Staff Photo by Tim Barber/ An aerial view of the former Alstom site on the east bank of the Tennessee River near Moccasin Bend.

The public recently learned of a new payment-in-lieu-of-tax (PILOT) application for a property tax abatement for Novonix, an affiliate of PUREgraphite LLC. The company plans to purchase the "Big Blue" building at the former Alstom site, create about 300 jobs, and build components for the emerging electric battery market.

PILOTs have come under scrutiny in Chattanooga in recent years, with questions raised about whether we are paying enough attention to what is a good deal and what is not a good deal. Our city and county governments are very dependent on general fund property taxes to pay for needed services, such as fire, police, streets, youth & community programs, and affordable housing. PILOTs (and other forms of tax incentives) reduce general fund revenues.

So we need to make sure that any tax incentive provides significant public benefit and meets the "but-for" test (i.e., determining whether a company would locate here without an incentive).

This company appears to meet several key aspects of the public benefit test. It would create about 300 jobs; it has the potential to create more jobs, and it would give Chattanooga a presence in the sustainability and electrification arena.

The project also appears to meet the "but-for" test. Company officials said they looked at sites in Texas and throughout the Southeast, including Huntsville, Alabama. Likely these places were interested in the project and may have been willing to offer incentives.

The term of the proposed PILOT agreement is 10 years, which is a shorter period than several existing PILOT agreements, including Volkswagen (and suppliers), BlueCross BlueShield, the Provident/Unum parking garage and the Majestic Theater.

Other encouraging features of the proposed agreement include:

' A "Community Benefits Agreement," where the company pledges a good faith effort on recruiting local employees, using local contractors and working with local workforce development partners, and

' "Clawback" language spelling out how the amount of the tax abatement would be reduced if the company falls short on the number of jobs or amount of investment.

During the months leading up to the recent city election, a task force held a series of candidate forums. Members of the Chattanooga in Action for Love Equality & Benevolence (CALEB) task force asked mayoral and city council candidates to commit to more transparency when considering PILOTs, including adopting written policies for jobs PILOTs and holding public hearings before acting on PILOT requests. The response from the candidates was very positive.

This application is better than most previous PILOTs. It is encouraging that Mayor Tim Kelly's office prepared a written staff report to the City Council. It is encouraging that City Council members asked excellent questions. Let's build on this model in the coming months and continue to improve the process for future applications.

This initiative should include codifying the good policies that are already informally in place (such as not waiving property taxes for education or stormwater fees); adding new policies (such as a required public hearing process before the council vote); evaluating the components of community benefits agreements, and having thoughtful discussions on how much jobs should pay to qualify for a PILOT subsidy.

CALEB looks forward to contributing to the conversation with the city council, Hamilton county commissioners, city and county mayor's offices, the Chamber of Commerce and other community stakeholders.

Helen Burns Sharp is the founder of Accountability for Taxpayer Money and is a member of CALEB's economic mobility task force.