Lawsuit Filed Seeking Information On Legal Ruling On Aetna Mountain TIF

Friday, February 1, 2013

A Chancery Court lawsuit has been filed against the City Industrial Development Board (Bond Board) seeking information on a legal opinion involving tax increment financing (TIF) for a major project on Aetna Mountain.

The lawsuit was filed by retired planner Helen Burns Sharp, who has been closely following the TIF application and who opposed it at several public meetings.

The City Council, County Commission and Bond Board approved a $9 million TIF for the Black Creek group that plans a major residential development with a town center on the huge tract above Cummings Cove in Lookout Valley.

The funds were designated for construction of an improved road up the mountain along with a main sewer line.

The Bond Board approved the TIF with the stipulation that a legal opinion be issued stating that the Black Creek group request met state requirements for TIFs.

TIFs allow a developer to issue bonds that are later paid off through a portion of the taxes generated by the project. The Black Creek group said if the project fails to generate the taxes, then it would be required to repay the funds.

The suit, filed by attorney John Konvalinka, says Ms. Sharp on Nov. 6 asked for public records related to the legal opinion. It says Ms. Sharp was provided a copy of a letter dated Oct. 31, 2012, from George H. Masterson of Bass, Berry & Sims, an attorney for the Black Creek group.

The complaint says a second request for records was sent Dec. 5, 2012, to City Attorney Mike McMahan. The suit says there was no response to this request.

The suit says Ms. Sharp then sent letters to individual members of the Bond Board asking if they had gotten any correspondence about the Black Creek TIF.

On Dec. 12, 2012, Ms. Sharp was provided a second letter from the firm of Bass, Berry & Sims, it was stated.  

She said she was told by City Attorney McMahan that any other documents related to the TIF were subject to attorney-client privilege.

Another request for records relating to the TIF was sent Jan. 9. The suit says there has been no response to this request.

Attorney Konvalinka said all of the requested records fall under the Tennessee Open Records Act.

He said the city "has willfully refused to disclose the public records requested by Petitioner, even though Respondent knows that the records contained therein are public."

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