for easements on three parcels owned by the city, River City Co. and the Chattanooga Downtown Redevelopment Corp.
The property, alongside Riverfront Parkway with some of it underneath the Olgiati Bridge, is now used as a parking lot. The parcels were part of a series of land swaps between the city and state dating back years. The parcels included a portion of the old state Highway 58, which was rerouted. But the state continues to own the easements. There is a deed restriction that the property be owned by a public entity or serve a public purpose because federal money was included in construction of Highway 58.
In his Jan. 5 letter asking for the money, Chattanooga Mayor Tim Kelly told told Lee obtaining the funds would allow the property to be put to "its highest and best use" in future redevelopment.
Emily Mack, president and chief executive of River City Co., said in a statement to the Times Free Press last week that she's grateful for the inclusion of the waterfront-related funds in Lee's amended budget.
If the proposed amendment with the provision passes as part of Lee's annual spending plan, then River City Co. along with the city of Chattanooga will continue with the steps outlined in the riverfront planning process, Mack said.
"We are thankful for the over 2,300 comments we received from the community during the visioning process and will continue to receive feedback from the community as we proceed with the plan," Mack said.
Concerns have been raised by some groups including, Friends of the Hooch, which manages Head of the Hooch, the annual two-day rowing regatta held annually on the Tennessee River during the first full weekend in November. Hooch leaders question whether River City's possible use of the parking lot for development could pose problems with rowing shells, oars, spectators and athletes' parking and access to the river.
Other major draws like Ironman competitions and the Riverbend Festival could also be affected, the letter states.
Mack told the Times Free Press in a February phone interview that there's no proposal to develop the lot, and any such use is at least five years out. The idea of mixed-use, mixed-income development came from residents who expressed during the planning process a desire for more places to live and socialize in the riverfront district, she said.
While the surface lot could present a "potential opportunity," Mack said, she also pointed out that attracting and retaining signature events such as the regatta and Riverbend Festival remain a priority and "top of mind for us."
She said the financial assistance from the state to remove the deed restrictions on the parking lot is the first step of many, providing ample time to work with organizers and others who use that space to ensure "they can continue to host amazing events in the riverfront along with developing a long-term plan for the site."
If the money doesn't come through, River City Co., the nonprofit organization created in 1986 to aid in the redevelopment and revitalization of downtown Chattanooga, still owes the state nearly $260,000 in parking lot revenues over the years.
"I think that River City was getting some proceeds from parking that they did not realize they were not supposed to be getting the revenues from," Senate Finance Committee Chairman Bo Watson, R-Hixson, told the Times Free Press last week in an interview outside the Senate chamber. "And so they had to pay back those revenues, that was just a mistake that they made.
"And then there's a piece of property down there that they would like to use, and the funding is in the budget for that. But there's still some conversation going on about that," Watson said.
Sen. Todd Gardenhire, R-Chattanooga, has previously raised concerns about developing the parking lot, citing limited parking in the area and whether any property actually can be used for development such as homes or businesses. He told the Times Free Press in February that to take the lot at Riverfront Parkway and Power Alley and potentially turn it over to a developer for building something like condominiums would be "a disservice to the tourist industry in town."
Efforts to reach Gardenhire to discuss his latest thoughts about the project and Lee's proposed $725,700 grant were unsuccessful late last week.
Issues about River City Co. getting some parking lot revenues began well before Mack took the helm of the nonprofit group in late 2020.
Mack said in a telephone interview Friday that River City Co. will repay the estimated $260,000 it received in parking lot revenue in the past.
That leaves the remaining issue of the parcels making up the parking lot.
Under the agreement, River City Co. would provide $355,473 for the fair market of the easement. The city of Chattanooga would put in $370,276.50 as its share for a total of $725,749.50. Lee's provision, if approved, would provide another $725,670.50, bringing the total payment to TDOT for the easement to $1,451,420.
Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.
Mike Pare contributed to this report.