Reason and benevolence may yet prevail.
On Feb. 26, board members of the Downtown Business Improvement District (BID) will revisit their earlier decision to assess the four nonprofit organizations within the BID boundary. That is good news.
As it stands now, the new BID board is prepared to assess the YMCA, the United Way, St. Paul's Episcopal Church and Second Presbyterian Church. Each of these entities has been deemed tax-exempt by the state.
Had Chattanooga followed the lead of some other cities in developing its BID assessment formula, this would not be an issue. Nashville's ordinance, for example, says that the assessment applies only to taxable real property, making it clear it does not apply to tax-exempt nonprofits and government-owned properties.
In Chattanooga, commercial and nonprofit landowners in the BID area are set to 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.
Chattanooga's ordinance reads that nonprofits must pay the assessment unless they can demonstrate substantial financial or economic hardship.
The BID board, which has the sole discretion to determine hardship, should declare these four entities exempt this year and for all future years. Here is why.
* This is a BUSINESS improvement district. These four nonprofits are not businesses.
* The BID boundary was drawn in a way that exempted St. Peter and Paul's Church, which abuts Patten Parkway on the eastern boundary, but included Second Presbyterian and St. Paul's and the Y, which abut the western boundary.
* The stated BID mission is to promote the continued revitalization of downtown, thereby furthering the health, safety and general welfare of downtown Chattanooga. The nonprofits are already active in areas related to this mission.
For example, representatives from Second Presbyterian Church make the case that the nonprofits are good stewards of their properties with regard to keeping them clean, which is a key BID objective. They point out that a BID assessment would have to come out of their benevolence fund, meaning the church would have to do less community outreach, such as operating a men's shelter or contributing to Metropolitan Ministries and the Community Kitchen.
BID board member Donald O'Conner, the lone vote so far to exempt the nonprofits, pointed out that these organizations are uniquely positioned to respond to neighborhood needs important to the BID board.
"When special needs come up, those groups are capable of getting volunteers organized to do things, and that is more important than money," he said.
I am not a fan of exemptions when it comes to taxpayer dollars. However, the BID is a private initiative that does not involve taxpayer dollars. But the public does have the right to weigh in because state law required the City Council to pass an ordinance to create the district.
Here's hoping that the BID Board will do the right thing and exempt the nonprofits.