Mayor Ron Littlefield said Monday afternoon he is conferring with HUD officials to try to work out a settlement in regard to the controversial Fairmount Apartments in North Chattanooga.
On the mayor's recommendation, the Planning Commission tabled a proposal by the city to rezone the three-acre property from R-3 to RTZ, which in effect would have killed the CHA plan to use $4.8 million in federal stimulus funds to rebuild the complex for low-income residents.
Mayor Littlefield said the settlement would involve "changes to the site, design and density."
The CHA board had held a special meeting last Thursday and authorized Executive Director Elizabeth McCright to file suit against the city if necessary to block the rezoning.
Ms. McCright earlier said the grant funds could not be shifted to another site.
She and architect Craig Kronenberg defended the proposal for the construction of three buildings with 36 units and a total of 57 bedrooms. The current complex built in 1977 is deteriorated, but four families still live there.
Four residents who oppose the CHA project were at the meeting.
The Regional Planning Agency staff had recommended the zoning change to townhouse zoning, and, if approved, the matter would next go to the City Council.
It will be back on the Planning Commission agenda next month, but Mayor Littlefield said a resolution may have been reached by then.