A new agreement between the city of Chattanooga and Hamilton County will revitalize 300 acres of downtown riverfront, expand downtown education opportunities and create more affordable housing for more than 2,000 residents of Chattanooga’s Westside, local officials say.
Called One Westside, the proposal will also enhance public infrastructure along 3,000 linear feet of the Tennessee River, say Chattanooga Mayor Tim Kelly and Hamilton County Mayor Weston Wamp.
One Westside also includes more than 1 million square feet of commercial space, thousands of new homes and 14 acres of new green space – including 9 acres for a new riverfront park on what’s now known as the Bend.
Of the new homes, at least 10% of all rental units in the Bend footprint will be reserved for residents making 80% or less of the area median income.
“Our approach will provide a long-term boost to every resident’s quality of life and will go the distance toward addressing our residents’ housing, education and employment needs for decades to come,” says Kelly. “This project adds a new neighborhood to Chattanooga and transforms another, so it’s not a stretch to call this a generational opportunity.”
“This agreement represents a new approach to economic development in which the priorities of the residents of Hamilton County and Chattanooga are aligned with the developers,” adds Wamp. “Urban Story Ventures President Jimmy White and his team care about our community and understand the importance of public education to the future of our local economy.”
The new One Westside partnership, which includes the City of Chattanooga, Hamilton County, Hamilton County Schools, Chattanooga Housing Authority and Urban Story Ventures, will leverage tax increment financing (TIF) to create and capture new tax revenue from the redevelopment of brownfields.
As part of the TIF, additional funding from the new revenues will create new downtown education opportunities through a partnership between Hamilton County, the city of Chattanooga and the Hamilton County Department of Education.
Through Urban Story Ventures’ private development of the industrial site once occupied by Combustion Engineering, Alstom and GE, the city and county expect the TIF and the city’s Westside Evolves initiative (a $1 billion effort to replace obsolete housing units with new affordable housing) to unlock a minimum of $800 million in new development over the next 10 years.
This activity will support the construction of public infrastructure, educational opportunities and new affordable housing, say city and county officials.
Tax increment financing
Tax increment financing is a funding tool cities and counties use to revitalize blighted and under-utilized properties, such as the former home of Combustion Engineering, Alstom and GE.
As the improvement and development of these blighted properties increases their taxable value, the local government sets aside a portion of the increase in property taxes to help fund public improvements in the area – improvements that further catalyze the development.
The One Westside TIF will last 20 years per parcel. During this time, the city and county will continue to collect all existing property taxes. Each will set aside only a portion of new revenues property owners pay to help fund approved projects.
After the TIF expires, the city and county will collect and distribute all existing and all new tax revenues as usual.
Of the county’s portion of new property tax revenue, the county will reserve 53% for downtown education opportunities, with the remaining funding being allocated to the TIF.
Of the city’s portion of new property tax revenue, the city will reserve 53% for funding Westside Evolves, downtown education opportunities and a new fire station.
The city will allocate the remainder of its funding to sidewalks, roads, stormwater, light poles and other public infrastructure improvements.
By leveraging private development to fund the project, the city and county will be able to grow their tax base and provide additional services without raising taxes, say officials.
As with most TIFs, the developer is backing the agreement, meaning Urban Story Ventures will invest its own money in public infrastructure and will be reimbursed only when the property begins generating incremental tax revenue.
“This community-focused partnership will allow us to revitalize the Westside – an area once known as an epicenter for business,” says White. “This transformation would not be possible without the TIF. It’s key to building out the public infrastructure needed to support these 120 acres while also supporting affordable housing, education and community services.”
Westside Evolves
One Westside will provide revenue to reimagine public housing in the city, enabling the city to execute its Westside Evolves plan. Westside Evolves will replace obsolete housing units while also building a mix of new housing types across the Chattanooga Housing Authority’s 115-acre footprint.
The plan was developed with input from 82% of Westside’s more than 2,000 residents.
The Chattanooga Housing Authority will use its portion of TIF proceeds to apply for HUD’s Choice Neighborhood Implementation Grant, which could provide an additional $50 million to the Westside. If the authority is successful in obtaining this grant, it could lead to multiple awards of 9% low income housing tax credits from the Tennessee Housing Development Agency.
The Bend
The Bend is 120 acres of redevelopment led by Urban Story Ventures, a local commercial real estate company that will take advantage of the site’s potential along the Tennessee River to redefine the scale of downtown Chattanooga.
As an adaptive reuse project that will incorporate the site’s natural and industrial history, The Bend will be designed to feature new public parks and green spaces, as well as new commercial, entertainment and residential options.
Next steps
The proposed agreement will be reviewed for completion by Chattanooga’s Industrial Development Board at its next public meeting. It will then be referred to the City Council and County Commission for a resolution of intent at their public meetings.
Afterward, an application review committee will review the content of the application for the Industrial Development Board. This will be followed by a public hearing before the Industrial Development Board.
After the public hearing before the Industrial Development Board, the City Council and County Commission will take a final vote, as well as establish an intergovernmental agreement between the city and county outlining the terms of the project.
Learn more at OneWestside.info.
Sources: City of Chattanooga;
Hamilton County; Urban Story Ventures