City Board Approves "Crazy" Deal With Developer; City To Get Fair-Market Appraisal And Case Come Back To CDRC After Possible "Negotiations"

Monday, April 10, 2017

A city board on Monday approved what several citizens at the meeting called "a crazy deal" with a developer involving a city-owned parking lot on King Street. The Chattanooga Downtown Redevelopment Corporation added stipulations that the city get a fair-market appraisal of the lot and that the deal come back to the board before it is finalized. There may also be further "negotiations," it was stated.

Julian Bell, one of five CDRC members, said negotiations need to lead to "a pretty high price" for him to approve the deal with developer Hiren Desai, who is offering $134,700 for the lot that the city paid $195,000 for in 2007. A lease-back deal for the city to use the 85 parking spaces for $45.77 per space monthly for three years would net Mr. Desai more than he is offering to pay for the lot - $140,000.

Mr. Bell said, "What is this property actually worth? We need a "straight face" test."

Davld Dalton, who made the recommendation for an appraisal, also said the offering price needs to be raised.

Stacy Richardson, the mayor's chief of staff, acknowledged that the last appraisal was at the time the city bought it in 2007.

She said one factor in the deal is to help spur development along the King Street Corridor. She said the developer is promising a $35 million project that will include a new Moxie Hotel. She said it would bring $780,000 in annual hotel/motel and sales tax revenue.

There is also the possibility of eventually getting a parking deck at the site that the public might also be able to use.

Outgoing City Councilman Moses Freeman said, "We got several proposals. We picked the one that is perceived to be the best use."

Ms. Richardson said the city General Services Department is involved in all the talks to make sure city parking needs remain met.

On the appraisal, Ms. Richardson recommended "that the developer pay for that," but other board members said it needs to be an "independent" audit.

The meeting drew not only members of Helen Burns Sharp's Accountability for Taxpayer Money group, but also other citizens, including three former Chattanooga Times editorial writers.

Pat Wilcox said, "This looks to me like a complete give-away of the city property. That's crazy to me. To hold it 10 years and then take less money - it's insane."

Mike Loftin said the property "is in a prime development site."

Harry Austin told the board, "I can't understand the finances here. Somebody is going to make a lot of money. It seems very fishy."

Cynthia Watson, a Southside resident, called the deal very strange, and Diane McCleskey said, "I really don't understand the financial arrangement of this. On the surface of it, it doesn't look very good at all."

One lady at the meeting offered to pay the city $300,000 for the lot on the spot.

No representative of developer Desai was present at the meeting. 

Franklin McCallie, of ATM, noted that Ms. Sharp had asked for details about the deal, noting that the amount being offered for the property and the lease were not listed on the city website. She was told she would have to file an Open Records request.

Valerie Maleug, an assistant city attorney, said those requesting city information are being told to file Open Records requests in which the city has seven days to respond. Otherwise, she said, "We have to pick and choose who we give information to."

Councilman Freeman defended the delays on information requests. He said, "We are multi-tasking. We have other people to deal with." 

 

 

 


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