The following letter was written by Hill City Neighborhood Association President Rhiannon Maynard to all sitting members of the Chattanooga City Council, the Hamilton County Commission, and members of the press. I believe this letter does a great job making the connections between how elected officials are padding the pockets of private interests, like connected developers and businesses, in downtown Chattanooga at the expense of the broader public and our own particular communities. This letter, and the resolution that it brings under sharp criticism, deserve reflection and consideration as this issue is reflective of "Business-As-Usual" in City/County Government:
Elected Representatives,
I have serious concerns regarding the City Council's 8/21/12 agenda Resolution i. It states:
A resolution to make certain findings relating to the granting of incentives to develop housing in downtown Chattanooga; to delegate certain authority to the Health, Educational and Housing Facility Board of the City of Chattanooga, Tennessee; to adopt a program for downtown housing development; to authorize the Mayor of the City of Chattanooga to enter into agreements for payments in lieu of ad valorem taxes meeting the criteria of said program and to provide for a termination of this incentive program in ten (10) years. (District 8.)I believe this matter may also come before the County Commission.
I have requested but not received full information about the appointments, terms, goals, scope, authority and membership of the Health, Educational and Housing Facility Board as well as the Industrial Development Board - both of which hold deeds for many substantial properties in Chattanooga that receive payment in lieu of taxes agreements.
Granting a PILOT agreement is a very serious consideration. As a citizen and tax-payer, I do not want to see the authority to grant payment in lieu of taxes given to the mayor or a board without the city council having final oversight. Big downtown and desirable properties should bring in their fair share of property taxes. Incentivizing low or moderate income housing is, in my opinion, an acceptable goal, but this 2010 internal audit report shows that on one particular PILOT property, that system broke down and a certain downtown entity did receive a PILOT agreement but did not deliver on the affordable housing portion of the lease:
The lease agreement required RiverCity Company to lease or hold for lease at least twenty percent (20%) of the units to tenants whose income falls below eighty percent (80%) of the median income level for the Chattanooga/Hamilton County area.
We found no approval by City Council of the lease agreement or PILOT payments. Further, it appears in July 1997 an administrative judge with the Tennessee Board of Equalization mandated that RiverCity’s leasehold interest in the property be assessed tax pursuant to T.C.A. 67-5-502(d). However, we found property taxes have not been assessed or paid under this assumption.
Chattanooga Housing Authority has not verified compliance with the terms of the lease agreement (low income rentals). Based on discussions with Chattanooga Housing Authority, RiverCity has never paid any lease payments. Further, an estimated $109,000 is owed in delinquent taxes/PILOT, excluding any applicable interest and penalty, under the lease agreement. Chattanooga Housing Authority has requested financial statements from RiverCity Company to determine if any rental payments are due.
To follow up on this particular property mentioned in the audit, chattanoogan.com reported on July 24, 2012 that it was sold. Were the back taxes paid?
Allow me to elaborate. Roads are in disrepair, agencies have had their budgets cut, and right here in my community, the North Chattanooga Recreation Center does not have any Air Conditioning in the basketball gym. The North Chatt Rec Center only has two rooms. If youth are expected to be active and safe during summer breaks, how is this possible when half the building is over 100 degrees? Also, the whole Rec Center is INFESTED with cockroaches. Visitors to our Back to School Bash on August 11 were mortified by thousands of cock-roaches everywhere. Furthermore, none of the computers in the computer lab work. If I ask City Council and Parks and Rec to address these issues, the response is, "Where are we supposed to get the money?"
Well, the money is supposed to come from property taxes but PILOT agreements are undermining the City's budget and going to select, favored entities that aren't even abiding by the agreement's obligations. This is a flagrant misuse of PILOT agreements and we are all remiss if we give the authority to grant PILOT arrangements to unaccountable third parties. The folks who serve on these Boards don't represent me and the mayor has 8 months left.
So before City Council or County Commission can vote on this item, the public deserves to know
1) Who are on these Boards,
2) When do they meet,
3) What is on the agenda,
4) Are there any conflicts of interest,
5) What purpose would it serve to cut out citizen-elected-representatives from the PILOT decision-making process, and
6) Were back taxes paid on 1 Market Street when it recently sold?
I am unable to attend the City Council meetings at 3pm and 6pm today due to a work obligation.
All the Best,
Rhiannon Maynard