Board approves mixed-income pilot for 702 Manufacturers Road, developer to deliver 42 affordable units
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Summary
Chattanooga approved a mixed-income pilot for a 278-unit development at 702 Manufacturers Road that will include 42 affordable units (15% of total); the city expects a partial tax abatement and a PILOT tied to the value of affordable units.
The Health, Educational and Housing Facilities Board approved a payment-in-lieu-of-taxes (PILOT) pilot agreement with Chattanooga MF Joint Venture LLC for a proposed 278-unit multifamily development at 702 Manufacturers Road.
City staff described the project as the first mixed-income pilot under the council’s recent revision to the City of Chattanooga affordable housing pilot program. Under the approved terms the development will include 42 affordable units (15% of the project): 32 units at 60% of area median income (AMI) and 10 units at 80% AMI. City staff said that, under the city’s calculator, the project qualified for a partial tax abatement and a first-year abatement valued at roughly $416,123; after abatement the anticipated payment-in-lieu-of-taxes was presented to the board as $341,931 in year one.
Frank Rees of Atlantic Companies, the project developer, said the site is a vacant seven-acre parcel in the North Shore area and that the project is already entitled and far along in permitting; he said the project team expects to break ground in about 30 days. Rees described a five-building plan with two access points and said a traffic study indicated no significant impacts to Manufacturers Road.
City staff emphasized the public-benefit side of the pilot: the mixed-income approach is intended to put affordable units throughout the city and to tie abatements directly to the value of units delivered. The board approved the payment-in-lieu transaction and pilot agreement by voice vote with no recorded opposition.
Why it matters: The mixed-income pilot expands where affordable units may be sited and links city tax incentives proportionally to the number and type of affordable units delivered. The project’s commitments include recorded affordability restrictions and public improvements the developer has placed in its construction budget, including repaving and rebuilding Paper Mill Road where it borders the site.
Board members asked about traffic, parking and how affordable units would be advertised; Rees said marketing would be handled by a third-party management company using online and paper channels and targeted outreach where appropriate.
