Chattanooga Seeking Public Funding for Key Downtown Waterfront Land

Chattanooga is seeking more than $725,000 in public funds to cover costs associated with a downtown waterfront area. The city’s new waterfront plan is key to attracting more people to the area.

Additionally, without the aid, the city’s nonprofit redevelopment group, River City Co., could owe the state nearly $1 million, an official said.

Chattanooga Mayor Tim Kelly said in a letter to Gov. Bill Lee last month that the money would help pay the Tennessee Department of Transportation for easements on what is a parking lot and eventually bring the high-profile plot to “its highest and best use.”

But State Sen. Todd Gardenhire, R-Chattanooga, said in a phone interview that there are already limited parking spaces in the waterfront area.

He said taking the land at Riverfront Parkway and Power Alley and possibly giving it to a developer to build something like condominiums would be “a disservice to the city’s tourism industry.”

The city’s new waterfront plan unveiled last summer, which envisions the biggest waterfront transformation in nearly two decades, points to possible high-rise multi-storey buildings in the parking lot.

Darren Meyer of planning firm MKSK, which led work on the plan for River City Co., said when it was revealed last year that the site creates an opportunity for affordable mixed-use housing with commercial space on the ground floor, including for minorities. owned businesses.

According to the mayor’s letter, TDOT has an easement valuation valued at approximately $1.45 million.

Emily Mack, president and CEO of River City Co., said in an interview that the easements that cross the middle of the lot and take up much of the land date back two decades.

When Chattanooga Mayor Bob Corker negotiated with the state to get Riverfront Parkway, a provision was included that provided for the easements, which are on what was left of the old State Route 58, she said. declared.

Mack said there was also a deed restriction that the property would be owned by a public entity or serve a public purpose, as federal money was included in the construction of Highway 58.

The property was eventually split into three city-owned portions, Chattanooga Downtown Redevelopment Corp. and in River City, and the site was turned into a parking lot, she said.

But after Corker left office and there were staff changes in the city and River City over the years, the restriction of acts on the lot didn’t carry over, Mack said. As CARTA collected parking revenue at the site, River City began collecting its share of parking funds for its use, she said.

In 2018, the restriction came to light and the city notified River City, Mack said.

“As we considered the future and the potential opportunity for the lot, it presented a challenge for its future development, she said.

Mack, who joined River City as CEO in the middle of 2o2o, said during public comments on the development of the new waterfront plan, people said they wanted more chances to live, to socialize and dine downtown.

She said a mixed-use development with potential for retail downstairs and residential above at a number of different price points is being considered for the site. Also, if developed, the parking lot should be incorporated into the project, Mack said.

But another property-related issue for River City is that it would have to repay about $249,000 in net parking revenue it’s collected over the years, Mack said. Additionally, River City’s share of the cost of the easement alone would be more than $710,000, Mack said.

So without state assistance, River City could have to pay a total of about $960,000 to the state, Mack said.

“That’s a lot for a nonprofit organization,” she said.

Mack said the nonprofit has savings funds, but the large figure is why it is asking for state assistance.

“It’s not something we take lightly,” she said.

Mack added that River City has no proposals to redevelop the land at this time, noting that it hasn’t even solicited an application from developers yet.

Gardenhire said that while the issue traces back to existing River City management and the mayor, TDOT still needs to be paid.

Also, Gardenhire said, if the property is eventually sold and developed by a builder, there should be a clawback provision “where if a profit is made, if that developer flips it in a few years to make a ton of money , the State is made whole on the original amount of the money.”

State Sen. Bo Watson, R-Hixson, said by phone that the issue related to the mayor’s request to the governor deserves further study.

“We have been advised that there is an interest in this property to which I believe TDOT has rights,” he said. “We’ve had a bit of a discussion about it with the River City group and the administration, but not much. So it didn’t surprise us too much. We just don’t know where we’re moving on that one. “

Contact Mike Pare at [email protected] or 423-757-6318. Follow him on Twitter @MikePareTFP.

Contact Andy Sher at [email protected] or 615-255-0550. Follow him on Twitter @AndySher1.