Are You Paying Someone Else's Tax Bill? - And Response

  • Tuesday, September 27, 2016

When Mayor Littlefield's administration and the city's Chattanooga Downtown Development Committee trumpeted the public private partnership with the developers for  Walnut Commons, LLC, in 2006, citizens were excited. After the city CDRC board acquired several public land parcels near the Riverfront (valued at $2.3 million in 2006), they worked a deal with Walnut Commons, LLC to allow them to build an apartment complex and public parking deck. A small percentage of apartments were to be offered to qualified low/moderate income citizens. In return, the city would offer the project a no tax PILOT with reduced rate lease payments. After years of waiting for the deck and reduced rate housing to be built in 2010, citizens now find they have been duped by not only the developers, but by the city employees and elected officials who were supposed to be watching the city's assets. There is no parking deck. There was no program to check and verify if low/moderate income people benefited from this project.  

A review of the public documents show startling failures on many fronts. While common sense dictates the parking deck and reduced rent housing should be mandated by contract, it did not happen. What is crystal clear is WC will pay no school tax and no county or city property taxes until 2025. How many average citizens can imagine being lucky enough to skip 20 years of paying taxes on a $9.7 million building, while collecting high rents on tiny apartments?  WC also received additional help from HUD to acquire bank loan money with HUD mortgage insurance. Many normal working citizens must fork over mortgage insurance money with no public assistance and still pay all city and county property taxes. Many now want to know, where is the big public benefit that justifies the 20 year no tax status?  

Most citizens live in a world where their actions, good or bad, have consequences. Government board members, elected officials and the professional level high compensation city employees (city attorneys, city of Chattanooga's chief financial officer to name a few) which do their bidding should operate under the same standards.  

Although anyone serving on the CDRC board should not require the following advice, their voting actions indicate they may need it. First and foremost, if you cannot read and understand a contract, for heavens sake don't sign or vote to approve a contract. Now for advice for those considering service on any city board which oversees contracts over $1,000.  If you are nominated for such a board and cannot read and understand contracts, please politely decline to serve. If you can read contracts and you continually vote to approve projects that conclude costing the city financially, you should step down from the post immediately.  If you are an elected official that appoints board members, you should review the projects your board member is approving to see if their decisions make sense. While anyone can make a mistake, most decisions they approve should make sense. If they don't, do your constituents a big favor and replace the board member. It's your responsibility to do so.   

City attorneys, heads up. It's your responsibility to write good contracts that protect the citizens' interests. Approving and forwarding contracts to city board members and elected officials, that have been written wholly by the developer's attorney aimed 75-90 percent in favor of the developer, is just plain wrong.  

Mayor Berke, it is your job to replace city attorneys that fail to understand which side they represent. Please know that while this Walnut Common debacle began on the watch of the previous administration, it has continued on your watch as well. The Walnut Common contracts have been amended numerous times on your watch to the full advantage of the developers.  

City Council, if the mayor has lost control of his employees and appointed or hired city attorneys that work in league for the developers, it's your job to protect us from contract negligence. Remember the purpose of an executive and legislative branch goes back to checks and balance of power to project the citizenry. It's an old system that works, unless you forget your role or value campaign contributions of developers or corporations more than the needs of citizens.  

Citizens please consider this example. One city council person, who also serves on the CDRC, voted to approve yet another favorable Walnut Common contract last week. Before the vote he stated publicly it was a bad deal for the city and voted to approve it anyway. Councilman Moses Freeman was elected to city council from a district full of low income citizens living in marginal housing. His reason for voting was basically "a deal is a deal."  Newsflash: A "deal is a deal" only if both parties have held up their sides of the bargain. By voting to approve yet another contract change in WC's favor, he was derelict in a duty to his district and his city. The CDRC meeting where the unanimous vote was cast was both pathetic and appalling.  

Citizen you must do your job. You should pay attention to what goes on in your city and cry out loudly when you become aware of government incompetence. There is no better time to pay attention than now. The next election is March 2017. Many representatives are running for re-election. A few (based on their records) deserve to be re-elected, while some should be escorted home and banned from running for office for life.  

As you are contacted by those running for office, plan ahead to ask some tough questions. Here are a few questions to consider.  

"Did you ever vote to increase my taxes?"
"Have you ever voted for a PILOT tax break for a big corporation?" 

(Keep in mind if they are running for re-election, they all have served a minimum of four years and some have served eight or more years.) There have been several PILOTs.  Ask this question: "Can you name three PILOTs you voted against?" If they cannot name them specifically, they will change the subject. If they don't, fact check what they tell you.  

Citizens, the final attempt to correct these problems all comes down to your voice and your vote. You elect these people and you can put them out or back in. Don't sit home election day and don't vote blindly based only on thin air. That's part of the reason we have the problems. We all have a duty to correct this problem. 

Deborah Scott
Chattanooga 

* * * 

Thanks to Deborah Scott for the reminder that we the people--as well as our elected and appointed officials--have an important role to play the development and monitoring of good public policy. 

Ms. Scott provides a thought-provoking analysis of the Walnut Commons PILOT debacle. I find it mind-boggling that a city board (CDRC) last week ignored a third party legal opinion that explained why they had a choice on allowing the tax break to continue another nine years.  

Helen Burns Sharp
Chattanooga


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