Helen Burns Sharp, leader of a citizen watchdog group, told members of the County Commission on Wednesday her group was disappointed that several low-income areas in the county did not make the cut for the new Opportunity Zone tax relief program.
She said in some areas that did, such as the section that includes Cameron Harbor and the one that includes the Enterprise Zone, developers there may have proceeded without the tax break.
County Mayor Jim Coppinger said there was a short amount of time for the county to submit the application for the program included in recent federal tax cut legislation. He said all 10 municipalities were contacted and a group was formed to study which census tracts should be submitted.
He said 17 were submitted from Hamilton County and seven were included in the program. He said Shelby County and Davidson County got more because they have more poverty areas.
Ms. Sharp, of Accountability for Taxpayer Money, said, "The “Opportunity Zone” program was created by the federal government as part of the recent tax cut. It creates a federal tax incentive for investors to reinvest their capital gains in low-income neighborhoods as defined by poverty rate and median family income from the 2010 Census.
"Hamilton County, with input from municipalities and the Enterprise Center, recently prioritized for “OZ” designation several census tracts that are already attracting developer interest, like Downtown, MLK/UTC (including the Innovation District), the Erlanger area, the South Broad area, and the Westside, including Cameron Harbor and the former Alstom site.
"These developers might not have needed the opportunity zone incentive to convince them to move forward with their plans. On the other hand, the incentive might have been a determining factor to persuade someone to invest in a "real " low income neighborhood.
"Areas that could have been selected as Opportunity Zones but were not include East Chattanooga, Avondale, Glenwood, Orchard Knob, Ridgedale, East Lake, Brainerd, and East Ridge. Neighborhood leaders wonder if this tool might have spurred development, such as the building of a grocery store in the East Chattanooga/Avondale area.
"ATM is disappointed that several low-income census tracts did not make the cut. However, we do realize that the County was under tight deadlines in coming up with its list and wanted to include census tracts where they believed development would occur. We hope the lesson learned from this experience is that the selection committee for a program such as this should include representatives from neighborhoods that would or could be impacted and whose leaders are familiar with neighborhood needs. Opportunity Zones--Where We Can Go from Here
"The county now has the "opportunity" to adopt policies that would help residents of neighborhoods within the selected census tracts if and when developers take advantage of the Opportunity Zone incentive. One tool used successfully in other places is a Community Benefits Agreement. A CBA is a project-specific agreement between a developer and the local government that spells out the project’s contributions to the neighborhood. The terms of the CBA would be project specific, depending on the neighborhood. Here are some possible examples of what developers might be asked to do:
· commit to at least 20 percent of construction workers being targeted employees; · provide dollars for job training programs for residents; · seek partnerships between local industry and residents for addressing employment; · set aside a percentage of new housing units that would be affordable; · provide on-site space for a child care center as part of new development;
· contribute dollars to project/program at the neighborhood Recreation (YFD) Center;
· contribute dollars to project/program at a nearby school, and
· increase lighting in the neighborhood or improve sidewalks.
· "Additional policies could be added where there is displacement of current residents · due to gentrification. I feel sure there would be several organizations and neighborhood groups who would be happy to work with the County in suggesting policies. I hope the Commission and Mayor would welcome their ideas."