City Council - workshop

Working with us so that we can be aware of that. And so yeah, that's kind of our parameters for this part. And so we have our pilot and tip discussion as well. So if we could spend about half an hour on this, half an hour on that, and we'll all have a minute to catch a breath before our meeting at 3.30.

Well, thank you. Thank you for your time. If I could just start by taking two minutes to explain why this is so critical. As I think you all know, the per capita homeless rates in Chattanooga are really no different than other metro Tennessee cities. However, our unsheltered rate is significantly higher, approximately 68%, compared to about 22% to 25% in other metro areas. And the reason is there's just simply not enough shelter beds. Why does that matter? When somebody is sheltered but homeless, it takes approximately, or on average, 400 days to get rehoused. But when somebody becomes unsheltered, that number skyrockets to an average of seven years. The reason for that is it's really hard to do the things that you need to do to get rehoused when every moment of your life is faced with survival. And so a 24-7 low barrier shelter would allow people safety, security, and assistance to uh... work on whatever is necessary uh... to develop an income stream to get benefits to to get out and shorten that amount of time being unhoused and so we really believe that uh... the absence such a structure in this city exacerbates what is already of really big crisis one last thing when uh... somebody x parents is more than a year uh... their mortality rate increases three to four times that of somebody that experiences sheltered housing. And so this is not just a problem of what it looks like on the street. This is also a life and death issue. So in January, we submitted three proposals initially to the mayor's office about different options. One was a warehouse that was available at 12th and Peebles that we felt could be restructured for a shelter. We also considered the lot that was the former sanctioned encampment. That's a city-owned lot. That would be a build-to-suit kind of structure. We initially looked at the Family Promise building. And then Kevin Rogue came back and said, would you consider building on your own footprint? And we started working with our architect to look at different concepts with that. I think the two most viable options really are the city-owned lot building new construction or building it on our footprint. As it's been explained to me, there's probably some political expediency in building it on our site because we're already zoned as being able to have a shelter and have residences there. It's on our property. And there would be some economies of scale gained in that we could – have a somewhat lower cost of operations, being that we currently have 56 people working on our site currently, and some of those could be shifted over to shelter operations. I met with Councilman Harvey and Chief of Staff Rogue about six weeks ago talking about this very subject and about what it would take to put together a proposal, a fleshed out proposal for building on our site. And so we are currently in the process of working with our architect to design a facility that would hold approximately 400 to 500 individuals on two floors. Interesting, you would not be able to tell any difference looking at our structure from the street because this would be the subterranean basement that we have that would be renovated and the back administrative offices. We're also looking to redesign the playground into a walled off courtyard that would allow an outdoor gathering space because I don't think anybody's happy with the amount of gathering that happens on 11th Street. And so between our community center, our porch, and the back area, I think that would address a lot of concerns. A lot of cities that build these have a pretty big price tag because they're also building dining facilities, community center facilities, case management facilities, clothing departments, what have you. medical facilities. Between us and homeless healthcare, all that exists. All we need is really to establish the dormitory space. As far as the cost, we're really still working through that because my architect and I just got back from Colorado Springs in Memphis this weekend touring a couple of facilities. But I hope to have that. the operational plan and a budget into the hands of you and the mayor's office at the very beginning of September. Initially, in the proposal that I submitted, we asked for $2.8 million of capital funds because that was what I was aware was on hand and available for a project such as this. And depending on the what the architectural plans look like, and that's going to determine our staffing plans, some of our utility costs, and that'll inform our budget. But when we were doing a similar exercise of determining what our budget would need to be for the converted CARTA bus barn, I believe the annual operating costs were somewhere around, and Casey, do you remember, it was like $930,000 annually? I don't remember off the top of my head.

I could go back and look.

That's the number that sticks in my head. We're hoping that we can come in closer to $750,000 if it's on our site. So yeah, those are the two options that I think would be best. I really don't like the idea of reconfiguring or converting an aging warehouse that was built for tomatoes and not people. And the Family Promise building would only hold approximately 80 individuals, which really wouldn't really make a significant impact given the fact that we're looking at an unsheltered homeless population somewhere around 1,000 to 1,200 people in Chattanooga. I have reached out to a number of council members from the county to let them know that I'm going to be asking them for some money as far as this is concerned as well. We're pretty well positioned as far as partners in the area for partnering for services, whether it's adult education, health services. We're currently working with UTC, CHAT State, and Southern to provide a lot of those services. And I'm pretty fond of partnering with other organizations that are looking to support this effort. One other thing is we are pleased that this facility would be able to house both male and female individuals, which is fairly unusual, as typically cities will have one shelter devoted to one gender, another organization perhaps working with another gender. So we're looking at a one-third, two-thirds split, women to female, just because that's the basic makeup of our population that we're serving.

Okay. Okay. Yeah. Council members.

Hi, Baron. Thank you. Thank you for that. Sure. It's good to see a different idea coming to us. It feels like it's got some more teeth to it and got at least a plan, concrete plan. I have some questions about, I just want to verify that I hear you correctly, $750,000 in operating costs. Is that, that's what you're projecting? Yeah. I want to back up because I, I for one take for granted all the, the facilities that you all do have, because I think most of the attention ends up on 11th Street.

Yes.

So could you provide for me just a high-level picture of the various facilities that you all do have?

Sure.

And then how many total people you're able to house with those facilities right now?

Currently, we have the block on 11th Street. Right. from Douglas to Peebles. We also have three properties that are permanent supportive housing properties on the Museum Street site. Those hold a total of 18 individuals. Since the second half of 2024, we're no longer receiving HUD funds to run those programs. And so we've been running those housing programs unfunded. And given the current grant and giving climate is becoming more and more difficult. And so we're actively looking at, in the past, our organization for 44 years has majored on housing, minored on sheltering. We think that it might be time for us to switch that focus. Still, we'd be very active in doing the housing navigation part. That would be part of what happens at the shelter to get people housed in other properties on scatter sites and so forth.

And so I did kind of look ahead and look at your website. So do you have something else besides Museum Street?

We also have House of All Souls. And that's a property that's actually designed for people with disabilities or terminal illnesses. That's actually a very unique nine-bedroom, five-bath facility. And then we have our apartment complex at the end of the block on Douglas and 11th, which is family housing, and that's 10 two-bedroom apartments. And we're going to be retaining that and using that as a transitional housing model.

So what facilities are impacted by the HUD funding?

Well, all of our permanent supportive housing.

And that's Museum Street and what else?

And HOAS and family housing. But we're going to be changing our family housing apartments, the model.

Gotcha.

Yeah.

So what's the status of Museum Street right now? Are there people living there?

There are. We've relocated a couple people already and we're going to continue to do so.

So what's the plan? It'll stay open until you're able to find homes for those folks or what? I mean-

Yes, and we're all talking with a number of area providers that might have an interest in purchasing those. The unique feature of these is their high number of bathrooms. So the HOAS properties are four bedrooms, four baths, so everyone has their own bathroom. And they make, it's a good setup for a group home for an organization such as Orange Grove or AIM Center that might want those houses all in the same area. They're in the same cul-de-sac. So it makes it, I think, fairly attractive. Okay.

Thank you. Mr. Chair, I have one other question. Going back to what you were saying about co-locating males and females, talk a little bit more about that because the first thing that comes to my mind is safety. Yeah. So how does that work? What's the structure of that?

Well, the reason why we feel we can do it, they're going to be on two different floors, and they're going to be separated by controlling access and also security.

Okay.

So, yeah.

And then one last question. Tell me, will you be providing any on-site resources? Yes. So programming where if I need help finding a job or I need help getting an ID or if I need...

Workforce development, housing navigation, the same services we're providing just at a more robust level given the increased number of people.

Okay. Thank you, Mr. Chair. That's all I have right now. Okay.

Thank you. Councilwoman Dunn. Thank you so much, Mr. Chair. Thank you very much for the I had just a couple of questions as well. So you said you're looking to redevelop the current site in a sub-basement, and that would do two additional floors in a sub-basement. Is that what you're saying?

So currently we are a single-story building. with a large cavernous basement. Some we use for storage and operations, others we cleaned everything out and it's just an empty space right now. And our architect feels that we can make a lot of improvements in that space fairly cost effectively and convert it into a pretty attractive site. And then the regular first floor, the whole back end is administrative. So we would have to relocate some of our administrative offices.

Okay. And have you thought about going up a level at all? We have.

Would it be too expensive? There's a price for that. Okay.

And then my other question is, given that I was here the first time when this happened and the MLK neighborhood was not very fond of really any changes in that space, Just wondering, had you got any community feedback or thoughts in regards to that? And I think one of the biggest issues that was gleaned from that was that nothing is happening now. Now, the city goes in, I believe, on Wednesdays, Wednesdays or Thursdays, and, like, sprays the sidewalk and cleans things up and things like that. But on a just every day. And some of the individuals that are in the area also make an effort to keep it clean as well. I went to the homeless health care. Yep. quarterly meeting they had and so a lot of them were talking about how they were trying to keep the area clean then there were others that were trashing it right after they went and picked up so that was frustrating to those to the people that was there in addition to the awning situation on the homeless health care side where people were sitting very informative meeting so I guess in that what what can you do what can be done now to ensure to show that neighborhood that this is going to be a positive thing. I think that's going to be probably the biggest hurdle if we're not considering them. I think also one of the issues they had, and they sent videos to us of this, of people coming off and stealing things off their porch, defecating on their porches, and all these different things. There's a lot of stuff happening to that community right there. So I guess just what can we do to kind of reassure the community that this is a good idea, and then what plans do you have at the moment to... to begin to work on that space?

That's a great question. And I spend a lot of time in that neighborhood, and so I talk with a lot of people. We actually have added an MLK resident to our board of directors because we feel like this is a community problem. This affects everybody. And what's interesting is when I talk with individuals, the comments and concerns I have don't typically reflect not in my backyard concerns. And the reason being is the problem is already in their backyard. The comments and concerns are more about if this happens, will it alleviate what's already going on? The theft, the defecation, the urination, the... open drug use and those types of things. What was interesting when the city held the neighborhood meetings, there were three of them, and I attended all three. And if you attended all three, you'd say that the neighborhood was pretty fired up against the idea of a shelter. I attended a fourth meeting that was held by the MLK Neighborhood Association. And it wasn't attended by members of the city. It was really just the neighbors. And I expected to hear a lot of not in my backyard comments. I was blown away at the questions that were being asked. Questions like, will there be enough case managers? to make this a vehicle to launch people from homelessness? How will this change the sanitation in my neighborhood? Does the city have a plan? Who's going to run it? Those are questions that you ask if you're simply worried about property values and the idea of a shelter in your neighborhood. And I've shared this with Chief of Staff Rogue that I believe there's concern But I don't believe that they have a true handle on the nature of the opposition, just because of what I've heard and what's been shared with me. And so what we're hoping is that the presence of a shelter gives the entire city a different way to approach homelessness. Right now, if somebody is sleeping in somebody's front yard on 11th Street, the police can respond and they'll move that person down the street or over onto another block, but the problem remains. If there's a 24-7 low barrier shelter, it changes the nature in which CPD can address issues of homelessness. You can go to the individual and say, listen, you can't be here. I can take you to the shelter or, you know, it's a ride to Silverdale, but you can't stay here. And it gives a different way of the community addressing this idea of unsheltered homelessness. And quite frankly, a lot of the people that we see unsheltered are chronically homeless, and this has become the new normal. So getting them to... try out the shelter, see if it works and know that that's the place that they can go be safe, not be harassed, not have their things stolen.

And then so do you plan to engage that community again regarding this potential project?

I'm happy to. I don't want to do anything out of step. And so when I talked with Chief of Staff Rogue and Councilman Hardy, the next thing they're waiting for is my three documents, my three proposals, and then we'll see if we're going to move forward. But yeah, I'm happy to talk to anybody in any type of venue, any framework.

Okay, I will note that it is District 8, so I think that would be important to note to talk to that council person. And the other piece I had was when I did go to the homeless self-care quarterly meeting, they mentioned that a lot of the people were mentioning that, you know, between the time they were waiting to have dinner at the kitchen, that they, and then even after they had dinner, they didn't have anywhere to go. So will the shelter be open tomorrow? all day, what would the operations look like? Because a lot of people are saying, you know, we sat here because we're just waiting to have dinner or we're waiting, but it's hot, you know, and things like that. So what are your hours looking like for that?

So the shelters exist currently, and that includes the two small church shelters that we run. It's 6 p.m. enter, 6 a.m. exit, and you can't be there during the day. That doesn't work for a lot of people, especially if they need to retrieve belongings. they have job interviews or their job they're going to they need to be able to come and go that's why it's called 24-7 low barrier so they would have access to our common areas and the dormitories throughout the day there would be a period of on both dormitory floors where it would be closed so we could clean the floors, do the laundry. But we're looking at about an hour and a half to two hours a day out of 24 hours. And so, yes, it would be a place where people could stay inside if it's blistering hot or if it's freezing cold, and we wouldn't have to exit people out of our building at 5 o'clock.

Okay. Thank you so much. I appreciate it. Thank you, Mr. Chair.

We have time for a couple more questions. If I don't get to everybody, I apologize, but it sounds like we'll be hearing from Barron again. Hopefully coming back after you have your budget that you mentioned. I want to make sure to give ample time for our other topic as well. So Councilwoman Hill and then Councilwoman Noel. Thank you.

Thank you. So, Barron, how many people do you guys serve daily right now?

Anywhere from 300 to 500. It's... a lot of the there's two basic services that we don't require any identification for and that's food service and the community center and so people come and go and also we have some anecdotal evidence that there's people that take part of our services that technically may be not homeless but need that free breakfast meal on the way into work if you notice in the morning people pull up 7 o'clock, get out of their car, run in, grab food, get in their car, and head in town. We don't see them for lunch. We don't see them for dinner. So we think that we're probably augmenting people that are living right on the edge or maybe are homeless and living with somebody else. During the winter and during the hot months of the summer, activity goes up, our food costs go up, our community center is more full. When it's 70 degrees, sunny day, we don't see as many people.

Your subterranean basement, do you have any issues with flooding?

On a section of it. So it's built into several different sections. We have one section that we don't keep anything in and If the ground's saturated and we get an inch or two of rain, it'll flood. Fortunately, the section we're looking at is five feet above that section. But we are going to be looking at improving the sub-pump and drainage in that lower section just because we're going to have people down there.

I have to say, when I read the article in the paper, because that came out before council was made aware of these ideas, I think I audibly gasped at the idea of building a shelter for 400 to 500 people in a single location. I'll be interested to hear what my colleagues think about that concentration of folks. I also want to express now the concern that I have about the way that your current property is maintained. And when I, hearing your statements that the Martin Luther King neighborhood asked questions like, will there be enough case managers? That sounds to me a whole lot like a, is there going to be a traffic study? It does express significant concern to me about the project. And there are very real issues that are caused by a large concentration of homeless individuals around your location. I would want to know as part of this if we're going to consider this very large number of people potentially being housed here 24-7, what your capacity is going to be to take responsibility for the waste, the mess. And I'd also want to understand, within a modern shelter environment, it's been kind of interesting to hear the low barrier shelter conversation expand from low enough barrier that potentially you could be, and you can correct me, you could be drunk, you could be high, you could be violent, and you can still come here, to also now we're talking about low barrier enough that now you can bring a pet. Like, at what point is the threshold so, like, to what extent are we trying to build? And to what extent are people who are there for any length of time a participant in building a community that helps take care of itself? Okay. We hoped to see that with the sanctioned homeless encampment. And while there was some level of community, it was largely chaos. Sure. I would want to know a lot more about the CHAT Foundation's actual capacity to functionally run a clean and safe shelter before I could get behind 400 to 500 people on 11th Street.

I know the idea. There's been some discussion about whether it's better to have one large shelter or several satellite shelters. In cities that have done this well, the reason the low barrier shelter works is because it's paired with robust supportive services. If we were to do satellite shelters throughout the city, that means we would have to duplicate those supportive services, and the price for that would be significantly higher. And so cost is a big driver of that decision. Also, we're located where we're located, and we have the space to do this. So that's why we've proposed this. We will be submitting an operational plan that'll show how we're going to manage people, how we're going to handle staffing, so forth and so on. As far as maintaining the property, we've had numerous discussions with public works about the need for more trash receptacles and increased trash pickup, and we have seen an increase. But what you'll see is on Tuesday morning when the cans are empty, by Tuesday afternoon the cans are full. And so we have staff that every other day goes out with a big bucket, picks up trash, tries to keep it clean. But as far as being able to keep up with the overall amount of waste that happens with several hundred people congregating on that block, it's just not enough as far as trash receptacles and pickup. And so...

So you're saying that if there were more garbage cans and they were picked up daily, there would not be trash there?

Yeah. Yeah.

Thank You mr. Chair hey how you doing good so my question is when was the last time you met with the great district a MLK family that was probably 18 months ago at the at the

community meeting that Mary May held.

Okay. So you have not touched base with them since then? Not in a group. Okay. So let me make sure I'm clear. You said that you were going to bring something forth, what, the 1st of September?

Yes.

Okay. So this is now the 1st of August? Yes. So when in between there do you intend to have that candid conversation?

Like I said, I didn't want to get ahead of this council or the mayor's office on this. If I present this plan and there's no interest in it, then probably there's not a reason to inform the community. I want to do this without ruffling any feathers. I did reach out to you about a month ago to... talk about this, but did not hear back.

Okay. So, and I do remember getting an email from you, but I was thinking that was in reference to what you had come and already presented before us with not one centrally located place, that there was several other places that this could be spread out. So, I'm going to request that we definitely Stand down on this for a minute until that conversation with the MLK Neighborhood Association will be had. Because 18 months ago, I mean, anything could have changed. Anything. And what you're saying they said to you is not what they say to me. And I meet with them on a monthly basis. Okay. So we definitely need to get one accord with that. Sure. All right. Thank you. Thank you, Mr. Chair.

Yes, ma'am. Thanks, Chair. Elliot? I'm good. You're good? Most of my questions have been answered.

Okay. Councilman Henderson? Thank you, Mr. Chair. Baron, I want to, just a little bit in conjunction with some of the line of questioning of Councilman Hill, but the sanctioned homeless gap really never did what we expected. Sure. other than the obvious, how do you see this being different?

Well, first of all, our organization has 45 years of history of serving this population and the people that were chosen to run the homeless encampment had no experience doing that. They also had a process of having the residents of that encampment enforce the rules and kind of like the inmates run the asylum, so to speak. And I just think that it started out as a good experiment, a good idea, but in reality, I don't think there was enough oversight or enough experience to run that effectively.

Procedurally, it was just flawed is what you're saying. If you like, you've got a better plan. The reason I'm asking this, if it wasn't successful there and we're going to put a bunch of money into this, why do we think we'd have a different outcome? Other than the fact that I guess it's probably a little warmer in the winter and maybe a little cooler in the summer.

We obviously want to know if it's going to be successful. We've been in contact with eight different low barrier shelters to get their manuals, to get their protocols, to find out what's working, to kind of pit one idea against another idea because we don't want to go into this and just have this be a couple years of an experiment on how to do this. We have experience in providing people services and getting people jobs and getting people housed, increasing their functioning, providing their daily needs, putting them on a path to self-sufficiency. We've been doing that for 45 years. So I don't believe This is a huge step. We currently run Chattanooga's cold weather warming shelter, which we've had over 160 people overnight, men and women in the same space, just on the floor. We don't have problems running that. So I think that we have a great opportunity to do this and do this well.

The other thing that I would say, I can see some potential problems with such a large site in one location. But the difficulty in finding one location has been so difficult I can't imagine trying to find multiple sites. I think probably this might be the best answer of a large location and I can see the benefit of having all those wraparound services in one location as well.

Well, you know, our organization wants us to work for everybody. So, you know, we've said 400 to 500 people. If that number makes people uncomfortable, there's no reason why it can't be scaled down. However, if it's scaled down, it means that more people are going to be left unsheltered. And so our ability to impact all of... Chattanooga and Hamilton County is going to be reduced. So it was really hard for us to come up with an exact number of what that should be, right? I mean, we have 1,500 homeless people. You don't make it 1,500 beds because, you know, you're hoping that that number reduces and you get people housed. But what's that number where you're making a significant impact and yet you're not too large?

I mean, I think you take full advantage of that opportunity there.

I have several questions that I'd like to request of Barron when he presents back to us some things, additional information. What would you like us to do if we have points that, like, Barron, it would be great to see this in your presentation back to us?

You can email that to us. We are going to email it to you, Nicole, so that we're not talking directly. Yeah, if you can just email them to our clerk and she can collect those.

Okay, and she can compile that and then... communicate that to him. Okay great. Thank you Mr. Chair.

We do have at least one person watching on YouTube because Councilman Harvey who's not here today sent me a question. He wanted to know are you planning on holding on to all of your other properties if expansion occurs at the 11th Street location? Yes.

Okay. You said you were selling them.

When you said the other I thought you meant properties other than those three. I'm sorry, I misunderstood the question.

You said all of those other...

The three housing properties we are looking to sell. Okay. But nothing else, yeah.

So you have other property other than those?

Yes. It's not, it's just investment property. It's not developed. Thank you very much. Thank you for joining us today.

Again, council, if like council members, you have questions, send those in for our next conversation. Certainly keep in mind the conversation with the community. That'll be a priority as well.

Appreciate that. Yeah.

All right. We will switch gears now and we have Sherita here to talk to us about pilots.

Yes, I'm asking you to be ready to talk to them.

Thank you. Thank you. Thank you. Thank you.

Good afternoon, Council. Sherita Allen, Senior Advisor for Economic and Workforce Development here at the City. The presentation I'm presenting today is covering the annual pilot report. The TIF report I will have to give at a later date. I'm still confirming all of those numbers and updates on TIF projects. Based on the pilot policies, staff is required to give an annual review of all the pilots to the council. That could look like a formal presentation in chambers. It could be a report that's put in your boxes. It could be something at strategic planning. So every council has been different historically. So moving forward, whatever this council would like to see as far as a presentation on pilots, just let me know and I'll accommodate this board on that. Perfect. So let's start with our pilot and economic development programs. We have a staff of five in the economic development division that covers job creation, workforce development, and small businesses. That falls under the larger economic development department. Economic development programs, we have, and I have listed those in five different sort of buckets. And so the first three, startups, neighborhood businesses, and growing businesses, those will fall under Winston Brooks from our department, it's Ali Shrenko from our department, and then Kim Naramore. The three of them support all of the grants, loans, and initiatives that are tied to those three areas. They will provide at some point a separate report on the status of those programs. Workforce development is Dr. Andrew Hudson. Andrew and I work closely on all workforce development initiatives that are tied to TIFs and pilots. Andrew will also provide a separate report, and I think we're working with Councilwoman Hill on getting him scheduled for either strategic planning or for a next economic development committee. And then when it comes to large capital projects, TIFFs and PILOTs, I typically oversee TIFF and PILOT programs. Winston is our backup on that, and so he's the nuts and bolts numbers in the details guy. I love it. Perfect. So PILOTs. We have a full toolbox of grants, programs, initiatives, incentives that we use to recruit and retain businesses. the pilot's payment in lieu of taxes. This is a program that we use to recruit businesses to the city. They typically are competitive, so there's a but-for requirement for it. We currently have pilots that are operating under three different sets of pilot policies, and so that's just something to keep in mind when it comes to both evaluation, monitoring, and then the narrative around different pilots. The most recent revision to our pilot policies was in 2025, I think that followed Novonix that we had, and one of those provisions under that particular one was to require companies to come in and present annually before Council, and so we're working on getting those scheduled. Right now, that only applies to Novonix. We have not done the look-back on the other pilot projects. We have reached out to them. They're willing to come in and speak. It's just getting them scheduled. And then Hamilton County government has a link for pilot information. That's updated annually. If you ever want to really dig into the nuts and bolts and some of the details on pilots, you can always go visit that site and look at that. Target industry. So pilots, we work closely with the Chamber of Commerce on recruitment and retention of projects under targeted industries. So the big areas here, advanced manufacturing, professional services, future technology, and software and information technology. All of these are existing industries that are growing. They're also competitive industries that make sense for the Chattanooga region. They're authentic to what we do. We have the labor pool available for companies. It's not something, we're not doing what I would call clay mining, which is in Wheatley County in West Tennessee. We're not recruiting those kind of companies here. We don't have those assets here, we don't have that labor source here. So again, it's what's unique, authentic, it makes sense for our region. So those are the targeted industries that we're looking at here. Perfect. And then let's go into three pilots at sunset in 2025. So M&M Industries, this was a pilot from 2019 to 2025. Again, when we talk about the but for, most of these are competitive. So this was competitive. So it was a function of M&M Industries either going to Phoenix or expanding locally here. They have another facility that was in Lookout Valley. They could have expanded Lookout Valley. There was an empty, vacant manufacturing site that was off Holtzclaw. And again, the goal was to bring jobs closer to the community. And so that pilot went in to that particular area. So 97 jobs created, seven-year pilot. So the value of that pilot over the seven years is roughly $1 million. So you're looking at $995,952. You look at the cumulative payroll. This is what we're looking at. When it comes to pilots, they're called jobs pilots because the goal is recruiting jobs to the area. We're competing with other cities. These jobs could have gone somewhere else. Those jobs were recruited here. So the cumulative payroll over the term of this pilot was roughly $29 million. And then you look at the cumulative property taxes, you're looking at $1.1 million in property taxes. So again, as you start looking at the ROI on these, It would be easy just to do simple math, but the bigger picture here is that's roughly $29 million of payroll that went into this greater community. And I say greater community because all of those jobs were not for Chattanooga residents. We did have residents who were coming in from other places. Moving forward, we'd like to work on workforce development programs so that we're actually creating systems and pathways for more local residents. to have direct access to those jobs as they open up. So again, M&M closed out, that means that they have ended their pilot, so they will be paying full property taxes on the tax roll moving forward. All of our pilots are in partnership with the Industrial Development Board, That means the property goes into ownership of the board during the term of the pilot, and so all of these properties are now released from the Industrial Development Board of Chattanooga's website. So if you were to do a property search, it will no longer show their property under ownership of the IDP. OP Mobility, formerly Plastic Omnium, again, competitive project. Ten years, over the ten years, the pilot value was roughly $3 million. Their cumulative payroll, $174 million over the term of the pilot, 384 jobs. And again, this was competitive. It could have gone to Cleveland or Greenville, South Carolina, and we were able to recruit that company here. Again, looking at just a large amount of payroll that we were able to bring into this community because of this particular pilot. And so again, this one sunset in 2025, it will go back on the full tax rolls. Unum, this was one of those anomalies from previous pilot years. Pilots are not always just used for job creation. They can be used for parking garages. They can be used for public facilities. It's just a function of the will, the political will of the council at the time the direction they'd like to see pilots used. And so at the time, this pilot was being used for Unum in order to open up surface parking lots to make those available for development and for public parking and UTC student parking. So basically a $5 million pilot over 15 years, $20 million parking garage that was built for roughly 1,300 car garage for employees. Unum employees at the time, Provident, were then using the parking garages, which opened up the surface parking for the general public. It also provided some parking lots for U2C for student parking, and then roughly 12 acres for real estate development downtown. So if you look at some of the real estate that's happened in and around Provident, it's because this garage was built using a pilot that then opened that up to be sold off for development. So again, those are the three that sunset in 2025. And here are your existing pilots. We have about six existing pilots now. Coca-Cola, this one will roll off in 2027. This was an expansion with TDOT that built the Shepherd Road Bridge over 153. It was both retention and expansion. So the competition for this one was Birmingham. Those jobs could have gone to Birmingham. They were recruited and we kept them, we were able to keep them here. So on this one, you will have a retention requirement on it. So jobs retained 270, jobs created 64. Value of the pilot, six million. Cumulative payroll to date is roughly 35 million. And then the cumulative property taxes, they paid more than four million in property taxes on this particular pilot. Perfect. And then let's go on to Gestamp. Gestamp, another anomaly under different pilot policies. And so there were two Gestamp pilots, and this is the second pilot. Typically what happens is VW was recruited, VW received an incentive, and their suppliers typically are not incentivized because they're coming for VW, and VW got the incentive. However, if there's a supplier and we're competing with another area, and that supplier has other OEMs, other equipment manufacturers they're servicing, that's bringing new dollars into the economy. In this particular case, Gaston was servicing Mercedes, BMW, Ford, and VW. And so that's a case where we said, okay, this is competitive. They're bringing additional dollars into the economy. This is one we want to incentivize rather than have Gestalt go to another city. 571 jobs, pilot value roughly $5 million, $250 million in cumulative payroll impact, and I stutter when I say those numbers, and I said this to Weston Porter, our CFO, I'm not usually thinking in numbers like that, and so to see how much payroll this community has received from these pilots, it's staggering when you start to add it up.

It's a good way to look up these numbers.

And then cumulative property taxes, they paid roughly 10 million in property taxes, so again, That one we have until 2029, and then it will go fully on the tax rules. Excuse me. Steam logistics anomaly. This was a different one. And so this one, the pilot years are 2023 to 2031. This was really about redeveloping the entire block where the John Ross building had been sitting vacant for two decades. The value of the pilot over 13 years is... $525,000. Thank you. And to date, they paid roughly, their payroll impact has been roughly $11 million over the course from 2023 to where they are now. And so when you look at the number of jobs, I know, I see some furrowed brows here. The numbers don't seem to make sense. It's because there was a time when they were high employment, and then they had the tariffs. They had some of the layoffs that happened due to trade talks. all of those kinds of things and so they were high employment low employment now and again it's just the cyclical nature that we've seen with some of the logistics and trade firms so again $525,000 incentive $11 million in payroll impact and property taxes have been $132,000 to date and these are our last three and then I'll cover the annual report very quickly so Volkswagen The pilot years for this one is 2010 to 2039. The pilot value over 30 years is $238 million. If you look at the payroll impact, it shows $2 billion. That's just for 2016 to 2025. So that's as far back as I was able to document the numbers. We have new economic development software that we're currently implementing, and so we're populating all of that data into the system and migrating it over. And so until we're able to go back to 2010, I didn't want to put those numbers in. So that's just the impact from 2016 to 2025. Cumulative property taxes, they pay roughly $50 million in property tax. And so we're pointing out the cumulative property taxes because that goes into general fund. That's what funds our budget. Part of that is the property tax. And then the payroll impact, that's what gets spent in and around our community. So when thinking about jobs pilots, it's not just number of jobs and wages. It's also payroll and then property tax. I know everybody heard that phone drop. That was me. I saw lots of heads moving. Okay, and the last one, the acronym for this one is YF. We call it Young Thing. And so this one, 332 jobs. The pilot value over 10 years was roughly $1 million. CUNA payroll, $490 million. Again, this is a company with an exportable product or service. They're servicing other OEMs, other equipment manufacturers. It's not just for VW. And the property taxes that they paid is roughly $1 million on that. Last one, Big Blue. They have two pilots, one existing that was pure graphite, The pilot term starts in 2026. So that's when we'll start reporting on jobs, capital investment, all those other things. And then Novonix, which was just approved in 2025, their pilot term will not start until five years after property closing. And that happens to give them a ramp-up period. They've got to build a facility. They've got to move in the equipment. They've got to calibrate the equipment. They've got to train the employees, hire the employees, all those other kind of things. So those are the two where we don't have numbers yet, and they're not showing up in your annual report. And I see a couple of questions.

That's Woman Hill, then Henderson, Elliott, and Dudley.

Would you like for me to go over those or the final, the annual report before we start?

Do the report.

Yeah, that'd be fine. Okay, okay. So historically, this is the one sheet report that council receives every year that's on the status of our existing pilots. This is a snapshot in time. And so for instance, if you were to look at this sheet, this sheet, which was updated in February and the final taxes paid, we received those final numbers in June. This is a look back to performance from 2025. So what happens every year is, every October, the company gets a heads-up letter from and call from the Chamber of Commerce that says, hey, you've got some numbers you need to report to us by December 31st of this particular year. We just want to let you know, here are your performance requirements, and this is what you need to provide us. The company then sends everything in by the end of the year. The Chamber gets that information. They spend January and February scrubbing it, confirming it, validating the numbers, and then we typically get the report in March. From there, we then pull together our updates internally and start briefing elected officials on companies that are not in compliance, companies that are ready for clawbacks or penalties, so that we're all ready for those kind of pieces. We have had companies in the past where we have done clawbacks and penalties. And what that looks like is notifying the plant manager, notifying HR, notifying their legal team. having that conversation, and then notifying the county, notifying the trustee, notifying the assessor. And then it's notifying both mayors, and then it's notifying city council, and then it's notifying county commission. There's a 14-step process if a company's not compliant. And we start that, typically, we will start that in May of a year. If you look at this, most of the companies have met their, if you look at the items in blue, in that center column that's shaded in blue, that's their investment commitment. That investment is what's driving your property tax. And it's both tangible property and it's real property. And so again, it's, hey, Coca-Cola bottling, their investment commitment was $62 million. Contractually, they were required to meet 100% of that. So that's the other $62 million in the next column. And then the last, the actual investment, they invested $64,422,972. That's where they exceeded their commitment. So if you look at the actual investment, that's the actual investment that's driving the property tax numbers that you're seeing before. We get that every year. And what that means is the company could make additional investments next year. And so that number could look different. And then let's look at the contractual in the yellow. The yellow is the jobs commitments, and that's where by contract it says, okay, if you're coming in and you're receiving this incentive, you need to retain 270 employees and you need to create a net new, another 43. They actually retained the 270 and they created 64. And so you go down and look at those. You'll notice that at Unum, because it was a parking garage, there was no job commitment on that particular one. Let's look at wages. Part of the point of pilots is recruiting jobs that have higher wages. And again, it's how do you bring in jobs that have higher wages and then you backfill the entry-level positions with folks that need jobs that are new to work. And so that's looking at Again, the commitment for the first one, Coca-Cola, was commitment of wages of $45,000 a year, and they actually ended up at $64,000, $445,000 a year. And then the last two columns, you're looking at the actual taxes paid that year, and then their actual annual payroll that year. And that's where you are getting those cumulative numbers that I provided earlier. So that's what, moving forward, that's what your annual report typically looks like. It's a snapshot in time, so that when you get it, just recognize, hey, I'm just seeing 2025. I'm not seeing 24, 23, 22, 21. I'm not seeing all of those previous years. It doesn't mean we can't change the report. It just means, historically, this is how we've done it. And if we'd like to see it, you'd like to see it in a different format Moving forward, we're happy to work with the Chamber to do that. And so for that, I'll take questions. Okay. We do have 20 minutes for questions.

We'll start with Councilwoman Hill. 20 minutes?

Thank you. Thanks for giving us one more time, Mr. Chair. So I will... I really appreciate, Sherita, how you did this report. I do have questions about how I feel my colleagues will ask a lot of the same ones, so I'm going to not go for that. But I would, while you're here with us, I'd appreciate it if you could give us an update on the IDB's decision yesterday. It is related to the Bend TIF. The Bend TIF. And while we're not officially going over a TIF annual report, it's something that the council needs to hear about today while we're here. So, Mr. Chair, it's up to you if you want to hear that now or if you want to do questions on this first.

Let's stay on topic with the questions and come back to that. All right.

Thank you. I just want to make sure we hold time for that.

Okay. Is that all you had, Councilwoman?

Yeah, I will yield my time. Thank you.

Councilman Henderson. A couple of questions. While we're on this slide, Rita, I think one thing maybe that I would like to see, and I don't know about the rest of the council, actual taxes paid versus maybe what they would have paid without the pilot.

We have that.

We do. I mean, if we could put another column there that would show what our gain is, like what kind of difference we're making. It seems like we do have some companies that have not lived up to their actual jobs at this point in time, but I'm assuming that they have more time to meet those requirements?

Some of them do, yes. And so, for instance, if you look at the fourth column over that says determination date, that's the date when their pilot officially start. Officially what? That's when the monitoring and the evaluation officially starts. So we do have, for instance, if you look at Steam Logistics, their determination date is October 1st of 2026. And so that's when their job creation numbers should officially start, and we'll start monitoring. So when we get to 2027, well, January, April of 2027, when we have that report, we'll know where their standing is for the end of the year, and that's where we'll start to look at what penalties might apply for that.

okay and then i mean there's some others on here as well i mean i haven't actually just i'm taking a look at um started in 2023 they had 660 commitments and actual jobs so they're a little behind there they are that's correct and so like when do we begin talks about you're not meeting

We have those talks. What happens is we look at their development. We look at their contractual agreement, and typically there are performance requirements. And what it looks like is, for instance, contractually you needed to meet 528, and the actual jobs is 571, which means they're compliant based on their contract for that particular project.

Versus the public presentation.

Exactly. Yes, we've been having those questions too. And so what happens is the contractual commitment is tied to how the state awards their their incentives. So for instance, if you receive an incentive from the state, and you also receive an incentive from the local municipality, the state requires that you meet 90% of whatever commitment you're saying you're going to meet. And so the local municipality usually matches up with that. Which is where you're looking at, for instance, Coca-Cola did not receive a statement. So their investment commitment and their contractual equipment are 100%. Jobs, 100%. And so the ones where there's a little variance, typically there was a statement.

I've got a few more questions. So once everybody else, if we've got time, come back to me. But can I make a suggestion that we maybe talk about the

That's exactly what I asked for.

No, no, an attorney client during our break. I'd like to make that suggestion.

The attorney likes it. Okay. I will stand now. Councilwoman Dotley.

Yes, thank you so much. Thank you, Sherita, for this great presentation. I was going to ask, one, can we just get a copy of the presentation? Yes. And then, two, kind of leading to what Councilman Henderson was saying in regards to the taxes, can we also get, for the ones that are ending this year, can we get the full property tax of what they'll be paying now, now that their incentive has ended? Yes. Okay, that's it. Thank you, Mr. Chair. Thank you, Sherita.

Thank you, Chairman Dix. I'm sure that you may have covered this, and I'm still trying to wrap my head around the numbers, but if we could go back to Steam Logistics. So their pilot year does not expire until 2031. So how do we, what, like, is there like an annual, like, for instance, if they were contracted, or if their job commitment was 400, is it somewhere in their contract that they add a certain amount of jobs per year?

They did have phasing in for their particular incentive, and we have looked at their agreement. And so what's odd about that particular project is they ramped up quickly and actually met their job numbers and then fell off their job numbers. But they were not in that, which is where you see that $11 million in payroll. It's because they created those jobs at one point, but then... because of tariffs and taxes and everything else fell off of that.

So when we talk about compliance and their pilot year doesn't expire to 2031, they started, they met that job commitment, fell off, it's 2026. What's the annual evaluation criteria? Like, are they supposed to be creating a certain percentage of jobs per year in this phase in? I think you said phase in?

It depends on their contract. So once they are not compliant with their contract, and if their contract says they should have a certain number at a certain point, then what happens is it's triggered at the county level, and then their taxes are increased.

So can you give me an example of what that is? Like, what is... You said it's per... It's not like a blanket expectation for all of them. I guess what I'm trying to ask, what's the expectation for the percentage of jobs they're supposed to add annually when there's still a runway left in their pilot year? Like, can you give me an example? For STEAM, let's go with STEAM. So contractually, they started, they fell off, they haven't took 2031. So next year, what would be their expectations for job creation and commitment?

Their evaluation starts in 2027. So if their determination date when they start ramping up is 2026, that's when we start monitoring. We will start monitoring against that contractual equipment that contractual commitment of 360. We will measure against 360 in January of 2027.

I'm just curious to know what that contractual commitment is annually for job creations.

It varies on contract.

I'd like to know what they are per contract.

I'm happy to send you all the contracts.

Thank you.

Thank you, Mr.

Chair. Thank you, Mr. Chair. This isn't a question, this is a comment. I just overheard some conversation at Coca-Cola. When a pilot is successful, and we've shown a lot of success, other cities look to those successes. And I know that Birmingham, Coca-Cola came here to Chattanooga to see how they created the environment they did working with the neighborhood and working with TDOT. And it was a proud moment, because I know the work didn't have anything to do with me. It had to do with you and others that came before me. But it's really cool to see and hear those successes when other cities are coming here to say, how did y'all do that? So congratulations. I know we still have a lot of work to do, but congratulations.

Did everybody go around the horn? I do have a follow-up. Can we go back a slide or two? And I want to understand. Right there is fine. Is the pilot value over 10 years, is that the amount of taxes that we're abating through the agreement? Yes. Help me understand then the difference in the cumulative property taxes. What is that number then?

That's the number that they are paying. So what happens is we're not abating, we're not, our pilots are not 100%. Highlands.

Yeah, yeah. Not 100% abatement over the length of, well, at least our, in the last 10 years maybe. Right. We have a step, I know we've had a step.

And so they typically step down. So like they start out.

So that cumulative property tax is taxes that's going into our general fund.

Absolutely, yes.

And that number would reflect, scroll forward again now. that cumulative property tax goes towards actual taxes paid.

Actual taxes paid.

So that number accumulates to give you that number that you just gave us.

So last year Coca-Cola paid $402,000 in property taxes. Gaston paid $705,000.

And so what you do is you calculate or add all of those actual property taxes paid each year to give us the cumulative over the length of the pilot.

Correct.

And that's how much is going into the general fund?

Correct.

During the pilot process, or terms of the pilot?

Yes. Okay. And so our pilots typically are, depends on pilot year, some of them are discounted roughly 30%, some a little less than that. And so once some of those sunset, you'll be getting an additional 30% in taxes on top of it. But it varies depending on the year in which the pilot was approved because the policies change.

Yeah. Okay. Thank you. That's all.

Anything else, counsel? Okay. Well, just a reminder, our next strategic planning on the 18th, that's a time set aside to hear from council members about things you've been working on, hoping to work on, priorities that you have. I know Councilman Henderson is on the agenda with Dr. Acuff. Dr. Acuff. Right, to talk about some budget issues for his work that he's been doing on the budget. So please, if you have anything else, get it to me. We'll get it on the agenda. Other than that, we'll be adjourned until 3.30.