Chattanooga Industrial Development Board Meeting - August 4, 2025
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Chattanooga Industrial Development Board Meeting - August 4, 2025
The City of Chattanooga Industrial Development Board (IDB) met on Monday, August 4, 2025, with a quorum present. The board considered a performance-based grant for Master Machine Inc.'s expansion, heard public comments on incentive transparency, and discussed the legal authority for a prior housing-related funding approval.
Public Comments & Testimony
- Helen Burn Sharp, representing the public advocacy group Accountability for Taxpayer Money (APM), questioned the transparency and necessity of the proposed incentive for Master Machine Inc. She asked whether the High Growth and Investment Program had been codified by the City Council, what criteria were used, and whether a "but for" test (demonstrating that the incentive was necessary for the project) existed. Sharp noted that press releases suggested the expansion decision had already been made, and the resolution stated construction would begin by July 15, 2025 (the previous month). She highlighted that $27 million in property tax revenue was not collected in 2024 due to tax abatements, PILOTs, and TIFs, and questioned the message of granting incentives when the city council is considering a property tax increase. She urged the board to discuss these issues and recommend changes to improve transparency.
Discussion Items
- Presentation by Chamber on Master Machine Inc. Expansion: Sharia Down (Senior Advisor, Economic & Workforce Development) and Adam Myers (Vice President, Economic Development, Chattanooga Area Chamber) presented a proposal for a performance-based grant under the High Growth and Investment Program. Master Machine Inc., a company specializing in nuclear power and defense manufacturing, plans to relocate and expand from four buildings totaling ~40,000 sq. ft. to a single 79,000 sq. ft. facility at 200 Comper Street. The project involves $7.7 million in real property improvements and $2.5 million in personal property improvements. The company projects creating 45 new jobs by December 31, 2029, with an average wage of $72,330 (approximately 111% of Hamilton County's $65,000 average wage). The grant is $135,000 ($3,000 per job) paid over multiple years, split 50/50 with Hamilton County (county vote scheduled for August 6). Payments are contingent on job creation and retention, with annual compliance verification. The program targets companies that do not meet PILOT thresholds (minimum 100 jobs and $20M investment). Warren Brandon (President, Master Machine) confirmed the company was acquired by NWS Technologies (Spartanburg, SC) in 2023. He stated that growth is driven by increased demand in nuclear energy and defense. The company has no formal veteran hiring quota but values veteran skills and work ethic.
- Legal Authority for Prior Housing Funding: Board member Mr. Rogers raised a concern about the IDB's authority to allocate funds to a housing project (James A. Henry project) approved at the July 14 meeting. He noted that the recently enacted Tennessee statute (effective May 2, 2025) under T.C.A. § 7-53-318(b)(3) and broader authority under T.C.A. § 7-53-101 provide such authority. City attorney Mr. Knoblett and outside counsel Mark Mamontoff confirmed the IDB's ability to fund multi-family housing with infrastructure components. Discussion included that additional legal opinions from outside counsel (e.g., Mr. Kelly of CHA) are paid from IDB funds when outside the normal course of business, but Mr. Kelly did not charge. The board thanked staff for the clarification.
- IDB Debt Report: Wes (City CFO) presented a state-required debt report, noting the IDB's debt obligations are now filed with the Comptroller's Office.
Key Outcomes
- Resolution Approved: The board voted unanimously (all ayes) to approve Resolution 2025-08-04-1 authorizing the chair or vice chair to execute a Project Grant Agreement under the High Growth and Investment Program with Master Machine Inc. for a competitive, performance-based grant of $135,000. The motion was made by Mr. Chairman (with commendation for high wages) and seconded.
- Next Meeting Date: The next regular meeting is scheduled for September 8, 2025.
- Meeting Adjourned: The meeting was adjourned after all business.
Meeting Transcript
Everybody, I'd like to go ahead and call this meeting to order of the City of Chattanooga Industrial Development Board. Today is Monday, August fourth. Just want to note for the record that we do have a quorum present, and this meeting was uh duly noticed. Uh, board members, you will have the minutes from our July fourteenth meeting, which is the last time we met in your packets, and invite you to have a look at those, and if there are any questions or things we need to discuss. Please say so. All in favor say aye. Good morning. Helen Burn Sharp accountability for taxpayer money, APM is a public advocacy group that focuses on tax incentives and transparency. And this is my comments are about both today. Master Machine Inc. plans to relocate and expand its Chattanooga workforce, projecting about forty-five new jobs. That is good news. It sounds like a great company. Number one, did the City Council establish the high growth and investment program by resolution, as they did with your growing small business program. Number two, if so, what are the criteria that must be met? From the information provided in your agenda packet, it appears that the informal program criteria may be 25 new jobs over three years and an average annual wage of at least 80% of the current Hamilton County wage. That's a pretty low bar. The other criterion for this program seems to be that the project is not eligible for a pilot, where you and the city council have established standards on the number of jobs, amount of investment and wages. Third question is there a but four test in this program? In other words, is a tax incentive necessary for a project. Recent press releases on this particular request read like the expansion decision on this project has been made. In fact, your resolution even states the grantee will commence construction on or before July 15th, 2025, which was last month. Here's why this issue matters and is timely. Local property taxes are paid into the city and county general funds, which are the primary funding source for police parks, libraries, and a myriad of other city and county services. Tax abatements pilots and tax diversions TIFFs reduce revenue that would have gone into the general fund to pay for these services. In 2024 alone, about $27 million was not collected due to these incentive programs. Many of these incentives, like the VW pilot and the Stadium and Bend TIFFs, last 20 to 30 years. The city council currently is in the unenviable position of needing to improve an increase in property taxes. The public is questioning how much belt tightening has been done by the mayor's office and preparing their recommended budget. What sort of message does it send when the IDB is asked to give what would have been taxpayer dollars if they had been collected to a business that was going to expand here anyway? It sounds more like a more of a reward than an incentive. The funding source for the high growth and investment program is economic development fees paid by pilot and TIFF recipients. When this program was established over 10 years ago, it was set up to bypass the city council. The mayor's office recommends how the IDB should spend this money. It is typically for economic development activities, but last month, you may recall you were asked to approve funding for the James A. Henry housing related project on the West Side. Conclusion, you're in an unenviable position. The company has likely been told that the grant is a done deal. I recognize the total dollar amount in the larger scheme of things isn't huge. But I think we're in an era of where you know public trust really could be increased if people felt like that the policymakers were really looking at this and were trying to do some belt tightening and we're only spending property tax monies in areas where they're really needed. So my request to you is that you please discuss these issues and recommend future changes that would improve transparency. Thank you. Thank you. Anyone else with sure justice board this time? If not, we will move to our first item number five, a presentation by the Chattanooga Chamber regarding Master Machine Inc. expansion opportunity. Good morning, Board Shrey Down, Senior Advisor for Economic and Workforce Development here at the City of Chattanooga. I'll start by reviewing the staff report that we provide for each of the items that we bring to this board. The staff is recommending approval of this item. It's a performance-based grant in that the company has to create the jobs before the performance is paid out.
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