The Chattanooga Housing Authority board approved a resolution on Thursday afternoon authorizing its executive director to take legal action if necessary against the city of Chattanooga over the issue of the Fairmount Apartments.

A resolution passed by the board at a brief meeting said action by the City Council on the CHA property in North Chattanooga "seriously affects both the viability of the proposed development, as well as the CHA's property interest in the existing apartment complex" and is harmful to the interest of low-income housing residents.

Mayor Ron Littlefield, who strongly opposes a plan by the CHA to use a $4.8 million federal stimulus grant to rebuild the current development, fired back at the city agency in his State of the City Address later Thursday.

He said, "I have to say that it is difficult to understand why our own housing authority would wish to take a step backward and build, once again, a public housing development that concentrates and isolates the poor in a location that lacks the needed elements such as access to public transportation and other qualities that give the residents options and add to hope and optimism.

"Whatever else can be said about the proposed high density housing development at the steep and narrow end of Fairmont Avenue, it unquestionably will look and feel like public housing. No one takes issue with the need for public housing in general or the utility of the Fairmont site in addressing the community’s overall goal of inclusion with safe and livable housing for everyone, but the development as proposed ignores the lessons learned over the decades since World War II and offers a 50-year retreat in thinking. It must not be built as currently planned and designed.

Mayor Littlefield also said, "The coming decade will demand that we retain a high standard of livability and that means housing that is inclusive – where people of mixed incomes, colors and cultures can live in harmony and in proximity to one another. Where the aging and infirm can feel that they remain a vital part of their neighborhood. Henry Cisneros’ plan for replacing despair with hope is the correct approach.

"In recent years, the Chattanooga Housing Authority has stumbled and staggered from one developmental and financial disaster to another. They do not need to repeat the sad experience, yet they seem determined. In their diminished economic condition, they do not need to be wasting resources hiring lawyers to fight the very city that they were created to serve. Most importantly, as we move into the decade ahead and as we as a community continue to strive to set a national example of quality of life, strong neighborhoods with safe and livable housing for everyone, Chattanooga needs a partner not a problem child.

"Accordingly, I stand ready to offer the Housing Authority more appropriate and affordable office space in closer proximity to City Hall, additional development sites and other assistance to seek our mutual goals. However, if the Chattanooga Housing Authority is to survive in the decade ahead and serve out its greater purpose, it will require a new attitude and new leadership. We need a partner, not a problem child."

The City Council took action to move to rezone the property and also set a 120-day building permit moratorium at the site.

CHA officials said they need to act quickly on the project or risk losing the grant.

Here is the resolution passed by the CHA board at the special meeting:

RESOLUTION 10 -

AUTHORIZING THE EXECUTIVE DIRECTOR TO TAKE ACTIONS AS NECESSARY TO PRESERVE THE CHA’S PROPERTY INTEREST IN THE FAIRMOUNT AVENUE APARTMENTS

WHEREAS, in September 2009 the Department of Housing and Urban Development [“HUD”] awarded a grant of $4.8 million dollars pursuant to the American Recovery and Reinvestment Act to the Chattanooga Housing Authority [“CHA”] for the purpose of demolishing the current Fairmount Apartments, a public housing development and for the creation of a new environmentally-friendly and energy efficient public housing apartment complex; and

WHEREAS, shortly after the grant award elected officials and neighboring residents on Fairmount Avenue expressed concerns to the CHA that the proposed development was too dense, did not have enough green space, was not child-friendly, and would cause traffic issues on Fairmount Avenue; and

WHEREAS, in an effort to respond to these concerns the CHA redesigned the project by lowering the unit count from 48 to 36 [thereby reducing the density from the current apartment complex on the site], increased the green areas in order to create childrens’ play space, and engaged a traffic study that revealed that the development would have a de minimis effect on traffic on Fairmount Avenue, and subsequently in November 2009 received approval from HUD for the revised development plan with a reduction in total grant award of $600,000 to $4.2 million; and

WHEREAS, in response to continued pushback by elected officials, in December 2009, HUD Headquarters dispatched two Tennessee HUD officials to the site to review the topography of the site and the concerns raised by the elected officials, after which visit, HUD reaffirmed its approval of the proposed 36 unit development; and

WHEREAS, on January 5, 2010, without notice to the CHA, the Chattanooga City Council voted to authorize the staff of the Chattanooga-Hamilton County Regional Planning Agency to initiate a zoning change for the Fairmount Avenue Apartments located on Fairmount Avenue and owned by the Chattanooga Housing Authority from R-3 Residential Zone to R-T/Z Residential Townhouse Zero Lot Line Zone and to declare a moratorium of 120 days on issuance of new building permits relative to the Fairmount Avenue Apartments, all in contravention of the Cooperation Agreement by and between the City and CHA, the Comprehensive Plan 2030, and the Hill City-Northside Neighborhood Plan and

WHEREAS, the CHA believes that this action by the City Council seriously affects both the viability of the proposed development, as well as the CHA’s property interest in the existing apartment complex should the zoning change become effective; and

WHEREAS, the CHA believes that the interests of low-income public housing residents are compromised by the City’s actions;

BE IT THEREFORE RESOLVED that in defense of our mission to serve the housing needs of people of low income, our Charter, and our interest in preserving our physical assets, the Board of Commissioners of the Chattanooga Housing Authority hereby authorizes the Executive Director to take any and all actions to preserve the CHA’s property interest at the Fairmount Avenue site, including but not limited to pursuing any and all necessary legal remedies with HUD approval, the immediate renovation of the existing apartment complex with HUD approval, the return of the remaining grant funds to HUD should it be determined that the grant funds cannot be used for the intended purpose due to the City’s actions, and any other actions necessary to effectuate the intent of this resolution.

BE IT FURTHER RESOLVED that this resolution be effective immediately.

Here is a CHA executive summary relating to the Fairmount Apartments:

Executive Summary

Fairmount Avenue Property

In September 2009, HUD awarded the CHA a stimulus grant of $4.8 million dollars for the purpose of demolishing the 28-unit Fairmount Apartments and replacing it with a new environmentally friendly, energy efficient public housing apartment complex with 48 units. Shortly thereafter, elected officials and neighboring residents on Fairmount Avenue expressed concerns with the proposed development stating that it was too dense, did not have enough green space, was not child-friendly, and would cause traffic issues. Since that time, the following ensued:

CHA redesigned the project by lowering the unit count from 48 to 36, increased the green areas to create childrens’ play space and engaged a traffic study that revealed the development would have minimal effect on Fairmount Avenue traffic
HUD approved the revised development plan in November, reducing the grant by $600,000 to $4.2 million
Continued opposition by a local official prompted HUD Headquarters to dispatch two Tennessee HUD officials to the site to review the topography and other expressed concerns, after which HUD reaffirmed its approval of the proposed 36-unit development
Without proper notice to the CHA, the Chattanooga City Council voted on January 5, 2010 to authorize the Regional Planning Agency to initiate a zoning change for the property from R-3 Residential Zone to R-T/Z Residential Townhouse Zero Lot Line Zone, and to declare a moratorium of 120 days on issuance of new building permits relative to the Fairmount Avenue Apartments, all in contravention of the Cooperation Agreement between the City and CHA, the Comprehensive Plan 2030, and the Hill City Northside Neighborhood Plan.

The CHA believes this action by the City Council seriously affects the viability of the proposed development, as well as CHA’s property interest in the existing 28-unit complex. It also compromises the interests of low-income public housing residents.

In defense of our mission to serve the housing needs of people of low income, our Charter, and our interest in preserving our physical assets, we are asking the Board to authorize the Executive Director, with HUD approval, to take any and all actions necessary to preserve the CHA’s property interest at the Fairmount Avenue site, including but not limited to:

Filing of legal actions
Immediate renovation of the existing apartments
Negotiation with HUD of alternative uses for the grant funds
Return to HUD of the remaining grant funds upon recognition that funds cannot be used elsewhere