The city on Thursday will submit its plan for an "East Chattanooga Rising" Tax Increment Financing (TIF) District at the former Harriet Tubman site.
The city will be asking the city's Industrial Bond Board to send the plan on to the City Council for its approval.
The project is built around plans by Nippon Paint to invest $59 million on a 28.94-acre site.
Some $4 million in infrastructure improvements are planned at the site, and that would be repaid through dedicated taxes from the Nippon facility.
City officials said, "The East Chattanooga Rising Development area does not include an industrial park, but it does have a qualifying project. For this EIP, the proposed Project, as defined within Tenn. Code Ann. § 7-53-101(15)(A)(ii) and (iv), is an industrial development facility by Nippon Paint Automotive Americas on a 28.94-acre parcel, which is also referred to later on as the "project site." The Project will create 150 jobs and invest $59 million in real and personal property improvements of a LEED-certified facility in East Chattanooga.
"The facility will manufacture and export automotive paint for the North American market, including Canada and Mexico. The Project Site is zoned M1, which allows for the proposed industrial use and is reflected in the attached exhibits, and specifically, the boundary map and legal description is sited on parcel 136E-A-005. Significant public roadway/infrastructure upgrades in the Project Site will be necessary to Hardy, Sherman, Heaton, and Southern Streets, as well as Roanoke Avenue (also referred to as "TIF District Roads). Other future mixed-use projects will also fall within the Plan Area.
"The Project Site and the public infrastructure improvements that benefit the City as a whole are herein referred to collectively as Project. The Project Site which is parcel 136E-A-005 is in close proximity to sites where the City of Chattanooga has made previous investments in public infrastructure: $6 million in the construction of the new Avondale Youth and Family Development Center; $2 million in renovations to Fire Station No. 4 Engine Company; and $2 million in improvements to the Wilcox Boulevard Tunnel. The Project Site and the public infrastructure improvements that benefit the City as a whole as referenced in the above paragraph are herein referred to collectively as “Project.” In order to make the Project financially feasible, the IDB of the City of Chattanooga intends to, subject to the approval of the City Council ("Council") and the County Commission ("Commission"), engage in Tax Increment Financing (TIF) pursuant to Title 7, Chapter 53 of Tennessee Code Annotated to provide funds to pay for the infrastructure improvements associated with the Project.
"The proceeds of the TIF would be used exclusively to pay for all or a portion of the public infrastructure improvements, including the extension of Hardy Street; however if additional TIF funds are available they may be used for any other project or statutorily approved use. The Board will provide financial assistance to the Project by applying the proceeds of the tax increment financing described herein to pay all or a portion of the cost of various public infrastructure improvements associated with the Project as referenced in Section II and for any other projects or statutorily approved expenses. Financial assistance will only be provided with IDB approval for expenditures that qualifies as a statutorily eligible project or expense.
"The amount that will be available by the Board for such financial assistance is currently estimated to be approximately $4 million plus interest estimated to be $1.8 million and the projected total cost of the TIF is provided in the attached Exhibit D and also included as Exhibit E are the anticipated costs of the Project that will be funded by these TIF funds. To the extent additional development occurs in the Plan Area which generates increment above the level currently anticipated, that additional increment may be used by the IDB for other projects and statutorily approved expenditures in the Plan Area.
"The Project will benefit the surrounding properties in several ways. First, it will create jobs within walking distance of local residents. Second, it will enhance the land valuation of the surrounding parcels by revitalizing and bringing economic life to the area. Third, it will encourage additional businesses to relocate to the East Chattanooga area.
"The City of Chattanooga and Hamilton County stand to benefit in many ways from the Project. A description of these benefits is more fully set forth in the attached Economic Impact Study, identified as Exhibit F, which estimates a total economic impact of $426 million dollars in direct and indirect wages and $16 million dollars in local taxes over a 20 year period. The Project forecasts the addition of approximately $59 million dollars in real and personal property to the tax rolls. After a period of tax increment financing, the addition to the tax base is expected to generate approximately $292,000 annually in local tax dollars per year. Furthermore, the Project will directly create approximately 150 jobs and these jobs will result in an addition of more than $147 million dollars in wages during the 20 year period.
"This economic growth will not be limited to the Plan Area. Instead, the economic growth will extend to the surrounding community. Additionally, the Plan Area will be enhanced aesthetically with a revitalized development, significant public infrastructure upgrades, the removal of blight, and the incorporation of a job employment center into the neighborhood. An extended Hardy Street will provide visual sightlines directly to the new facility and provide employees with vehicular, pedestrian, and bicycle access from the main neighborhood artery. This will support area businesses on Glass Street and increase Chattanooga’s tax base, and it is not feasible without tax increment financing."