The City Council voted Tuesday to approve Tax Increment Financing (TIF) to extend MLK Boulevard across Riverfront Parkway to the Blue Goose Hollow Trailhead at the Riverwalk.
The agreement is with Evergreen Real Estate of Nashville to build the extension across property it has already begun to develop at the site across from the old Newton Chevrolet and Kelly Subaru.
The developer will take out a loan which will be repaid from future taxes from four parcels at the site.
The city is paying $2 million for a strip of land for the road and for "loss of use" of the property.
The roadway is to be landscaped and include bike and walking paths as well as additional parking.
Total project cost was listed at $4.5 million.
The TIF still must be approved by the County Commission. Officials said the TIF would not go forward unless it is approved by both the city and county.
The project was opposed by the citizen watchdog group, Accountability for Taxpayer Money, which said it would have been better to use funds from the Alstom settlement or from the hotel/motel tax.
In an afternoon session, council members talked with city bond counsel about use of the hotel/motel funds. The council was told it was possible to use funds for the project from hotel/motel revenue as long as enough money was left to pay off existing riverfront project debt.
Daisy Madison, city finance director, said the city already pulls funds from the hotel/motel taxes for other projects beyond the debt. She said those include major repairs at the Hard Edge of the riverfront and work on the Walnut Street Bridge and Holmberg Bridge.
She advised against using hotel/motel funds for the extension project.
Councilman Darrin Ledford said after the vote, “As a small business owner, I understand the use of financing tools to achieve short-term and long-term objectives. I discussed my concerns with Mayor Berke, and although I believe no TIF will ever be perfect, the changes made more accurately reflect our adopted TIF policy while protecting the foundational security of our bond issuance for the 21st Century Waterfront plan.
"The focus of tax increments on public infrastructure and not private investment was crucial for me. We all agree the MLK extension is a substantial benefit to our community and completes a long-held vision for our city."
Teresa McCallie told the council she was surprised that the new plan for South Broad Street discusses the use of a TIF for projects there.
She said TIFs were never discussed at plan meetings for citizens in September and October.