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Staff photo by Olivia Ross / The proposed site for the new Chattanooga Lookouts stadium is seen from Point Park on Lookout Mountain on July 6, 2022.

As they prepare to consider establishing a special tax district for a multiuse stadium on the former Wheland Foundry site on the Southside, Chattanooga City Council members approved a resolution Tuesday making clear the municipality is not required to follow procedures outlined in a 2015 policy governing tax increment financing.

The city's 2015 policy spells out the process private developers must follow to receive approval for their applications, which includes paying a fee and filling out an application, but it explicitly states that the rules don't apply to the city, which can follow procedures that it "deems appropriate under the circumstances."

Under a tax increment financing agreement, a portion of the new property taxes generated by a project over a period of time is set aside to pay for public infrastructure or other associated improvements.

Jermaine Freeman, senior adviser for economic opportunity under Mayor Tim Kelly, said the City Council approved that policy several years ago to improve oversight and transparency for private developers seeking assistance from a special tax district.

"This policy was adopted, as the language states, for private developers only," Freeman told council members during their agenda review meeting Tuesday. "It was never meant to be the overall, overarching document that would govern when the city of Chattanooga or the Chattanooga Housing Authority submitted a request."

The resolution states that council is "authorizing the exemption of the city of Chattanooga from certain procedures of the application process" for the proposed stadium project. Councilman Chip Henderson, of Lookout Valley, questioned why the council needed to affirm exemptions already included in a city policy.

"I don't understand why we need a resolution to confirm what our policy already says," Henderson said. "We're voting on a resolution to follow the policy. I don't understand why we don't just follow the policy."

Freeman responded that city staff wanted to follow a similar procedure to the one followed in 2019, when the municipality was considering a special tax district for the Nippon Paint facility planned in East Chattanooga. That was also a city-initiated process.

"We quickly realized that as we submitted the application, the city would need more flexibility than was allowed for private developers," Freeman said. "So we saw a similar resolution in 2019."

Deputy City Attorney Phil Noblett also weighed in on that question.

"One concern that lawyers always get whenever you're dealing with resolutions that were passed in 2015 and 2019 is that y'all might change your mind at some point in time," he told council members. "The concern here is that we need to have something at the time that this TIF is considered and will be valid, and that is the reason for requesting it to be done. Because it was done in resolution in 2015, it was does in resolution in 2019, we're asking that it be done again."

Staff added Tuesday that they are in the process of drafting agreements with potential development partners in the stadium project and are also assembling a community benefits package.

The council approved the resolution by an 8-1 margin with Councilwoman Jenny Hill, of North Chattanooga, casting the lone vote against. She did not say why but had raised concerns earlier about transparency.

Contact David Floyd at dfloyd@timesfreepress.com or 423-757-6249. Follow him on Twitter @flavid_doyd.

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