Council advances 702 Manufacturers Road affordable-housing pilot to two-week agenda

Council members on Tuesday advanced consideration of a proposed 278-unit development at 702 Manufacturers Road that would include 42 affordable units, sending the pilot agreement to the council’s two‑week agenda for a formal vote.

At an Affordable Housing Committee meeting, city staff said the application is the first under Chattanooga’s redesigned affordable-housing pilot and proposes a 15‑percent affordable set‑aside — 75 percent of those units at 60 percent of area median income (AMI) and the remainder at 80 percent AMI. Hanukkah, a city housing staff member who led the presentation, outlined the unit mix and the tax-abatement offer the developer is seeking.

The project sits on a vacant former industrial site on the North Shore and, according to the presentation, would deliver 42 affordable units dispersed through the development rather than clustered together. Hanukkah described the affordable unit mix as including 13 studios “about $1,000 a month,” 15 one‑bedroom units at about $1,075, and four two‑bedrooms at about $1,290; she said 10 units would be at 80 percent AMI (seven one‑bedrooms and three two‑bedrooms) with rents she cited roughly at $1,433 and $1,720 respectively. The city presentation said the 15‑year tax‑abatement pilot would qualify for an initial abatement of about $416,000 in the first year and projected a payment‑in‑lieu‑of‑taxes (PILOT) of roughly $341,000 annually once built, compared with current property taxes of about $9,000 on the vacant site.

Frank Reese of the Atlantic Companies, the developer on the application, described site plans, said the property is rezoned and currently under building‑ and land‑disturbance review, and noted the developer also holds the adjacent parcels under contract. Reese said the project will build Paper Mill Road as part of the redevelopment and that permits are in process.

Council questions focused on public access, service impacts and site remediation. Councilman Henderson asked that staff develop a tool to identify potential stress points on city services — fire, police, utilities — when large projects are proposed and how those stresses affect the budget. The presenter and staff agreed to follow up on service impacts, and the city attorney and staff noted the former industrial parcel once housed a liquid‑asphalt operation; the attorney said the site has not been active for several years and that “there may be some small remnants” but no active fuel operations remain. The fire marshal will review the site and the placement of new structures in relation to any remaining material.

Council members praised the inclusion of 60 percent AMI units. Chairwoman Hill called the mix a “Chattanooga‑style solution” that creates housing opportunities in a neighborhood that has little affordable inventory. After questions and comments, the council moved the pilot to the two‑week agenda for a vote.

The committee discussion did not include a final council vote on the pilot; the council will consider the tax‑abatement pilot and final agreement when the item returns for formal action.