Community Renewal Good Stories - Chattanooga

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Chattanooga Experience Puts RC on Fast Track to Development

Chattanooga, Tennessee, RC

Fueled by broad citizen participation, a citywide vision, and aggressive leadership, "The Chattanooga Experience" has been heralded as one of the best public-private partnerships. Since 2002 the Chattanooga, Tennessee, RC has been a key component in the city's renaissance.

Visioning and planning for the city's revival began in the early 1980s with a plan that focused on development of the underutilized riverfront. Leading the city's recent downtown development efforts is the $120 million 21st Century Plan, which includes expansion of the Tennessee Aquarium and redevelopment of the north and south shores of the Tennessee River, among other things. Of the funds, $69 million came from the public sector (80 percent from a hotel-motel tax paid by visitors to the city) and $51 million from the private sector.

Where the 21st Century Plan ends, the RC begins. Since its inception, the RC program has awarded $24 million in Commercial Revitalization Deduction (CRD) allocations to developers of 17 construction and rehab projects, with a 5-year projected return on investment of 600 new jobs and more than $112 million in building costs and employee wages.

"Through the Renewal Community program, Chattanooga has been able to put in place tools that are resulting in new investment in our city's core and creating jobs for our citizens," says Mayor Bob Corker. In addition, Corker created The Enterprise Center, which oversees 14 federally funded programs (including the RC) aimed at technology and business development and job growth. In the central business district, business owners are participating in a Main Street-inspired revival of downtown. Eight building projects-ranging from construction of a hotel to renovation of a historic theater- have received CRD allocations.

"It certainly allowed me to pursue a bigger project than I otherwise would have been able to do," says Morgan Adams, an attorney who is renovating a former liquor store and boarding house into law offices, apartments, and retail development. "There's no question in my mind that the development of my building, which is in a rundown row, will make all the other projects on the block viable," he says.

In the Martin Luther King community there has been a major expansion of the University of Tennessee at Chattanooga, a $28 million investment in 100 new and renovated housing units, creation of a mile-long greenway, and a planned $100 million investment in commercial development.

In the Southside, construction of a new elementary school, renovation of a high school, new housing developments, and redevelopment of a major brownfield site have spurred commercial growth. Seven projects received CRD allocations.

"The RC incentive made the price and the project worthwhile," says John Clark, one of four developers that renovated a 1924 former bread factory, turning it into residential and commercial lofts. In addition to the CRD, owners took advantage of the PILOT (Payment in Lieu of Taxes) program, which allows developers of new housing in the downtown area to lock in on property taxes for 12 years.

In Alton Park demolition of one of the largest public housing complexes is making way for a $35 million HOPE VI development. Some 400 new single-family and multifamily homes and an adjacent First Tee golf course are fueling commercial development here. The city-initiated brownfields program seeks Federal support for reclaiming these hazardous sites for future commercial development. A CRD allocation was recently awarded for the development of warehouses on land adjacent to brownfields.

"Chattanooga has been very successful in using whatever Federal resources were available to leverage private investment," said City Councilman Ron Littlefield. "Anytime you restore health to a part of your community, it has a positive effect elsewhere."

For more information on the programs of the Chattanooga RC, contact RC Manager Maria Noel at (423) 425-3770.