Tubman TIF - Not Yet Ready For Prime Time

Wednesday, November 13, 2019
A wise man once wrote that reading about tax increment financing is about as exciting as watching paint dry. Yes, it is boring, but it is important that the city use this tool wisely to create economic development opportunities and to build community trust.

On Thursday, Nov. 14, at 11 a.m., the Industrial Development Board (IDB) will hold a public hearing regarding a proposed TIF district centered around the former Harriett Tubman housing site in East Chattanooga. 

Unlike in the community's first two TIFs, the city government, rather than a private developer, is the applicant.

State law gives IDBs a major role in TIFs, including requiring the board to hold this public hearing on the Economic Impact Plan (EIP). 

My organization, Accountability for Taxpayer Money (ATM), supports the concept of this TIF.
Unlike the first two TIFs, this one meets a "blight" test and the "but/for" test. Here the TIF can be a catalyst for development that likely would not happen without the tax incentive.

However, we believe there are questions and concerns that need to be dealt with first before the IDB votes to send this TIF on to the City Council and County Commission. It is not yet ready for prime time.

ATM believes that the Plan Area (TIF boundary) should be expanded. Currently, it is narrowly drawn to include only the former Tubman site and residential properties along Southern Street.  Certainly, these are appropriate, given that the area includes the Nippon Paint site (which will provide the major tax increment) and the portion of the former Tubman site fronting on Roanoke Avenue, which will likely become mixed-use. 

However, it seems short-sighted not to include within the TIF boundary other properties in the neighborhood that may redevelop over the 20-year life of the TIF. These include vacant parcels on Dodson Avenue and the former Buster Brown plant on North Chamberlain Avenue, which is currently being looked at by developers. It seems like we would want to be able to use the new taxes (increment) from these redevelopments to do more projects in the neighborhood.

All of the Projects identified to be paid for with TIF revenues are street improvements. Public infrastructure is a common use of TIF funds. However, what seems uncommon here is that there are no descriptions or cost estimates for the improvements to be made to Roanoke, Southern, Hardy, Sherman, and Heaton Streets. Will these streets be repaved? Will sidewalks be improved or added? Are street lights contemplated? Where will the individual street improvements begin and end?  

The Economic Impact Plan (EIP) says the public improvements are expected to cost $4 million. Where did this number come from? The EIP says that interest is estimated at $1.8 million, which is 31 percent of the total cost. Can that percentage be lowered so that more money can go towards projects? 

Nippon Paint has not yet begun construction. The City has until the end of next year to establish the TIF district to capture the increment for tax year 2020. There is no urgency to act. 

Please press the pause button to allow time for more community dialogue about the questions raised above. The RPA's Historic River to Ridge Area Plan is nearing completion. It covers all of East Chattanooga. A Tubman Opportunity Steering Committee has been formed. Let's build on these grassroots efforts and refine the TIF project so that it works for all of East Chattanooga and restores trust between the neighborhoods and their city government.

Helen Burns Sharp

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