Chattanooga council approves amended Northgate Mall economic plan after debate over water-line funding

Chattanooga City Council voted Dec. 2 to approve an amended economic impact plan for the Northgate Mall infrastructure project, a tax-increment financing (TIF) package intended to fund stormwater, wastewater and water-line improvements in the Hixson/Northgate area.

The council inserted one formal amendment before voting to adopt the plan: it reduced the project line in Section 7 from $9,200,000 to $8,700,000 based on an independent third‑party review. The amended motion passed on a council vote.

Why it matters: council members said the redevelopment could catalyze reinvestment in Hixson and neighboring districts by repairing key infrastructure and capturing sales‑ and property‑tax growth to pay for the work over time. Opponents and some members urged fiscal caution and sought protections to ensure city taxpayers were not asked to cover infrastructure dedicated to a separate utility.

Key details and financing mechanics Sherry Allen, senior adviser for economic and workforce development, told the council that the proposed project “consists of both stormwater, wastewater, the sewer wastewater piece, and then there’s a water portion of it,” and that the water lines are currently owned by Hixson Utility District. Allen said Hixson “is not in a position to propose an assessment on their current water users to reimburse for the construction of those water lines” and therefore would not participate financially in that part of the work.

Allen also described a potential Appalachian Regional Commission (ARC) water‑infrastructure grant whose pre‑application deadline would be Dec. 5; that grant would require a local match and could reduce the city’s contribution if awarded.

Council amendments and safeguards Council members debated three related protections during the meeting. After discussion, the council adopted the $8.7 million figure recommended by the independent reviewer. Councilwoman Burrows and others proposed language to require council approval before any tax‑increment funds would be applied to water‑line costs that are not city‑owned; that language was discussed and amended during the meeting and the sponsor later withdrew and restructured overlapping language to keep options open for pursuit of grant funding while reserving the council’s right to vote if tax increment were to be used for water-line repayment.

Developer and counsel concerns TIF counsel and the developer raised practical financing concerns about certain proposed changes. The developer’s adviser warned that repeatedly changing the base-year assumptions or allowing the tax base to increase unpredictably could make long‑term project financing more difficult. The city attorney and staff acknowledged those concerns and agreed to continue working with the developer on contractual language in the development agreement.

Next steps and implementation With the economic impact plan adopted as amended, staff said the next steps include finalizing the development agreement and filing any necessary applications for competitive grant funding. Councilman Davis said he would bring a resolution asking the Industrial Development Board (IDB) to prioritize uses that reflect community preferences during the development agreement negotiation.

Vote and procedural outcome The council voted to approve the economic impact plan as amended (Section 7 changed to $8,700,000) and then approved related intergovernmental assistance documentation with the Industrial Development Board. Further votes on specific uses of tax increment — especially if the developer later requests that increment be used to pay for the water lines — would require a separate council action.