Review committee clears TIF application to replace Northgate Mall utilities, sets Nov. 3 public hearing

A City of Chattanooga application review committee voted to advise City Council that a developer-backed tax increment financing (TIF) application for utility upgrades at Northgate Mall in Hixson meets the city’s TIF policy and qualified for submission, and it set an Industrial Development Board public hearing for Nov. 3. The application would reimburse the developer for new water, sewer and storm infrastructure that is now privately owned and serves multiple public-facing businesses on the mall campus.

Winston Brooks, Director of Economic Development for the City of Chattanooga, told the committee that TIF is “a financing agreement” in which a baseline property tax is retained by the city while taxes generated by later increases in assessed value (the increment) can be used to finance infrastructure. “That is why it is so important,” Brooks said, explaining that the developer can use the guaranteed future increment “to get bonded against or take to the bank.”

The project team, led on behalf of CBL Properties by developer John Michelle, said the Northgate property consists of 14 parcels and that a private owner (identified in the application as parcel 13) currently owns the on-site water, sewer and storm lines. Michelle said the private lines were installed in the early 1970s before Hixson was annexed by the city, and that “without new utility lines, there’s no business case to invest in the campus.” He described a redevelopment vision that includes mixed-use town-center elements, multifamily housing in Phase 1 and possible hospitality and retail later, and noted a proposed relocated library site on the plan.

Dan Cannon, civil engineer with Miller McCoy, described the system materials and condition: “The materials, the storm, the corrugated metal, the water, cast iron, we're talking, you know, 55 years of service. That's beyond any life of really any material.” The project team told the committee the infrastructure replacement cost is approximately $9,000,000 and that demolition plus upfront costs push the total to roughly $15,000,000 before vertical development could begin.

Committee members and staff discussed several policy items. Betsy Knotts, outside counsel for the city, said the application was reviewed against the city’s TIF policy and the state Industrial Development Board (IDB) requirements; she confirmed the documents, as submitted to the committee, met the city policy and the IDB Act process steps the committee is asked to review. Brooks and Knotts said the city requested and received three policy waivers from city council to allow the application to proceed; two waivers were granted and the third—requiring a third-party “but‑for” review—was not waived. The project team engaged a third-party reviewer and staff reported receiving a draft validation that the replacement of the infrastructure is the “but for” condition preventing higher‑value redevelopment.

Committee members emphasized the distinction between approving the application for compliance with TIF rules and agreeing to any particular redevelopment plan. Daisy Madison, a retired city CFO and committee member, noted questions about fairness and comparability with other developers who also dedicate infrastructure to the city. Brooks and city counsel said subsequent steps—an IDB public hearing, council consideration of resolutions of intent, and a development and financing agreement—would be the venues to add contractual restrictions or conditions on allowed development and reimbursements.

On formal actions, Greg Taylor moved and a committee member seconded a motion to advise City Council that the TIF application and associated documents comply with the city’s TIF policy and the IDB Act; the committee approved the motion by voice vote. The panel then voted to set a public hearing before the Industrial Development Board for Nov. 3 at the regular IDB meeting; that motion also passed by voice vote.

The project team and committee members said the primary rationale for public involvement is that a private utility system currently carries public customers—more than 20 businesses were cited—and the system’s age and condition means maintenance is becoming unreliable. Brooks told the committee that once rebuilt to city standards and dedicated, the lines would become public and maintained by the appropriate utility (the city for sewer and Hickson Utility District for water, as described in the presentation). The team explained that many out‑parcel properties around the mall have already been redeveloped and currently rely on the private lines, which limits what the middle of the campus can support without new infrastructure.

Next steps: the Industrial Development Board will hold the Nov. 3 public hearing, the IDB and City Council will consider the economic impact plan and resolutions of intent later in the statutory process, and a development and financing agreement is expected to follow if approvals are obtained.