Chattanooga IDB reviews pilot policy overhaul, fund balances and program priorities

Charita Allen, senior advisor for Economic and Workforce Development, and Adam Myers, vice president for economic development at the Chattanooga Area Chamber, briefed the Chattanooga Industrial Development Board on a rewrite of the city’s economic-development pilot policies and on how the board’s fee-funded programs are currently resourced.

The presentation laid out why the pilot policy update matters: the city wants a clearer, more predictable process for pilots, stronger reporting and monitoring, and a matrix to score projects on jobs, wages, capital investment and community benefits, Allen and Myers said.

The chair opened the session by noting the briefing would recap work from prior meetings. Allen said the Industrial Development Board (IDB) derives authorities from state law and uses a mix of city-appropriated funds and pilot-related economic-development fees to support programs. “The IDB has the authority to decide how it wants to spend those funds,” Allen said, describing a set of accounts the board controls for small-business grants, innovation grants, tech workforce programs and other initiatives.

Myers said the Chamber’s draft policy codifies several longstanding practices and sets new minimums and evaluation criteria. “We want to be a steward here of public resources while also creating a very clear and predictable process,” Myers said. The policy package being taken to the City Council’s economic development committee would: require an economic-impact analysis for pilots; preserve 100% school-tax payments during a pilot period; include a public hearing; require an affidavit that the project is not otherwise likely to occur in Chattanooga (“but for” test); and add conflict-of-interest and reporting requirements.

Key thresholds and matrix elements presented by the chamber and staff include: projects must create a minimum of 100 new full‑time jobs to be eligible; capital-investment minimums of roughly $20 million for manufacturing projects and $5 million for office projects; a wage floor of at least 80% of Hamilton County’s average annual wage (projects scoring 100% of the average wage receive more matrix points); and an abatement schedule that the presenters described as 100% in year 1, 75% in year 2, 60% in year 3 and 50% in years 4 and beyond of the city general revenue portion of taxes for approved pilots. Myers said the delegation of approval authority to the IDB would be limited to pilots of 10 years or less and that higher-value projects would still go to city council.

Allen reviewed the IDB’s fee-controlled accounts and their balances as presented to the board. Those included a pilot economic-development fee account (presented balance: $2,617,662), a growing small-business grant account (presented balance: $119,574), an innovation grant account (presented balance: $170,000), a tech‑workforce account (presented balance: $335,000) and smaller accounts for construction mitigation (presented balance: $11,000) and business development (presented balance: $25,000). Allen said a newly created “high-growth jobs” fund has been approved but not yet funded or transferred into a separate account.

Evelyn Moyo, who presented financial reports earlier in the meeting, told the board a first installment of $85,800 was paid on a compressor purchase the board approved in October. Moyo said, from inception to date, the IDB had spent roughly $5,496,000 on behalf of the city and received reimbursements of about $5,340,000, leaving an outstanding reimbursement of about $160,000 that she expected would be collected soon.

Board members asked several questions during the discussion. One member asked why the city continues to recruit jobs while local employers report persistent “help wanted” signs; Myers answered that the types of jobs the city recruits tend to bring new dollars into the local economy because they sell beyond the region and can lift wages and spending power. Several board members pressed staff and the Chamber to ensure the pilot policies address construction hiring and apprenticeship opportunities tied to large capital projects. Myers said apprenticeship hiring during construction is included as a special factor in the matrix, and Allen said construction-job impacts are typically captured in the economic-impact analysis that accompanies each pilot application.

Members also asked about local small-business pathways and minority- and women-owned business support. Myers and Allen said existing-industry retention and small-business grant programs are part of the IDB toolkit, and that partners such as River City Company, LAUNCH Chattanooga and Southeast Tennessee Development District also pursue retail, restaurant and storefront development.

The presenters said the Chamber and city staff had reached out to more than a dozen community stakeholders during policy development, including the county, city auditors and other regional partners. Myers said the city would present the full policies to city council’s economic development committee on Jan. 7 and seek final council approval on Jan. 14. The chamber asked the IDB for feedback and signaled it would return after the council committee review with a one‑page summary and the full packet for the board.

Votes at a glance: there was no formal board vote on the pilot policies during the IDB meeting; the packet and a staff/Chamber presentation were provided for discussion and for the board’s input prior to City Council committee consideration.

The session closed with board members asking staff to circulate a one-page summary of the draft policy package and the full packet for their review before policies proceed at council.