Kore officials
The city's Health, Education and Housing Facilities Board voted 6-1 on Wednesday in favor of a PILOT (payment in lieu of taxes) for a $2 million apartment project on Chestnut Street.
The five-story, 220-unit apartment building is planned on the Southside near Main.
Officials of the Kore development firm said they carried out a similar project in Birmingham without a tax abatement. They said that development was in the suburbs and the current one has higher land costs and parking expenses.
Kim White of the RiverCity Company said the location is on foundry sand and there will have to be over $1 million of site work.
She said the bank lending the money will not go forward without the PILOT.
The current assessment is $162,000, and taxes are some $8,000 per year. The abatement would be $3.5 million over 10 years, plus an additional amount for four years as the rate is stepped up to full payment of taxes at the 15th year.
The location at 1400 Chestnut is 180 feet north of West Main.
The 1.62-acre property is owned by Marshall Berry, but the developers have an option on it.
The facility will have ground floor parking for 192 vehicles.
The entrance to the parking level is proposed to be from Chestnut Street.
Currently, access to the site is from Chestnut Street.
“Main Terrain” public park is adjacent to the site on the east side.
Helen Burns Sharp, a critic of the local tax abatement program, addressed the board at the start of the meeting.
She said,"This board has waived over $5 million in local property taxes since the housing PILOT program began in 2002.
"The two projects you are being asked to recommend today may be the largest tax abatement requests ever.
"Currently, you don't have tools in your toolbox on how to evaluate requests. And you have no staff analysis that frames the issues for you.
"That might mean that you make decisions based on whether you like the project.
You might also be influenced by the names of prominent Chattanoogans somehow associated with these projects. Names like Kinsey, Hays, Probasco, Berry, MacClellan.
If these were the appropriate criteria, I would vote yes if I were in your shoes.
"But I believe there are other, more appropriate criteria.
"The question before you is whether the taxpayers should be required to participate in these projects.
- Should we be paying for fire, police and other services to these buildings for 14-16 years?
- Should tax dollars that could otherwise be directed to high priority community projects instead be reserved for the developers' bottom line?
- Would you feel comfortable explaining to other developers of market rate apartments around town why they have to pay taxes but these projects don't?
"Here are a few criteria you might want to use in your deliberations:
#1) Is the project eligible for a PILOT under state law?
- Public purpose for HEB Pilots--low-mod, elderly, handicapped. No mention of market rate, workforce, or student housing.
- The Maclellan project includes ground floor commercial/retail space. Has you attorney given an opinion that these components are eligible?
#2) Does the project provide significant PUBLIC benefit?
#3) Would the project happen without the subsidy? (the but/for test)
- On the Chestnut Street project, the zone change process is already underway, which could lead one to believe that it's a go.
- Is this 210 unit project similar to their 215 unit apartment project underway in Birmingham? Is B'Ham, providing a tax incentive?
"The housing PILOT process begins and ends with this board. I hope you have a good discussion at this meeting.
"The public is counting on you to be good stewards of taxpayer dollars.
"Thank you for your service."
Kim White and Helen Burns Sharp