12/01/25 Chattanooga Industrial Development Board Meeting
Call to Order, Quorum, Minutes, Public Comment 📝🗣️ (≈8:58–9:45)
Chair (name not stated)
Notes quorum present; calls December IDB meeting to order.
Confirms meeting was properly advertised (with thanks to Maria).
States prior meeting minutes are in the packet and requests a motion.
After motion and second, calls for vote; all in favor, none opposed; minutes approved.
Opens the floor for anyone wishing to address the Board; no one comes forward.
Closes public comment and moves to first agenda item.
HomeServe USA PILOT – Easement Workletter Ratification 🏗️ (≈9:45–11:25)
Board Counsel / Staff (name not stated)
Describes item as a resolution ratifying the chair’s execution of Exhibit B workletter agreement for a permanent sanitary sewer easement and temporary construction easement related to the HomeServe USA P Corp PILOT project with T. Green (T. Jean) Edwards and Judy A. Edwards.
Explains the workletter was signed by the chair at the request of the City Attorney’s Office the prior week and is now before the Board for ratification.
States the agreement was needed to avoid a liquidated damages claim of $56,000 per day under a contract if an easement was not available.
Notes a temporary construction easement was quickly secured and executed, cutting off and avoiding the $56,000/day liquidated damages exposure and enabling the HomeServe PILOT project to proceed.
Board Members
Make a motion and second to approve the resolution ratifying the workletter agreement.
Vote: all in favor, none opposed; motion passes.
E2I2 Project – Lee Highway Church of God Property Purchase 🚧 (≈11:32–16:04)
Chair
Reads into the record a resolution authorizing the chair to enter into a contract for sale and purchase with the local board of trustees of the Lee Highway Church of God, substantially in the form attached, to purchase real property at 7218 Hamilton Acre Circle (Tax Map No. 139P C7.04 04) for $580,000, with closing fees not to exceed $10,000, for a total transaction not to exceed $590,000, and to execute all documents necessary to consummate the transaction.
Board Counsel / Staff (name not stated)
States this contract will secure property that provides access to land already in a PILOT for the E2I2 project.
Notes the property is currently owned by the Lee Highway Church of God and functions as the area needed for access, essentially an easement area for sewer-related purposes.
Elizabeth (City staff – project representative)
Recaps prior appearances before the Board about providing access to the Lee Highway property held by the IDB for the E2I2 project.
Explains the current entrance uses a culvert shared with a neighbor that is not rated for larger vehicles needed for the project.
States upcoming FEMA changes prevent installing a new bridge because it would cause downstream flooding.
Explains purchasing this parcel will provide permanent access to the project site in perpetuity; remaining triangular-shaped portion not used for access could potentially be sold later.
Notes the church was not interested in granting only an access easement and preferred to sell the entire parcel.
Confirms the E2I2 project at this location is a 10-million-gallon wet weather sewage holding tank, which stores combined system flows during rain events for later treatment.
Clarifies this is a purchase of property, not just a permanent easement.
States the City will ultimately own the property (rather than the wastewater authority).
Confirms due diligence has been completed, including surveying and environmental studies, and staff believes the property is adequate for vehicle access needs.
Board Questions & Comments
Ask about the current shared entrance and whether that landowner is involved in this purchase; staff clarifies the current deeded access via 7148 Lee Highway is not used because heavy equipment cannot cross the culvert, and the temporary entrance cannot be made permanent.
Confirm that the City (not WWTA) will be the eventual owner.
Action
Motion and second to approve the resolution authorizing the purchase.
Vote: all in favor, none opposed; motion passes.
TIF Final Audit Report – Presentation & Discussion 💸 (≈16:10–32:45)
Winston Brooks – Director of Economic Development & Entrepreneurship
Introduces the item as a report-out on a Hamilton County Internal Audit of tax increment financing (TIF) agreements initiated by the City of Chattanooga and Hamilton County since 2013.
States the audit was conducted by County Auditor Chris McCulla, with a report dated October 9, 2025, covering TIFs from 2013 onward.
Summarizes that the audit concludes the TIF program is generally achieving its primary goals of encouraging economic development and maintaining adequate internal controls.
Notes the audit also identified weaknesses, including:
Lack of formal policies for Hamilton County and its Industrial Development Board.
Inconsistent project oversight, especially in monitoring financial compliance with agreements.
Summarizes key recommendations:
Formalize policies and procedures.
Enforce compliance with agreements.
Improve financial oversight and reporting.
Clarify program objectives.
Explains that the new CivicServe software (previously approved by this Board) includes TIF and incentive management functions and will be used to track financing, reporting, and compliance, which is a significant step toward addressing audit recommendations.
Turns the presentation over to Sharita for more detail.
Sharita – Economic Development Staff
Notes the full audit report was emailed directly to Board members by the County Auditor.
States the report:
Reviews all existing TIFs, including when they were adopted, the TIF amounts, and capital investment figures.
Reiterates recommendations already summarized by Winston.
Explains that historically, staff has provided an annual TIF report to both the IDB and City Council in PowerPoint form, showing:
Each TIF development.
Existing capital investment.
Increment being generated.
States that future reports will also include:
The original purpose of each TIF.
Whether the TIF is meeting its stated goals.
Additional details requested in the audit.
Clarifies policy context:
The City of Chattanooga and this IDB already have TIF policies.
Hamilton County and the Hamilton County IDB currently do not have TIF policies; the audit’s policy recommendations are primarily directed at them.
At some point, staff anticipates recommending updates to City/IDB policies for transparency and to streamline the current multi-step process, but any changes will come back to this Board and City Council for consideration.
Notes there are six TIFs; five are currently producing increment.
States staff will continue to provide annual reports at the end of each fiscal year; the next report to this Board is expected around June 2026, with the new elements requested by the auditor incorporated.
Confirms implementation of the new economic development software will begin in January 2026, with TIF-related reporting expected from that system in 2026.
Emphasizes this is an FYI item only with no action requested of the Board today.
Board Member Questions – Compliance & Legal Alignment
A Board member references page 8, second and third bullet points in the audit, describing concerns about:
A potential conflict with Tennessee Code.
Enforcing annual compliance with developer certifications.
Asks whether staff is planning to address those items only in the spring or already working on them.
Sharita – Response on Compliance & Developer Certifications
States staff is currently working to address those issues and notes:
Because the report is a combined city–county audit, some findings relate to the county, which lacks policies; the City/IDB side already has policies and is in alignment.
On the Tennessee Code conflict:
States that issue does not apply to the City/IDB; they are fully compliant with state law regarding TIFs.
On “annual compliance with certifications from developers”:
Acknowledges she needs to review that specific phrase to clarify what type of developer certification the auditor means.
Explains current practice:
The City vets developer qualifications during TIF application to ensure capacity to complete projects.
TIF projects are meant to be “shovel-ready,” meaning the developer should be ready to proceed promptly once the incentive is granted.
Board Member Questions – Delegated Compliance Role & Staffing
A Board member cites page 7 recommendations to:
Delegate an individual within the Chattanooga IDB to review each contract and financial reports to ensure compliance.
Notes the auditor seems to suggest a deficiency in not having a designated IDB individual responsible for contract and compliance oversight.
Sharita – Current Oversight Practice
Reads the recommendation about delegating an individual within the IDB.
Explains current practice:
City Finance Department is heavily involved in oversight.
Historically, when Pinnacle Bank was the financing partner, City staff met regularly with Pinnacle to ensure all documents, invoices, and drawdowns were properly reviewed and handled.
For specific projects:
The City Engineer and team oversee some TIF projects (e.g., baseball stadium).
Economic Development staff manage others (e.g., Tubman project).
Housing team monitors housing-related projects within TIF districts.
Oversight responsibilities are currently distributed across several City departments, with Finance as the common thread.
A Board member asks whether other Tennessee IDBs, such as in Nashville and Memphis, have their own employees.
Sharita confirms:
Nashville and Memphis IDBs (Memphis’s entity is branded as EDGE) have full-time staff.
A Board member asks whether Chattanooga’s IDB should consider having its own staffer to oversee projects.
Sharita:
Believes the IDB should consider either:
A dedicated staffer to oversee TIFs as a whole, or
Project managers assigned per TIF project.
Notes that currently:
The City Engineer previously managed Enterprise South.
Various City staff are effectively “staffing out” IDB-related work.
Another Board member notes confusion in the report where some findings apply to the County IDB and not this Board, and stresses desire for clarity.
Several Board members express support for considering one dedicated person employed by the IDB to lead TIF and project oversight.
Funding & Structure for Potential IDB Employee
Board members raise the issue of needing sufficient funding to support a staff position.
Sharita notes:
Each TIF includes an administrative fee, which could fund such a position if the Board chooses.
The Board could consider increasing the admin fee to fully cover staffing costs if needed.
City Attorney (speaking from counsel table):
Notes that there are separate corporate entities involved (IDB vs. City).
States any such position would be an employee of the IDB corporation, not the City.
Sharita adds:
Given the number of PILOTs where the IDB holds title, and TIFs where the IDB holds TIF accounts, it is worth considering dedicated staff.
Comparisons to Other Cities & Next Steps
Discussion notes:
Knoxville reportedly has around 35 active TIFs; Nashville has a similar number.
Memphis has about seven different types of TIFs, including specialized ones (e.g., grocery store TIF), whereas Chattanooga uses only an infrastructure TIF.
Memphis’s entity EDGE is described as a larger, full organization.
Sharita offers to research:
How IDBs in Nashville and Memphis (and possibly others) are staffed.
What tools and TIF types they use.
Responsibilities and reporting lines of their staff.
Board agrees that staff should return with options and recommendations.
Chair proposes adding a discussion item for early 2026 to consider staffing and policy recommendations.
Sharita requests until February to bring back an overview and recommendations; the Chair and Board agree.
Clarification – Enforcement of Annual Compliance
Winston Brooks adds that “enforcement of annual compliance” primarily refers to:
Reviewing each development agreement.
Confirming that all obligations are met annually.
Applying penalties or remedies if agreements are not followed.
Clarification – Black Creek TIF & IDB Investor LLC Balances
A Board member asks about page 9 of the audit, noting a change from a beginning balance near $9.8 million to $8.619 million, and asks whether this means the Board owes less to IDB Investor LLC than previously thought.
Sharita:
Notes this table originates from the County Auditor and that she cannot fully answer without reconciling City vs. County numbers.
Staff / Board Response
Another participant explains the issue relates to differences in how the County and City calculate amounts, with the questioned discrepancy being on the County’s side.
Staff confirms the outstanding amount has been reduced over time because payments have already been made during the past approximately 13 years of the Black Creek TIF.
Board members comment that as TIF increment increases with further development, the remaining balance should be paid off more quickly, though there have been some recent development hangups that are being worked through.
Quarterly Project Update – Wastewater & Jacobs: Moccasin Bend (MBEC Class A Power Progressive Design-Build) 🚰 (≈33:03–35:11)
Chair
Introduces the agenda item as Quarterly Project Update #2 by the Wastewater Department and Jacobs Engineering Group, identified as W-20-027-101 MBEC Class A Power progressive design-build.
Board Discussion
Notes that the wastewater representative left shortly before this item was reached.
Indicates that the item appears to relate to modifications at Moccasin Bend, including new construction and high-intensity heat processing to convert material to pellets, as part of the consent decree program.
References the attached document showing:
Phase 1 project date: August 3, 2026.
Substantial completion: July 3, 2029.
Statement that there is no upcoming Board action requested at this time.
Observes that this same update appeared on the previous meeting’s agenda without a presenter.
Action
Board agrees to defer the update to the next agenda so it can be properly presented.
Identifies Mark Kaiser (Wastewater) as the person who should speak on the project.
Requests that Maria notify Mark Kaiser to attend the next meeting and present the update.
Follow-Up Items & Future Agenda Planning 📋 (interwoven in discussion)
Staff to:
Research IDB staffing models and tools used in Nashville and Memphis/EDGE and return with recommendations (target by February).
Prepare for potential policy modifications and structural options (e.g., dedicated IDB staffer or project manager funded via TIF admin fees).
Incorporate new audit-related elements into the next annual TIF report (around June 2026), including TIF purposes and goal tracking.
Continue implementation of CivicServe software starting January 2026 for improved compliance and reporting.
Place the Moccasin Bend MBEC quarterly update back on the next agenda and ensure Wastewater representation (Mark Kaiser).
Adjournment ⏰ (≈35:49–35:55)
Chair
Confirms there is no further business.
Thanks participants and adjourns the meeting.
Light informal remarks note the short length of the meeting and the lack of a gavel.
