2005 Section 108 Project Summary - Tennessee

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Economic Development

Mixed-Use Development
BORROWER: CHATTANOOGA
STATE: TN
SECTION 108 LOAN GUARANTEE AMOUNT: $10,000,000

Chattanooga will use its Section 108 Guaranteed Loan to fund public improvements in Alton Park and establish a Brownfield lending fund and a housing rehabilitation loan fund, which will include public facilities financing.

The City will use approximately $7,700,000 of the funds for the construction of new sewer systems, streets, sidewalks, lighting, and streetscape amenities in the Alton Park community and the adjacent site of the former McCallie Homes Public Housing units. These new infrastructure improvements will benefit the residents of the Alton Park community, 86.2 % of who are of low- and moderate-income persons.

The City will use, approximately $1,000,000 to establish The Brownfield’s Loan Program to make loans not to exceed $250,000 to for-profit entities to assist in the cost of cleanup and redevelopment of environmentally contaminated properties, in various designated sites in the city, for the creation of new business ventures and new jobs. This lending activity will create an estimated 20 new jobs, of which at least 51% percent will be available for low- and moderate persons.

The remaining $1,300,000 will be used by the City to establish the Community Development Loan Fund, which will include loans for housing rehabilitation, loans to small businesses, and public facilities improvements including assistance to Community Development Corporations. This financing will primarily benefit low- and moderate-income persons by providing affordable housing of which low- and moderate-income households will occupy 51 % of the housing structures.

East Jackson Redevelopment Project
BORROWER: JACKSON
STATE: TN
SECTION 108 LOAN GUARANTEE AMOUNT: $3,225,000

On May 4, 2003, the City of Jackson was struck by two tornadoes that destroyed numerous businesses in the downtown and many homes and neighborhood stores in the East Jackson community, a distressed neighborhood contiguous and east of the Central Business District.

Jackson will use its Section 108 Guaranteed Loan funds in conjunction with city funds and $955,000 in federal disaster assistance funding for carrying out a community economic development project in East Jackson as part of its Disaster Recovery Strategy. The City will use $2,500,000 in guaranteed Loan proceed to capitalize a business loan fund and a commercial real estate loan fund that are expected to stimulate new investment in East Jackson. The guaranteed loan funds will be granted to the Jackson Housing Authority, which will administer the business loan funds for the City. The loans will be primarily for neighborhood retail and service businesses, which will benefit low- and moderate-income persons through job creation and by providing needed goods and services.

Another component of the community economic development project is in the Anderson Creek area of East Jackson. The City residents of the Anderson Creek will relocate to a new area called Centennial Place II in East Jackson, which is not as vulnerable to flooding. Section 108 loan funds will finance the acquisition of real estate, site improvements, housing rehabilitation, and partially bridge the financing gap for the construction of 25 new housing units at the new site. Fifty-one percent of the housing units will be available to low and moderate-income households.