Chattanooga IDB approves submission of Northgate Mall infrastructure plan to City Council

The Industrial Development Board of the City of Chattanooga voted to approve a resolution to submit an economic impact plan for the Northgate Mall infrastructure project to Chattanooga City Council after a public hearing and presentations by city staff, outside counsel and the property owner.

The plan would reimburse CBL Properties for developer-funded upgrades to sewer, water and stormwater infrastructure serving Northgate Mall and adjacent parcels by using incremental tax revenue generated after a baseline year is set. CBL told the board it will fund the upfront work and bear the economic risk until the developer is repaid from future increment.

The proposal was described to the board by Sherry Down, senior advisor for economic and workforce development for the City of Chattanooga. She said the proposal is infrastructure-only and that the new sewer and water systems would be dedicated to the city upon completion. "This is a developer who's able to do a project quicker than the city would be able to do it," Down said, adding the plan is intended to "preserve existing property taxes, preserve existing sales taxes, and put infrastructure in place to lead to future growth."

Outside TIF counsel Mark Mamantoff reviewed the legal framework and a public-finance review. He noted a recent change in state law that treats public infrastructure standing alone as a qualifying project and summarized the Water Street analysis used to test the "but-for" question. "Public infrastructure standing alone is a project," Mamantoff said, explaining that infrastructure-only projects require a different…