A proposal for a Tax Increment Financing (TIF) District to pay for a $9 million road up Aetna Mountain to a planned $70 million residential and commercial community there next goes to the City Council and County Commission. It earlier gained approved from the City Bond Board.
A TIF involves the creation of a district in which all of the property taxes collected in the year before the TIF is created are the base year taxes. After the district is approved, the incremental increase in taxes in property in that district in later years is dedicated to paying bonds issued for the TIF.
George Masterson, bond counsel for the Black Creek Mountain development team, said the idea of a TIF is to jump start the development of a project with increases in tax collections in the future as the district is developed.
The Aetna Mountain TIF requires approval by the city and county in addition to the bond board. There must also be a publc hearing.
Attorney Masterson said under the TIF plan, the limit on bonds is $9 million and the maximum time period for the district is 20 years.
The development team includes Brant Enderle, Gary Chazen, Alfred Smith, Mike Mallan and Doug Stein. Mr. Stein said the site "may be the most important piece of land in our community remaining to be developed."
He said the property is as high as Lookout Mountain, flatter and has more acreage than the town of Lookout Mountain, Tn. He noted that it is now all within the city of Chattanooga with recent annexation.
He stated, "This is really developing another small town."
Mr. Stein said the group searched for the right developer and selected York Capital, represented by Mr. Enderle with Henry & Wallace, who does the development for York Capital.
He said construction of the road up the mountain is a necessity for the project. He said, "No developer in this current environment could build something like this without some kind of help."
He said the developers have committed contracturally to giving away 1,200 acres for the construction of public facilities and for the River Gorge Trust. He said some 1,300 acries will end up in conservation easements. He said about 1,600 acres will be developed.
Mr. Stein said the group could have cut the parcel into 5, 10, 15-acre farms with nothing but gravel roads. He said, "This land is too important for the city of Chattanooga to let this happen."
He said, "There have been a lot of folks on the Internet who thought that there has been some sort of conspiracy between Masterson and Zach Wamp and folks like that to do this." He said, "Zach does not have anything to do with the project."
Mr. Wamp lives at Cummings Cove near the foot of the Aetna Mountain Road.
That road has been the subject of much litigation, and Chancellor Howell Peoples ruled a number of years that it is a public road.
A number of off-road vehicles regularly travel the road to the top of Aetna Mountain.
Mr. Stein said there is room for 1,400 to 1,500 residential units on top of the mountain based on a low density. He said the group plans at least 200,000 square feet of commercial space that includes public recreation facilities, assisted living, resort and lodge facilities and a corporate retreat center. The houses are to be in different price ranges, starting at $185,000.
He said the group has set aside corporate office space, land for the public school system, a town center, an office park and space for restaurants.
Mr. Stein said, "It is basically eight minutes from downtown, which is much different than people's perception."
He said the first phase of the road up the mountain to the crest of the mountain will cost $6 million. He said the balance of the money will be spent on the spine road going into the village center. He said the spine road does not have residential lots along it.
Mr. Enderle said he anticipates it will take up to 30 years to build out the project. He said the group would have a hard time absorbing more than 60 houses per year.
He estimated the project will create 500 jobs.
He said the developers would essentially be buying the bonds.
Attorney Masterson estimated that the project will generate about $17 million for the county schools over 20 years.