Can you get approval of minutes because we don't have quorum?

So we'll just go ahead and get started on agencies.

We've got a agenda in front of you this afternoon for this afternoon.

Agency funding, early learning after school care, community land trust, follow-up, economic development demonstration, and then if Councilman Harvey shows up, I think we'll talk about a budget policy resolution.

So Chief, I'm gonna turn it over to you for agency funding proposals.

Great.

Thank you, budget chair, appreciate it.

Good morning, Council.

How are y'all?

Morning.

Um so just to kind of remind folks where we are on this.

In in the initial proposal that the mayor put forward, we had a hold for agency funding.

That's what I'm referencing when I say a 2407 up at the top.

That hold was for four million dollars.

Um in the last couple weeks been working with with many of you on this list, just talking through the different organizations and initiatives that we're proposing to fund.

And so what this represents is the latest and greatest version that I think that I'm hopeful accomplishes um what we've funding for what we view as as kind of the critical civic infrastructure that we initially put forward um as well as some net new items that I want to highlight.

So at the top, um, this is strictly out of that A2407 four million dollars.

Um the only change relative to the first iteration of this document is that the Chattanooga Regional Homeless Coalition came in at 861 as we've been working.

Our finance team has been working with them directly.

Um we had we had held 880, but it came in at 861.

Um, and then I've added transform ministries at 50,000, which is the last item in that first section.

Um this is for a program called End Zone.

Um this is um Joe Smith's group and and they work with at-risk children um and after school from ages 10 to 14, and so this is operational support for that program.

Um this is a request that came in from Chairman Davis.

And and then at the bottom, the reason that I just pulled these out is because I want to explain how we're proposing to fund these.

Um these other four items.

So the grocery store incentive program that we intend to set up through the IDB for 150,000 to try to um encourage a grocery store development in uh one of our uh most severe food deserts in town.

Um we're gonna fund that from we're proposing to fund that rather from the economic development reserve fund.

Also dropping down to the bottom of this list at the bottom is you'll see preserve Chattanooga.

This was a request that we came in that that came in that was originally not included in our initial proposal, um, but one that has been advocated for and we would like to support them.

We we can fund it through the economic development fund as well.

This this money will be used to help um spin up the their operations a little bit by um helping them fund for one year a a staffer um who is going to come up with their permanent plan to uh to retain that funding.

And then jumping back up to the second item in this bottom tranche, you'll see again this is the extended child care James A.

Henry.

So 75,000 of the 200,000 cost is gonna come from a 2407, and then we're proposing to fund the balance from ARPA.

You may recall from last year's budget.

We set aside a a kind of like a contingency allocation from ARPA that we thought that we may need to use to support operations as they were transitioning to James A.

Henry.

We did not end up needing to use that, and so this is a reallocation of those dollars, so it's a reallocation of a re of a reallocation.

Um, and then net new underneath that one is Grace Impact Center.

Uh we're proposing to fund this one at 200,000.

This is a another violence intervention initiative.

Um this is a request from Councilman Clark and would serve the Brainerd Middle and that neighborhood.

Councilman Clark, would you be willing to share a little bit more about that?

Absolutely.

Um we have we our current violence reduction initiative that we fund through community haven't has a footprint that's only identified in one particular council area out of pretty, I would say pretty hefty amount.

Uh this Grace Impact Center has a program called the Opportunity Development Initiative that will focus in some of the hot spot that overlaps District 9 in the East Elk community and the Woodmore community around Brainerd High School and Tiner High School.

We felt that there was a need, Brainerd High School in one year saw six, nine black boys killed due to gang violence out of their high school in one school year.

And I currently we don't have any programs, including the Curve Program or Community Haven in that hot spot working to do violence reduction initiative.

So the mayor's office has been so kind to fund this at a level as a pilot program starting in August that'll be working at our community centers, Brainerd High School and Tyner uh middle school as a violence interrupter with high schoolers, uh, which is where we see the origins of gang activities and violence that oftentimes spread into our streets.

Uh, the other key one of the key metrics, uh, not to belabor this is that schools like Brainerd High School has the highest absenteeism rate uh in the city.

Um we one of the metrics that Grace Impact Center will be working on is working directly with community Ford, the school systems, uh school support person to hone in on those individuals because what we've learned when they're not in school, guess where they're doing in my district.

Gang banging.

Well, yeah.

Yeah.

Anyway, so this is a pilot program uh that we will be releasing some metrics.

You know, metrics are really big for me.

You know, you've got to, if you say you're gonna do something, you gotta tell us how you're gonna do it, how you're gonna measure it, and what the impact is.

And so this is a supplemental program to the mayor's violence reduction initiative that that'll be in district five and nine.

Thank you.

Thank you, Kevin.

I appreciate you for that.

Any questions?

We're really coming at um gun violence from a lot of angles.

Um it'd be interesting in the coming budget year just to get some reports on here's all of it all at once.

Because you know, sometimes we'll get a report from uh community development or well, the mayor's office, wherever the 423 chain breakers are householded and in the structure.

Um, we'll get a report, you know, from one small group.

But I think it would be pretty helpful to have that full picture of here are all the different grants, here are the pilot programs, here's community haven't.

Oh, yeah, community haven also has 650,000 in addition to this.

So, like all of it together so that we can, and I think you know, we've got um we've got the team mentoring, um, transform ministries.

Um, anyway, you you hear where I'm going.

I think that that would be really useful for the community and for the council to really see the full picture of how the administration's tackling gun violence.

Absolutely.

I share that desire.

Um, I've had a lot of good conversations with Councilman Clark and Councilman Elliott and with others.

Absolutely want to build out kind of a common operating picture for the CBI ecosystem to understand what are all the programs, where are all the programs, what is the funding stack looking like, and then how are we tracking impact both qualitatively and quantitatively?

You know, a lot of this work, especially like on the DOJ side, is relational, right?

It's it's about trusted messengers and kind of these multidisciplinary partnerships that exist and and they do exist, but being able to tell the story and and being able to have metrics at the ready is critically important.

And I know that many of the metrics do exist, but but I have not, I've actually had a challenging time even since last week of pulling together, you know, exactly what are we looking at, what are we reporting?

Um, and so we make that happen for us on short order.

Okay.

Yeah, I mean, it's not dissimilar from homeless ministries, right?

So many people feel a call to this type of work in the same way they feel a call to homeless ministries.

There's a a lot of resources being deployed by the community by the government, you know.

Um I think also within that, would it be important for us to include um our Chattanooga Police Department and the community policing work that they're doing because obviously that's a huge part of how we as a city participate in that work.

Thank you.

Thank you.

Sorry, Mr.

Chair, a small group I didn't raise my hand.

I'll do I'll try to do better.

Um pre cash, right?

Um I I because I cannot stress enough the work of our police department.

You know, when they came into our budget hearing, they had metrics.

Yeah.

And and I and I don't want to leave this budget hearing or this meeting without stressing the disappointment not to write on the parade of the work we are doing that when this information was requested from the Department of Community Development a year ago now.

We did we don't have the metrics from the department, our Office of Public Health, or from the administrator.

So I want to be on the record and reiterating that and how disappointing that is, I believe, to the council that not only was it requested, but it was not sent over.

Um I plan to follow up in writing with that to the mayor to the mayor himself, because to your point, we have metrics, and when you come before a budget hearing this way, you know, we have departments from early learning to the police department that are saying this is what we did, this is how we measured it.

This is what the success rate was, and we're really really struggling with the department of community development to really understand like how are they really developing the community?

And that's not before everybody, some of my colleagues on council get all in up or he's trying to cook community.

No, we're not.

We're actually need to put more into community development because as we see what's happening in the streets, we need these partners.

Like we need, I did not know that was Joe's group transform ministry, but my brother, who you all know is deceased from gang violence, was a member of that program.

Um so for me, this is personal um for my community because again, these are our neighbors that we are burying.

You know, Dr.

Crystal Sorell's the principal brain called me just last week, buried six children, um, and then three of them could not return to school due to gun violence, and none of our programming is in that school or in that area at all.

That's crazy.

And so I just want to, I can't, I the police department.

I tell people amazing work as much as critical as some people may be in my district about the police department.

I know their crime suppression work and their detective work to solve cold cases.

You know, Chief Chambers is not gonna credit for what he's doing to uh reduce violence, and I think there are certain groups who have not produced data that are actually getting credit for what the police department is doing.

And so I'm gonna be very critical of that and probably ask for an audit um from the city auditors department to determine like how do how do we do community development?

What to your point, what is it?

How do we measure it and is if it's working?

But we don't know because they have not produced any metrics or results at for tangible on paper for us to review.

So I just want to be on record in saying that.

Chief, is that something that we can get in in a format?

We gauging our replacement community development.

Yes, certainly on the on the violence piece specifically, but I know that you're also talking about the department on a on a whole.

We can um Darren, I don't know if you are in a spot right now to speak to that.

Is there anything pending in terms of coming out with their current one-year plan and sharing the okay ours with the group?

So there is a substantial data that they've obviously been collecting over now about seven, eight months, and uh with Veronica's helping collaborate that data.

So I would say um yes to answer your question.

Uh before how soon, I don't know.

I would have to reach out and you think that yes, that now we can place uh especially with Veronica and for background and and and analysis and data gathering.

No the answer is you give me a timeline, I can check and see if okay I don't want to just give one arbitrarily right here, but I think that we can all see that there is a um strong desire to have a common operating picture, including metrics, roadmap, what are we measuring, where are we going?

So we will certainly work to establish clear line and follow up on that one.

Okay, thank you.

Thank you.

I think that's I think that suffices.

You know, you y'all had a year.

I'll say that, but I don't know how much skill set in a the administrator and the deputy should it would how long it would take to pull data that should already be readily available.

Um so I think I would like to set a realistic timeline.

Um what would you like to say?

I like to see it before the end of our budget year.

Uh ends, which is June 30th.

So that's a month.

Remember, last year it took y'all nine months to figure and to hire a new deputy.

That's it, Mr.

Chair.

Thank you.

Um I've got a couple questions.

Um ARPA dollars is my understanding.

We have to have those spent by the end of 2026.

Is that correct?

That's not correct.

So um we let's see, two years ago, the Department of the Treasury basically put out two um two courses of action that municipalities who received ARPA funding could take.

One of them would have required this deadline.

The other one basically you were able to take the ARPA dollars, and I don't want to speak out of term, but I'm gonna give it a shot to clean me up here.

Um you could take it and effectively write it off as lost revenue, which effectively washed it of its ARPA designation.

And and so we hold them and we still call them ARPA dollars.

Okay, we're but they are but they are actually no longer ARPA dollars.

They've been laundered.

Okay.

They've been washed a laundered hand washed.

That we uh that we took advantage of.

Is that pretty good?

For the record, right?

Can we make them right?

Clean the upgrades.

No, no, no, no.

No, that's right.

That's fine.

We're also on that we've tasked, we have uh a kind of a grants management team, and we kind of have all this money earmarked for different things.

It's just some of the groups, it's just taking a while to get everything in place to draw it down, but I've tasked that group who falls kind of under finance to like let's just get it spent.

So the plan is to get it spent this year, regardless of when it needs to be spent.

There's just a few things.

We're close on most everything of getting it drawn down and now in the community where it needs to be, it's just getting through some of the red tape on different different items.

Um, and then again, this one in particular was set aside for sort of this purpose for early learning at James A.

Henry, we just kind of re reworked it just a little bit for extended hours here.

But yeah, there's most all of it at this point has been spent or is in the process of drawing down, and then the plan is be done with ARPA this year, so we don't have to talk about it or think about it anymore.

Um, and then get it working.

So yeah, okay.

Uh that makes sense.

Uh I and I think I remember that now, but we keep referring to that as we do because dollars, but it's technically and the reason one of the reasons that we continue it it continues to creep up is because as long as we are holding, like for example, we we had set aside 2.8 million dollars for a low barrier shelter.

So that so that money is in an account.

Well, it's bearing interest, and so the the interest is also something that we incorporate into our budgeting.

But as long as we have kind of like that uh that corpus, it's gonna continue to create interest.

And so we want to spend it down, we have to track it, and it's kind of like its own little uh couple of line items.

It sounds better than calling it's flush fund, right?

Yeah, okay.

Um did you have a question?

I do.

Can I follow are we still on this?

Well, yeah, if it we're is it relating to the ARPA dollars that it is to your comment that you made about the low bearing shelter uh council?

Morning, good morning, councilman.

When we set aside funds for things like that, because ARPA was set aside about how many years ago?

Three years ago.

Three years ago, and so when four years ago.

So for the low barrier, the low barrier shelter, those funds that are currently drawing interest, but they we won't move.

Do we move that what's the budget policy as far as us moving that around?

Like, does that it does it just stay there?

Or if you all if you're holding it there, you can't say, oh, well, I need to you know take a million here and put it into a you know, I don't know.

So the council has approved through a series of resolutions um over time, specific usages that are allowed for for those dollars.

We can't change those usages without coming back with a new resolution.

And so this 125 ARPA kind of supplement for extended child care, James A.

Henry.

This isn't the 125 portion of that is not gonna be in the budget ordinance, it's going to be its own resolution through which you guys will give us the authority to change the the usage from what we had last year.

We're gonna do it at the same time because it it does have a budget impact, but that's the way mechanically it works.

So no, we cannot just change it without coming to you guys and getting because it's specifically earmarked in the ordinance for for that money.

It's it's not in the ordinance.

Um it is specifically earmarked via resolution.

Resolution, not budget ordinance, not the budget, it's not in the budget ordinance.

So that goes back to my question that if it's not in the budget ordinance, that means it can be earmarked or moved around because our resolution has no I don't know the word sticking or power, is that for when it comes to line item budgeting?

So um Western answering that real quick.

Okay, look at that.

I'm so sorry, back up this that has to show up somewhere in the budget.

No, no, that's what we're gonna do.

The R proportion does not.

So we don't account in our budget, does not we do not budget for the grant dollars.

It was done via a separate resolution that earmarked those monies for something, and so then when we come back to say we're not gonna do that, we're gonna change it to something else.

We introduce a new resolution to reallocate those dollars to whatever the new purpose is.

So you guys not not you, but this body approved that at some point in the past, and so we bring it back to you guys to say, hey, we want to move it, and you guys approve it at that point.

I get that.

Y'all are not answering a question.

So what you're saying when we pass a resolution that a resolution does not have the same authority as an ordinance does in a line item budget which to my question, that means it can be moved around.

So if we have earmarked two point, what's the amount for the lower 2.8 and it's a resolution, they can move it around.

Sure because it's a resolution because we have not enshrined it as in the ordinance.

Okay, well, and as a council, we can change ordinances too.

We can change anything.

But the so what we're doing is this budgeting process, we are for the most part.

Well, we are looking at general fund dollars, sure, um, a handful of enterprise funds, and our capital budget.

There are things that are not in this budget in these budget documents, like the risk department's four million dollars is not in this general fund budget because it's not a sp it's funded by way of department allocations into the risk department.

Gotcha.

So there is a whole separate, which is something I hope we would talk about today.

Um but yes, if we pass a resolution that says we're gonna we're gonna put money toward ARPA dollars toward the um toward the homeless shelter, we could absolutely change our mind.

Now, if we were to move that the way that, for example, um some of the economic development dollars go into the HEB or they go to the IDB.

Once that's there, then it's out of our coffers, it's in somebody else's bank.

But but yes, if it's sitting on our books as a council, we a hundred percent have the ability to change that if we wanted to, but typically in a situation like that, once we've made a commitment like that, we hold to that commitment.

Through resolution, that's right.

Through resolution, or like a grant dollar allocation, the way that ARPA was a grant dollar allocation, not a general fund spectrum.

Through ordinance, yeah, yeah, yeah.

General fund is absolutely through ordinance.

Gotcha.

So you might have answered my next question through this path.

The line item then for whatever it is A20407 hold for agency allocation.

Is that is that line item now different than four million dollars?

It is not, and that's why I have the breakdown.

So the four million dollars is the general fund allocation.

There are some additional things that go beyond the four million dollar projected general fund revenue for this purpose, and and so that's why I broke out at the bottom how we're how we're going to fund those additional um initiatives.

Well, I guess the follow-up kind of along the lines of council McClark, how can we ensure that the grocery store incentive program is codified through ordinance?

It will be codified because economic development funds are codified through ordinance.

So that's a recurring revenue.

It's in our budget budget ordinance.

So we will just that so on this whole list, the only thing that we're going to accomplish via resolution is that 125,000 ARPA reallocation.

Okay.

Everything else is either general fund or economic development fund.

Which is in the ordinance.

Right.

Okay.

Thanks, Mark.

So the so the let's just say then for the 200,000 that we put into the Grace Impact Center.

That's going to show up on a line item in the executive branch.

Absolutely.

Well, it's going to show up in a line item.

We're going to clean this up.

I'm I'm explaining how we're going to get to 200.

We're have we have 119 in the 4 million, and then we're going to find we're going to reduce the executive branches by 81 to get to the 100%.

That's what I'll okay.

That's where I was going to.

Yep.

That's what I was going to do with that.

Um, and then is Kelph McClarken.

You can help me with this because you brought up last week about the earning early learning after school care the demonstration project.

Is that is this being taken care of through this line here?

This 200,000.

It is.

So what they have done, and Kevin helped me with this, which I think is remarkable, is that they're using the James A.

Henry site kind of as a pilot to extend.

So we how many sites?

I should know this, forgive me.

But of our own head start early learning sites, I think there's four together.

And this is the fourth one include this one.

Yes.

Okay, so that's great.

So basically, uh Chairman Henderson, we have three that are not gonna be a part of that.

So I kind of look at this as a start and a pilot, yeah, which I think is great because it's in an area where we still have a low to moderate income area that needs head start.

And so the fact that those that they're extending those hours past two o'clock.

Is that I actually think it's go it it goes to six o'clock.

I think that's the plan.

I was gonna ask about that because when Caritza was here, she said eight to five.

Yeah, I think it was five originally.

And but I think we all know that six is really what it needs to go to to actually be useful to people.

So I think we need some clarity on that and to understand is this gonna get us to six o'clock?

Because if not, are you just kind of throwing 200 grand away?

Is it really helping people who work?

So um the Department of Early Learning put forward to us kind of a good better best.

Like if we can have it all, this is what we want, and this is what we would get at this at this dollar amount based on just budget realities.

We we got to 200, which was a little bit more than kind of the the good, the the bottom tier.

Um, and so I do not think that it is a waste at all.

Um, and I think that one of the things that we want to do in the demonstration in this upcoming year is really track and understand the impact of that incremental hour as we consider going back to last week's line of questioning about costs per center costs, we're pulling that together, and okay, gonna have kind of like a a um facility by facility staffing model and then cost it all out.

We want to make sure that in this year we fully understand the impact that the money's gonna have, and I guess how much do we need that extra hour and what kind of effect we think that it would have.

Okay.

But to add that extra hours, which is basically her proposal, uh from two to two, three, four, five.

There's three hours, but to add it to six, it'll be four.

Would that really be extra money for that one hour?

Like, would it be that much of an impact just to say move it to six without having to move that dollar amount?

I'm sure.

It would be, yes.

I don't remember the specifics.

I can share the the three tiers that Chris has shared with us.

I don't have it handy.

Um, but I could it's it's kind of outlined in the good better best proposal of what the difference is, but there absolutely is an incremental cost because it's in for that one out to move it over the course of a year, right?

Yeah, second.

I said I can share it with you.

Okay, thank you.

I just be curious, like I mean if it's 25,000, 50,000, you know, like what would it be to add that 5 p.m.

to 6 p.m.

Because our partners are doing that, you know, Chabla Center is doing that, purpose point is doing that, these are stellar.

Although our head star program met and exceeded their benchmarks, which I'm really excited about.

Um I'm just curious what the cost analysis is just to add it for an hour, especially in the for the west side.

Anyway, we will get that to all of you.

Okay, okay.

Okay, one other question.

Uh since we're talking about James A.

Henry, um, so is it the boys and girls club that is gonna be at James A.

Henry?

They are going to be at James A.

Henry.

Are they gonna be running the James A.

Henry Community Center?

Um they just householding in it.

I think that they are providing in-kind services programmatically.

I don't think that they're running the center, but they're gonna be they're gonna have staff in like working out of that center.

That's my understanding.

So part of the community match piece for the the um the HUD grant that we're going after to help make James A.

Henry happened um and the West Side happen is outside organizations are coming in to provide programming, and we have assigned um value dollar value to all that, so they are part of that stack of programming at James A.

Henry.

Because that just seems to me like a really interesting way forward for community development to see how that goes because you know, here's a group of folks who know about this population of children who programming is what they do all day long, additional bodies in the building.

Um people who care about children.

I think that could be interesting to see how that plays out all over.

Yes, you know, if Richard just texted me and kicked that correcting me, that they're not at James A.

Right.

I was gonna I'm waiting to go.

So what happened was we close so we have a West Side Community Center.

Uh-huh.

And because we're building the new James A.

Henry site, we we're we're not going to be in possession of that building anymore.

And so the boys and girls club is moving into our old center.

Oh, and then our new center, we will still have a community.

So actually on that site, we'll have the boys and girls club at the old community center, and then we'll still have our community center at the new James A.

Henry site.

Okay.

So we actually will have two operating groups.

One which focuses more on girls and boys after school care, and then there's the community center, which is everybody, seniors, young adults.

So boys and girls club will move their whole operation to James A.

Henry, is that correct?

No, no, no, no, no, no, no.

There's a current center there.

I don't even think we ever owned in the first place.

Wasn't it owned by the housing authority?

Not sure.

I think the reason why they're able to move into that building, a part of whatever deal we have with the housing authority in partnership with James A.

Henry is that we gave that building to the housing authority and the housing authority is allowing the boys and girls club to come into the community center that we once operated.

But because we're getting a new site, so we're not really partnering with an organization to activate our community center.

We're we're just having two buildings going with active.

Okay, never mind.

Never mind what I said, but I do think it would be interesting to move some folks.

I do too, and I think that that the administration is interested in pursuing those types of partnerships.

Um while it is the housing authorities facility and their decision to do that, it was it certainly did not happen in asylum.

It was part of a conversation between these different organizations as we're trying to move the ecosystem forward.

So I do think that it's something that's definitely worth a thing on the go forward.

Okay, thanks.

Okay.

Uh so councilman, does that take care of our item number four early learning after structure?

Yeah, it does absolutely absolutely do.

Thank you.

All right.

Um, since we now have a quorum, could I get a motion on um Westweeks minutes?

Move to approve the minutes.

Okay.

All right, without objections, the minutes will stand as recorded.

Um council, since we seem to be moving fairly quickly through this a little quicker than I anticipated.

Um if there are no objections, uh, and I think the community land trust, you've got some board members maybe lined up to do that.

They did say that they were gonna come after lunch after lunch.

Okay.

So we have uh lunch schedule for 1145.

If if y'all don't mind, um item number seven, the economic development administration, we could go ahead and move that up now and discuss that if you if you would uh council, if you'll look in front of you, uh I've got something that I'm presenting that's the Chattanooga next generation um industry program, and and basically uh what this is um what I am proposing is that we put a million dollars into economic development uh to incentivize industries to come to Chattanooga to relocate to take advantage of the quantum computing that EPB has and the other thing that I also thought um UTC uh is doing an incredible uh program up there right now with their mobility test bed Martin Luther King on with autonomous vehicles.

Uh I thought maybe that we might even want to look at incentivizing some of the that industry uh maybe to come to Chattanooga to partner with UTC, but my thought was that with a million dollars and and I've talked to I've talked to folks at EPB, I've talked to folks at UTC, I've talked to Charles Wood at the chamber, they all feel like this is something that would really be beneficial to try to get Chattanooga on the leading edge, particularly uh, and I've spoken to some folks that that feel like maybe we just need to quant uh focus on the the quantum at this point in time, which I wouldn't have a problem with that either.

incentivizing some of the that industry uh maybe to come to Chattanooga to partner with UTC but my thought was is that with a million dollars and and I've talked to I talked to folks at EPB I've talked to folks at UTC I've talked to Charles Wood at the chamber they all feel like this is something that would really be beneficial to try to get Chattanooga on the leading edge particularly uh and I've spoke to some folks that that feel like maybe we just need to quant uh uh focus on the the quantum at this point in time which I wouldn't have a problem with that either but I think I think we have a really unique opportunity early to try to capture some of these companies and industries that are interested in this but they will need an incentive package to relocate to Chattanooga and partner with EPB with UTC with what we have to offer with in this quantum computing and try to turn what we have into economic development in the economic dollars.

So what I'm proposing is to place a million dollars in economic development uh fund just for that purpose um I talked to chief about it um I was kind of trying to find a million dollars you know in the budget where we maybe could draw from but chief I think you've I think you decided that you could find a million dollars to put towards this so we have the ability to to fund this through the economic development fund reserve which is currently um it's a healthy reserve and we could absorb it I do have at least one question for you is is your in your mind is this a one time we're gonna do it this year and then is the seed money for those organizations or do you envision this being an annual thing for some period of time I think maybe we'd judge that by the success that we have with it and and determine if we could draw a couple of big fish if the smaller fish would follow but but I certainly would I initial proposal would say let's let's fund a million Charles thinks that he can with this seed money maybe get another million okay um so that would uh double our investment and then um but that would my proposal for now would be for one year uh for one year to see if we could catch some big fish that would entice them to come relocate generate some interest around the quantum and then see if we can start building a network of others because I think so my idea would be to have a pitch event to where and we we put that out and and if we make the incentive attractive enough we build a database of of all kinds of companies that would be interested in coming to do that.

So even if those companies are not selected we've now built a database of companies that are out there that would be interested perhaps in relocating and then we could follow up with them at a later time I've let I I think I got counsel first and then councilman heel chairman Henderson I think this is great and councilman illiott is listening virtually and he agrees that this is great I just wanted to okay but say that we have competitive states like the state of Illinois that we were told by the EPB incoming president Janet that they are our competitors as far as research and development for quantum do you know and maybe this is something we need to research if they have a similar program like a recruit a business recruitment program around quantum that's happening in the state of Illinois or for I'm I'm not really sure at this point that they do.

I think all they I think at this point they've set aside money to start business recruitment to start that but I don't think they're as advanced as their development as we are so I think we're certainly positioned to take this money and go out there and start and compete with people that's trying to compete with us.

Okay gotcha thank you but we need to do it now California Hill then comfort hard so I want to make sure I understand uh the million dollars potentially being matched with another million in fundraising from the chamber which I like that a lot um that this is a potentially a catalytic investment um is that fund is this million dollars is that to be used for the incentive or is that to be used to uh draw interest and then we have our other pilot TIFF incentives no this would be this would be this would be the pot that we would incentivize okay we've kicked around a couple of different numbers um you know whether it's 25000 whether it's 5000 uh the 5000 seems to be a a better incentive to draw bigger fish okay okay um but if we're if we're getting matched with a million dollars then you know we're looking at potentially four okay four companies would you talk us through these qualification items so that we can all hear them in detail and and the thoughts around that um well obviously the quantum computing and networking uh obviously they would be uh partnering with uh EPB and and and UTC because they're both and

Um but if we're if we're getting matched with a million dollars, then you know we're looking at potentially four companies.

Would you talk us through these qualification items so that we can all hear them in detail and and the thoughts around that?

Um, obviously the quantum computing and networking uh obviously they would be uh partnering with uh EPB and and UTC because they're both and uh I tell you one avenue that I have not explored yet is uh Vanderbilt, the them coming down and the research that they're gonna be doing around quantum.

So what we would want is companies that are to the point that they're advanced enough that they're able to begin using quantum for their businesses uh and their models, and so that they would um they would they would be in that field and and so the package and the incentive would be uh not only a monetary incentive, but uh and this is we're trying to get a set up a meeting with uh with UTC and EPB to really flesh out I was hoping to have a little bit more information by now, but schedules and different things just have it worked out, but to try to flesh out a little bit more of an incentive besides just monetary, like you know, using the the quantum computer and the networking and and and developing that into a business model for for a company.

And then uh as far as the mobility innovation, um you know you UTC uh with their uh program is doing a lot with the autonomous vehicles uh in the field of communications, and so uh I think there's an opportunity there that if we want to have sort of a separate focus, my my thought was to kind of do them combined, but some of the people I've been talking to says no, just focus on on one on one network for now, and then and then if we want to come back and do the the autonomous vehicles, but they're oh UTC is doing some phenomenal work in in the field of autonomous vehicles, but more focus on mobility innovation than autonomous, is that what you're saying?

Well, it on the communication part of it.

Okay, uh the LIDAR and all that.

Okay, and then um of course the artificial and intelligence application and software, you know, cybersecurity, different things like that, which would follow along with the uh quantum computing.

Like I say, a lot of this, a lot of this is it is a 30,000 foot view because we really haven't, but I wanted to get it into this budget so that in this budget year we can start trying to uh recruit some of these businesses.

I mean we're still early and we can still, I mean, like we can be on the leading edge of this.

Will you talk us through these three bullet points below those topics?

The the structure contract, lease for office, that's the part I want to make sure we all hear and um the thoughts about how the the qualifications to receive.

Uh yeah, well, I mean I mean pretty much uh what they're written out here.

I mean, we we would have to have a contract with uh EPB and or UTC and or Vanderbilt Collab and or the Brickyard uh basically kind of outlining what the company that is coming is going to bring um how they would be involved in in developing this into an economy.

Okay.

Uh UTC, I mean the EPB would also kind of outline, and and this is where I was talking about it would be more than uh monetary value, it would be you know, assistance in developing a lot of this uh uh technology.

Okay, but but so EPB, UTC, Vanderbilt, all of these individually or as a group, and that's that's one of the things that we still are gonna have to kind of talk through to figure out what that actually looks like.

But one of the one of the things that they would uh need to agree to is uh establishing an office or a lab here in Chattanooga.

Like they have to have a physical footprint in Chattanooga, they have to hire some employees, uh, and we've got a minimum of five minimum of five.

Okay.

So what we're trying to do is entice them to set up camp here.

And and talking to Sharita they they did a program similar to this in Miami where they would require them to come uh and set up shop and then they grew their business from that location.

Okay.

And so that's that's the thought here is that they would come locate maybe start small and then just grow their business here once they're here.

Okay.

So we're kind of expecting some startup space folks you've also mentioned bigger fish.

Well what well when I say bigger fish there's obviously companies that's more advanced uh at a at a point there that they're ready to break out and others that are still kind of just at that start-up point.

Okay.

And that's a lot of what happens down at the brickyard you know these are startup companies that are that are working night and day trying to trying to get to the next level.

Okay.

And so these would be those when I say early not like just somebody's got an idea.

Right.

These are these are somebody that's that's ready to take it to the next level to deploy and and and begin making money at it.

Okay.

But they need some capital in order to do that.

So that's that's where the incentive program would come in into play.

Okay.

Any more any anything else well I I think I appreciate the thoughtfulness about about how we would structure and I know it's early days still um but in as much as quantum is moving quickly we need to be able to move quickly um it it's I know we've had some bumps in the road between the UTC Chattanooga conversation so hopefully Kevin do you feel like that's been smoothed out okay go ahead um well and and I guess you saw where EPB uh just gave a three and a half million dollar grant to right yeah yeah so maybe we've got some good leaders in place but I know that we were sometimes the slow mover in the UTC conversation you know we just had the the discussion about when different monies are allocated um would this money be put into a fund at the chamber for incentive or would it stay within the city I think we've got to put it in the IDB.

In the IDB I think is what Sharita and I talked about.

Okay all right so then not dissimilar from like we've put three million in for down payment assistance at HEB it says yeah yeah and so this would be an IDB so that if it takes six months to get it rolling that's cool because we've got that million set aside and then Charles might have another million set aside in his hopefully okay all right this is this is really interesting.

Thank you very much for bringing it to us council Harvey yeah I think this is a great idea I mean I think about um when EPV first introduced fiber optic internet and we became the first you know the first and the fastest internet in the world and how that really benefited our city um this is this is that you know two point I mean 2.0 essentially uh maybe even even bigger um with quantum um we're the first in the world to have it uh so some again something that we need to uh capitalize on and so I I think this is great um yeah I I think just my my input on um what the companies would be focused on I I think it would be quantum uh I think that's our biggest opportunity uh like I said especially being the first one and the only one in the world um to have that right now uh but maybe it's industries focused around you know a focus around um quantum and and so for example like uh jimmy white was talking about in the film and music industry um and how that is desired and and it helps their industry a lot um so that you know industries uh that could really benefit from quantum I think would be uh something to focus on uh question so so the million dollars would that would the city disperse that to these companies or is that something that would go to the chamber to be dispersed how does that so it go to the IDB okay and then the the IDB would disperse it but the the pitch could be run by the chamber in other words okay they're marketing we would advertise this pitch attract companies into Chattanooga let them give their pitch and then uh my thoughts would be that B B and UTC would be the ones to select who they want to work with.

And I'm sure there's gonna have to be there'll have to be some money raised for advertising, you know, to to go out and and and to reach these folks.

So uh what I want this million dollars to be is the actual incentive.

Sure.

100% of it going to the incentive.

Okay.

Okay.

So it's a partnership play.

And you guys would basically when you send the money to the IDB follow up with some instructions around like what the program needs to be, how it's gonna look, kind of form finalizing and formalizing kind of the rules.

Sure.

And then they would administer the incentive in partnership with and from with input from the administration, you guys, the chamber, everybody working together to kind of stand this thing up.

Yeah.

Okay.

Yeah, I think screen.

I want to uh Vice Chairman Elliott is listening virtually and he's sending me some comments.

Is he texting me too?

He is, you know.

I was like, I got your um he wanted to emphasize that uh as we're developing this quantum business development thing, that we remember the workforce pipeline uh to support quantum jobs.

So like if we're if we're bringing businesses in, then we need to have a conversation with Chattanooga State, the county schools, UTC all need to play a role in pumping out the right type of jobs or the right type of tech jobs to support the companies that we're trying to bring in.

So I don't know if we can allocate money for tech quantum tech.

I don't even know what type of jobs going to it's my understanding that the three and a half million dollars that EPB gave to UTC uh would be for that.

I mean, it's for professors, it's for developing that program.

So a lot of that uh workforce development could come from that from that so but but we are having intentional conversations about what the pipeline is for workforce development.

So we bring in a company absolutely and then no one from Chattanooga gets those jobs because they're all coming in from Seattle or you know, Tech Valley.

So but also really quickly and lastly, is that Vanderbilt has a more I mean this is not to you're all you know your home honor, but you know, Vanderbilt has more of a research capacity, and I think you know, when we talk about UTC, which is good and fine, you know, they Vanderbilt is a research institution, and so whatever we do, and I think you mentioned this earlier, and so councilman Elliott's point is that we need to make sure that we be more inclusive with that powerhouse.

Yeah, and I think you mentioned that in there, but yeah, I've got it, I've got you.

I just wanted to kind of teach partners um I've I have just not had a conversation with anybody from Vanderbilt at this point.

That's all did you have a follow-up?

Well, I did um to what councilman Clark was asking, so um as chair of economic development, I had a long talk with with that department um in preparation for budget, and one of the things that we talked about at length, Sharita walked me through.

Um they're calling it the one Chattanooga works plan, but this is uh and and I we haven't seen a full um document of that.

However, um what we discussed was the pivot on workforce development, and you'll remember from uh last week how a lot of stuff got called workforce development with ARPA dollars and they're really clearing out the the dust and getting very focused.

And something that Sharita said that is that as it relates to partnering with organizations, they're gonna be focused on training toward the jobs that are available or are coming online and funding collaboration toward jobs in our market, um, not training for things that people are not hiring for.

So I think what you're saying, I think is 100% where economic development workforce development is tracking.

So I think my impression would be that if they knew if this fund were to be created, they would be seeking out talking with those partners about okay, here's what we're gonna be looking for.

Um what type of jobs you there's a term for that?

Is it called micro something?

What setting?

Well, there is micro-credentialing.

Micro credentialing, yeah.

Um my um hypothesis would be that quantum is gonna require very highly trained people to begin with.

Um there might and that's just my guess having come from a tech company in the past, but um, but when you're working everybody up through the market toward that, I and as a mom of a kid that just graduated from college to think about the city recruiting quantum companies that then have a partnership with UTC, that then your your college students can learn directly.

train people to begin with um there might and that's just my guess having come from a tech company in the past but um but when you're working everybody up through the market toward that i and as a mom of a kid that just graduated from college to think about the city recruiting quantum companies that then have a partnership with UTC that then your your college students can learn directly I mean that is an amazing opportunity for students um and then yeah obviously the same way that Blue Cross Blue Shield has begun training computer programmers for example that go direct into the business so in my conversations with the folks at Brickyard like if you don't if you don't know AI like they're not even interested in talking to you so I mean every everything that I think that we do in our workforce development is going to have to have some kind of a uh reinforcement with it because I think that's what the future's gonna look like in hiring for these companies yeah I just want to say I looked up the EPB press release and it it was three and a half million uh to establish a UTC quantum center.

Yeah yeah just wanted to establish that's pretty cool so I think so I think all of this is going to start tying together yeah so that we can develop quickly yes just a little context I mean this is this is pretty um but this is not the only money flowing in quantum right for there are millions of dollars federal money that we got last year that were anticipating this year for us for EPB for UTC to go to different verticals um the state just unleashed another I think 30 million dollars that we'll be working with collaboration with them on how to deploy that against all the different issues uh that you're talking about uh and obviously the incentive speeds that we're talking about too we spend we work on this every week right and uh the the mayor leads the Tennessee quantum collaborative um Charles Brock is the executive director on that big guy um and we talk about the jobs all the time and what are those gonna look like and you can kind of take a crack at that by thinking about well what is a computer job right because that's what we're talking about.

Well you're talking about the guy who is the cable the person who programs the programs the person who mines the silicon it's going to run the game right some of them might look like the cable guy because we have to lay cable to do this right you know and and some of them may look like a a person with multiple PhDs who's designing the next coding language so that kids in third grade can start learning how to put quantum and everything in Canadian.

So we're really casting a wide net on that it's still as councilman Hill suggested it is still early days but we are moving very very quickly and getting a lot of clarity very quickly on that all right any other questions around that and bottom line from the administration's perspective is this obviously is an area that Mary Kelly has been hyper focused on and we think that this is uh you know an additive strategic play in the ecosystem we have the capacity to uh to support or happy to so uh I guess you'll get back with me and and we'll figure out how that gets placed into economic development or the for the deployment of the meeting okay great Mr.

Chairman all right uh council harvey when will we be we have to we have to vote for this or how does this so I well you know all of these incentives everything that we're talking about today um I I guess it would be nice if we could sort of get a um I just lost the word um final draft well not a final graph consensus thank you chief I think we need a consensus that at least the majority of us are in favor of the changes that's gonna be proposed and there's some more to be proposed um we certainly we certainly don't want to get the budget to a place that majority is is not in favor of it follow me yeah so I think I think at some point before the day's over we need some to reach some kind of consensus that yeah we're good with the changes that's being asked for with changes to the agencies that we're that we're suggesting um and I think chief this thing needs to be fully baked by June 1st is that correct we would love for it to be fully baked by June 1st but we'll say it we talk about the firm budget of the budget I thought you were just talking about this so just to kind of put maybe put a finer point on that so we're having conversations around the the proposed agencies will well those need to actually be enumerated in the budget ordinance.

So once we get to a spot where all of that seems like everybody's in favor of it or a critical mass, then those provisions will be in the actual ordinance for the uh for the hearing.

And so we want to get all the ideas onto the table that might impact the budget ordinance so that we can just do one final draft and it'll be it would be smooth selling.

That would be great to get to one final draft, not to have to do an amendment.

Yeah, I what I would like to see is a clean deal on the table without having to make amendments.

That'd be great.

Uh chairman.

Yes, I'm assuming that same deadline would apply for um the cap the new council position that's been proposed that would affect our council budget.

Well, I think as long as we have the dollars allocated.

Okay, I don't think it would have to have the actual position or description.

Is that what you're saying?

I think I think all we need is that allocation of dollars.

No, you would need the you would need the position and ordinance as well.

The ordinance lists all the positions.

So right now you guys have 12 positions in city council we have to add.

That's thinking position to the actual order.

We just had to move the money around.

Like to we have to authorize the actual head.

The language, like what we go to the position.

That's what the topic is.

That's right.

Y'all do y'all list positions in this ordinance option?

And we watch them like a hawk.

So it's only fair that we watch ours like a law.

I know Vice Chair Illiott's not here right now, but I know he's listening.

And I know that tracking that's his proposal, and then it's on our agenda this afternoon as a discussion item.

So I just wanted to make sure.

Yeah, we've got everything included as we move forward.

So as long as we have it by June 1st.

Okay.

Okay.

Um it's gonna be about another 45 minutes before lunch is here.

Councilman Harvey, do you want to go ahead and talk about your uh budget policy presentation?

Yeah, resolution.

Uh yeah, and then that'll that probably might take us up to the lunch time.

Then that way after lunch, we we will just be dealing with the community land trust.

Um yeah, after some consideration up, it needs some more time.

Um, I'm still working on some language.

Um, but I'll go ahead and talk about the premise.

Uh you know, last year uh the the center of our conversations was prioritizing our first responders and how we uh do a cost of living increase every year.

And so that that's the language I'm working on.

I've been and talked with our chief of staff and um some others on uh some language um and how that should read.

So um I'm still putting that together once I do the my this this policy um will not affect this year's budget um since fortunately we are all we're doing a colo this year.

Um thankfully um so it will not affect this year's budget, but um so that's what I'll be bringing to you all once I feel like it's uh it's ready um to be debated in the and we can always um hear it in uh budget and legit.

I mean uh budget finance committee sure once you get it right, yeah.

Yeah, I didn't want to rush it.

Um I thought it was a little rushed, so after um looking at it, I I want it to be the right thing.

So um so we'll hold off on today and I'll get with you on schedule on a committee or you know, something like that to bring it forth.

Well, go ahead, Mr.

Chair.

I mean, I I have lots of I have more than enough questions and answers related to the land trust if we want to let those board members just have their hour back and not we could just go ahead and do this.

Oh well, I I thought you maybe you wanted them to be here for the no, they asked if they should if they would they asked about coming, and I said, sure, if you want to come.

Oh, okay.

Well to I mean that's up to you.

We can we can go ahead and cover that now.

Well, so council, we uh are you so I think y'all prepared or sure okay.

So um, well, let's I'll take a little poll here.

So um I've got a question answer document that I'm gonna go that I'm ready to go over related to especially a couple of the main questions that were asked.

Um, but the uh members of the board of the Tennessee Valley Community Land Trust have um are planning to come after lunch.

Um if we have questions.

So what I would ask to you all is would you prefer to wait until they're here um and do that and have them so that they could answer questions, or would you like to go ahead?

Because we could potentially just reconvene at the time you wanted to reconvene.

We could break until 12 30.

I mean it could be helpful to have them around the table.

Just say around the table.

Okay.

Well, they would be thrilled to get to be around the table.

I don't uh okay.

All right, well, then yeah, let's just wait then.

Uh okay.

So we'll we'll break then until 12 30.

Uh is that what time they were planning on being here?

I sent them a picture after lunch, so I'll text till twelve thirty.

And then, okay.

Okay, thank you.

Um, so council, you asked some really terrific questions last week.

And I have um gotten the answers to those, so I wanted to spend some time going over them today.

We do have uh a couple of members of the founding board of the Tennessee Valley Community Lane Trust and an advisor to the community line trust here.

So since uh Chairman Davis and Chairman Henderson are okay with that, um, we'll invite them to come up to the table.

So we've got um Janice Gooden, Michael Gilliland, and Chris Thompson here today.

Okay, would you say so?

Michael and uh Michael and Janice are both on the founding board.

Oh, following with it right here.

Oh, absolutely and serve um on Caleb.

And I'll add that um Caleb actually Michael and Janice both were on the um economic development committee for Caleb years ago.

I'm not sure that's exactly what you called it, um, when I was originally running for city council, and they had done a great deal of research on community land trust and brought that to uh brought that idea to me, and I was immediately um fascinated and saw the way that it really could connect the dots.

Chris Thompson is the um CDO of Chattanooga Neighborhood Enterprise, um, where councilman Dotley is on the board, um, and they have been a advisor as part of this process.

Would that be a good way to describe CNE's rolling there?

Okay.

Um, okay, so just a reminder.

Um, the proposal that I have made is that within um a line item in the economic development budget that we allocate $2.25 million toward the existing down payment assistance program under the current program guidelines, so making no changes to those guidelines policies, um, and make a $750,000 one-time investment toward operating expenses for the Tennessee Valley Community Land Trust.

Um, there was another a third point in this, which was to reallocate $125,000 in funding to create an economic development incentive manager position.

But having spoken with Richard Bielan uh in economic development, they have the head count to be able to do that economic development incentive manager position along with the special housing programs manager position.

So for this council's purposes, they're going to have it either way, so no sense in making a change there.

Um so um I'd like to take that off of the table and only focus on the $750,000.

So would that $125 go back to the DPA program?

Uh no, it was never part of the DPA program.

It's a funded position within the economic development budget.

So we were touching two portions of the budget.

Okay.

Um so the first thing to level set with is just the bigger question of what is a community land trust.

Um essentially a community land trust separates the ownership of the land from the ownership of the building to create permanently affordable housing.

Um because the land is separated from the home, the home can sell for a significantly lower price.

Um so homeowners build equity, they enjoy all the benefits of ownership, um, but they do agree in advance when they purchase the home to resale restrictions that keep the home affordable for the next buyer, so preserving investment across generations.

So with that, there were two really big questions that that I three actually that I took from our conversation, though I've got more answers than just that.

But one was how in the world does this actually preserve subsidy um long term?

Because you know, right now we're putting $15,000 toward down payment assistance.

So what does that look like over the long term?

Um the second was how do people build wealth within a community land trust and specifically within the model that you all are developing for the Tennessee Valley Community Land Trust.

Um because those two things for at least for me and I think for some of my colleagues as public servants, that's what we're looking for is the ROI for the community and for um the the community dollars.

Um, and then also how communication will work, how education will work around how people understand um what the opportunities are but what the trade-offs are.

So um, how does the CLT model preserve subsidy?

So resale is capped by a formula.

Um so the um home can only sell at what the next income qualified buyer can afford, and this is all set up in the beginning of the transaction.

So the original subsidy, the gap between the market price and the affordable sales price stays embedded in the home rather than leaving with the seller.

So future buyer benefits from the same subsidy, which stretches one investment, one public investment in this case across multiple generations of homeowners.

So if you take a look at this graph, if we look at the initial sale for the first family, if the family can afford a home for $225,000, but they're trying to buy a house at a market price of $112, and y'all will remember that our area median home price is $340,000.

So all of like all the work we're doing with affordable housing in my mind is about incremental change.

So like we're making improvements to our building LDO policies, we're making improvements to the way that we handle our pilots and our TIFS, you know, all these things all go as tools in the toolkit.

But so you'll see that that home right now for the the affordability, the buyer would need a one-time subsidy of $87,000.

Now the way that down payments work, obviously, a down payment can help lower the cost of the home.

So that $15,000 is going to make a home more affordable.

But that gap is at $87,000.

Now, seven years on, that gap becomes $141, go to $228 14 years later, and 21 years later, if we were as a city council 21 years from now wanting to do something, we'd be looking for $350,000 in subsidy.

That is not sustainable in my mind over the long term.

So when we think about the way that inflation is going to grow, the way that home values, property values are going to increase, what we're looking for is a way to keep the subsidy growing along with the property.

So the CLT by having this model of separating the land from the home is able to serve folks who are between 50% and 100% area median income.

Now remember, our down payment assistance program is capped at 120% AMI, which is great because there's still a huge gap right now at 120% AMI.

So this increases the number of neighbors that could potentially become homeowners if a if a home is held within the land trust.

So what that means is I think the sweet spot probably for the CLT is going to be between $57,000 and $76,000 in salary a year.

And a family of four at 60% AMI, just to start putting some real numbers with it, can afford $150,000 home.

Go on the MLS and try to find $150,000 home that can comfortably and safely be a great home for a family of four, you're going to be hard-pressed.

Again, nine years ago, we weren't hard-pressed.

It's just the things have changed.

So big question then, how do homeowners build wealth?

So the buyer gets all of their equity back on their purchase.

We talked a lot about that.

So all of the money that the buyer puts toward the principal of the home and their initial down payment, they get that back out.

They also get 2% appreciation for each year that they live in their home.

So I think the appreciation cap is more where we where we see how the formula helps preserve affordability.

So there's two examples here that they that the CLT was able to provide to me.

Both of our examples for a family of three.

So I think what we what we've seen in other down payment assistance programs is we often have first-time home buyers who are a single mom with a couple kids.

So this is a good example in this way.

So if a woman who's qualified to purchase a home, family of three $52,000 a year, her initial purchase price within a CLT for a home would be they would uh figure the affordability at $154,000 home.

She would bring an estimated down payment of $1,315 to the home purchase.

She lived in it for seven years.

She would walk away with all of her equity, all of her initial estimated down payment.

So $37,500, which is a $28.5% or $20.5x return on investment on her down payment.

So multiply $13,15 by $28, and you get how much money she has made in seven years.

So there's another example at 80%.

But you see also that the sale price for that house has also increased in both scenarios.

And the home prices are on a sliding scale based on the median income of that home buyer.

So what you see is that the second time that house sells seven years later, you're at 177.9 because things have moved up.

She that home has appreciated.

But it's still going to be affordable in seven years to somebody at about 60% AMI.

So in terms of educating potential buyers, the um Tennessee Valley Community Land Trust will offer CLT homeowner 101 classes.

And those classes will explain the trade-offs of the model, how people will receive support as CLT homeowners.

That's something that I think is kind of cool.

I've seen how at the Atlanta land trust they create content around home maintenance, for example, and their classes that you can attend.

So you learn how to you know change the the air vents and fix the leaky pipe, that kind of thing.

But also it's followed by an eight-hour certified home buyer education program and then ongoing post-purchase education and stewardship.

Now as the land trust thinks about community engagement in the near and long term, um, I do get the impression that that Michael Janice Vice Chairman Elliott will be looking for you know feedback, and I think we as a city council in making a leadership commitment to this um organization would would certainly be voices that would be heard, but their thoughts at this point is that the land trust and Caleb will partner closely on community engagement through events, local media podcasts, neighborhood association meetings, resource fares, they'll offer monthly CLT homeowner 101 classes to explain the model, um, including the resale formula, um, how it preserves affordability because it's it's very fair.

This is a very different way of buying a house.

It makes a lot of sense that people would say, What in the world?

And and uh if the idea piques their curiosity, um would have every reason to want to learn more and really make sure they understand it.

Um there's also um a movie, a documentary called Holding Ground, which is a film that traces the community land trust movement all the way to the civil rights area with uh sharecroppers who were working to preserve ownership of their land and and control of their communities, so there'll be regular viewings of of that uh film as well.

Um so a couple other questions are there about how affordability stays in the home over time.

So I've already talked about the fact that appreciation is limited to 2% per year.

Um, so by limiting the sale price, and this is a choice that the homeowner makes when they purchase this home that they've said I want to pay that forward, and we're gonna limit the sale price over time so the next person, the next person, the next person can benefit.

Um there is some a goal for the pipeline.

Um, and I think you know, we can let some of our um board members talk about that.

I know that vice chair Elliott brought it up last week as well, but there's a thought around partnerships and awareness to build the pipeline for housing units.

Um, Chattanooga Neighborhood Enterprise has a couple of homes that they're gonna put into the CLT.

Um, they target a mix of 15 homes and lots in the first year.

Um, but also there are land bank lots.

We talked about that briefly.

There are lots that are not in the land bank that are are potentially there, but also something that I found was pretty exciting was that um the land trust and CNE have already had private developers and landowners inquire about conveying lots and parcels into into the land trust.

So you start to build energy toward this community investment.

Um, and then the land trust is um open to buyer-initiated opportunities where existing homeowners choose to sell through the land trust to make their home permanently affordable, so providing an additional means of inventory.

So that's a lot for me with all those QA.

Um, but that way nobody had to read it all.

I could read it to you.

Um any questions?

Um thank you so much.

Council Mihu for uh the thorough explanation and all of the information regarding it.

I do have question about the char is sales.

So these numbers on the chart are only for the house, not for the land.

Correct.

Correct.

Okay.

All right, and then this 2% appreciation is the cap the leash.

Okay, and then uh I think a part of the ask for this one was um that they would get matching funds.

Yes, that is that is my proposal that they would that to draw down this full amount in a single fiscal year that the community land trust would need to be able to show that they had 1.5 million dollars in subsidy planned.

Okay.

And do they already have had they already raised any money as a I believe that they are raising money and have a million dollars?

So they would need to raise an additional five.

Okay.

So they really they pretty much on track with what they are need for the matching.

Yes.

And then, and as I kind of well stated before, I don't, I'm not necessarily against a land trust.

Um, but given again the people that are within that category, which typically are gonna be into moderate to low income areas, a shared equity model or capping the resale value at 2% per year is a trade-off for their equity can be hard to grab.

Um, education is gonna be very important because you know, we come from a tradition of especially again, those the communities like the neighborhoods you mentioned in this one were you know, uh like the Tubman site or Southern Street, or when you look at I would think my neighborhood, like O's Avenue, places like that, you know, those are I I call I've called it before poverty pockets.

So when you looking at areas with low income and a lot of time high density, and then this seems more, and I just say the way my people said it seems more predatory.

Well, they already can't afford it.

Well, you can well, you can afford it, but you got to share your equity with me.

Whereas, you know, in areas that were already redlined.

So when you think about the history of housing and the history of how there's impacted people in these some of these core neighborhoods, it becomes what is this?

You know, what does it and I think that's why I say education?

Like, what is the and I see the classes and uh all these things, but um like before this even came, this was something that in a neighborhood meeting it came up about I'll say O's Avenue particularly, um, as we were trying to if this is in a land trust, it's a land bank, and once we got into it, they were just not a fan of it.

Uh, because the thought of we already down and out, okay, and then we want to buy a house, okay.

Cool, let me try to go through whatever processes to get the house.

And then when I get the house and I want to sell it, now I can't sell it for whatever I want to sell it for, but I I can only sell the house, and then I'm only getting a small percentage of that, and that's a trade-off of that.

So that becomes the issue, and I am a board member of CNES as disclosures.

Well, Chris is not Chris knows, but also Chris knows this.

C and E being attached to this is also a hard hit too for our communities again because of some of the history of CNE.

Not opposed to CNE, wouldn't have got on the board if I was supposed to see any, but also you know, there's some historical context to this that will pose itself as a problem in the communities you want to develop these things in.

So I would say I won't say tread lightly, but I would say, you know, make sure that there's education around this, make sure there's buy-in from the community, and they know if you're buying this lot in this community, let's talk about what this is.

Yeah, because that's gonna be without that buy-in there, without that, you you're gonna have land trusts with that target audience that you're never gonna get.

So that's just kind of my my take on it.

It just seemed really Would you like would you like send the board members to talk to the fear of it being predatory?

Yes, yes, that'd be because I think you can't.

I think that's important.

Yes.

Um do y'all have anything to add about the like is it predatory or seems predatory thinking?

I think sure.

Well, I think let me counsel that uh Ellie, if you don't mind, I would like to hear from Michael or somebody on the board because they've been dealing with it, not the boy.

Thank you so much.

Uh, but I know we've worked together in the past for a while on different things.

We've talked about this before.

So I would love to hear your take.

I know you've been out in our neighborhoods, you know what it's like, you know, those conversations.

So it'll be good to just hear your your take on it or Miss Janice, because I know we've been around and we know you've heard it, you know what I mean.

So I would love to hear your take.

Thank you, Vice Chair.

And I understand where the concern comes from.

I will say that uh we already have strong community support, and that community support is gonna build as we communicate more.

But the community land trust at its heart is about balancing the needs both of homeowners and of our community at large.

And I think that that's something that working class shut niggas across our city already understand.

They know that there needs to be investment in homes that people can afford that our communities are being priced out from under us.

And I think that there's awareness too that it's only getting worse, that the divide between what the market is going to be setting the price of a home versus what our uh our nurses or teachers or firefighters are able to afford is only going to grow in time.

So the real question is about how do you do that effectively rather than an investment to each individual homeowner over the years that's going to have diminishing returns.

I mean, the city has invested more in affordable housing in the past two terms than has ever uh been invested by city dollars towards affordable housing.

But it we're not able to keep up with the market.

What the community land trust does is provide an anchor of stability in communities.

It provides the surest guarantee against the forces of gentrification for communities, not just for initial homeowners, but that every homeowner in the future is going to be able to take advantage of that initial subsidy.

That support is going to transfer to homeowners and homeowners.

So we're not just talking about the stability of a homeowner, we're talking about the stability of a community, and we get both out of that because the community the homeowner is able to take out the full equity of their mortgage.

If they're the if they want to stay in the home and transfer it to an heir for a hundred years, then they can own that home forever.

But if not, and typically around the country, community land trust homes, the average is around seven to ten years of transfer.

So what people are doing is they're using this opportunity as a stepping stone to build equity for themselves.

And at whatever point they choose to or they need to, they can then use that opportunity to go out and uh purchase a home on the private market.

But what this model allows is that while they're able to do that, that home is still going to be guaranteed affordable long term.

The homes that CNE has built that are already set to be put into a land trust, a home in Highland Park that we were at last week.

That home, when it's put in the land trust, 50 years from now, it's still going to be affordable for a family.

And that's what we're talking about is being able to provide that long-term island of support for working class Chattanoogans.

So the homeowner does get the support.

It also provides a way to make sure that our our neighborhoods remain economically diverse over the long term.

Okay.

That's that's good.

So thank you so much.

I appreciate that so much.

And then I'm gonna go to Chris because I know Chris I would have an answer for me.

Let me jump in.

Yes, Miss Jean.

Oh, okay.

I do too, actually, but you go ahead, Miss Jean.

Okay.

So my connection with community land trusts, I had no idea that this existed until I was at a neighborhood university.

Um class that was offered by a city, maybe 2018.

So I thought it was an interesting concept.

But then later, when I connected with Caleb, I realized that there was some education, and I had no idea it was tied to the civil rights movement.

That was interesting to me.

So my desire was to learn more, and I think as people begin to get educated and understand what it is, and that the fact that each land trust is built based on where you are.

So there's a lot of material education, opportunities, and I think when people understand, they can make their own decision.

That's true.

Some may be for it, some may not, but it's important to be a dual path, like Councilman Henderson said.

So for Chris, and I promise I'll be finished, Mr.

Chairman.

Okay.

Um, and I'm I mentioned the role of CNE.

I mean, you've had these discussions about kind of how CNE in the past has treated our communities.

Could you speak to the role of C and E, speak to the role of where y'all are where we are now and kind of what that looks like?

CD more broadly.

CD more broadly and related to this, but you'll you can be brief in the broadly part.

Yeah, uh so thank you uh for the opportunity.

Just preferred affordability partner is what we look at at CNE.

I'm aware of some of that history, uh, and we need to do some things to address that to know we're on a better and more positive path moving forward.

So we really are talking about how we better uh partner with community members, nonprofit organizations, the faith based the faith community, uh, the school district talking about teacher housing.

How can we support efforts driven by others and owned by others so that it doesn't come that we're the ones owning things?

We want to support the efforts of others in their neighborhoods in their communities as they think about their goal of providing affordable housing.

Uh so that's a key for us uh in thinking that way, being more and better engaged in community, providing more the CLT provides neighborhood ownership through a tripartite board, if you will.

The CLT provides neighborhood ownership through a tripartite board, if you will.

The community, the residents own the CLT.

They have decision making authority in that, which looks different than C and E.

We have a nonprofit board, uh, but to engage the residents as up to a third of that board is meaningful.

So, what happens with the CLT over time will be determined by residents of the community.

C and E thinks that's critically important to supporting neighborhood development and transformation and supporting nonprofit organizations throughout the community, faith-based communities, schools, and other nonprofit organizations.

So we're really headed that way and thinking that way.

Importantly, the CLT is not owned by C and E.

It is a separate, independent, nonprofit organization.

C and E is supportive of this as we are with any other partner, school district, church organization.

We're working with various churches as well to provide.

We know how to build houses.

So we're gonna build houses through C and E.

We have two right now that are ready to go into the community land trust a three-bed, two-bath modular, and a two-bed, two and a half bath uh stick build uh in the Highland Park area.

So we know and we have other lots.

We are going to be donating other lots into it with homes on it for the CLT.

You talk about how we're gonna get to the inventory, the number we're seeking.

C and E is committed to that, so we're gonna build and then we're gonna donate that or convey that into the community land trust.

Okay.

Uh so yeah.

Thanks so much, Miss.

Thank you, Mr.

Chair.

Thank you so much, Councilman.

Uh Councilman Hart.

Yeah, I you know, just a few statements before I ask your question.

I think this is a good opportunity for our working class.

I think you hit the nail on the head.

Is this uh what I think of when I think of a hand up uh to help someone in their situation?

Um you know where Chattanooga Police Department officers are living?

Not downtown.

Birchwood, South Pittsburgh, Sail Creek.

A first year cadet can't afford to live in downtown Chattanooga.

Heck, I I can't afford to live in downtown Chattanooga.

So I think this is a good opportunity to help folks like that get their first home.

I mean, I think that's the important thing is this is so this is really designed to help folks get their first home, and then they uh once they have salary increases and that kind of thing, and they're in a better situation, then they can go on and buy a home where they can build more equity in it.

But that's the trade-off, right?

Is this a more affordable option?

Um, and then if you you know, I mean, you don't have to do this program.

I think that that's the other thing is you don't like it, you don't have to buy a home uh with the land trust.

So I think that's just a few of my thoughts.

But um, I guess this is I'd like to hear from the board members.

Should you get the 750 dollars?

750,000, sorry.

Well, what this discussion.

What do you see?

How do how do you see yourself using those funds toward your operating expenses?

Well, uh, so part of that is part of C and E being involved in that is to reduce or help defray cost.

A lot of CLTs have a lot of startup with operating costs.

By virtue of C and E being a part and helping to administer that, it actually reduces that cost uh to the CLT, providing for more opportunity to be successful over the next three to five years to build up to 200 homes.

Uh but with that, there we're looking at various staff right now or today, we'll be interviewing some folks and in the later this week for CLT director uh to come in and run the program, if you will, uh, on behalf of the CLT board.

Uh some other critical areas.

We talk a lot about stewardship.

Importantly, very critical aspect of this is making sure people are comfortable knowing what that is to be a homeowner.

We talk about lending and some time of predation, predatory lending that goes after.

We're providing education, we're providing support, we're working with, we're a partner with the homeowner to find identified lending and financial services for them.

Uh back in the crisis of 2008, uh, when we had a ton of foreclosures, the most successful avoidance mechanism uh for avoiding foreclosure was to be a homeowner in a CLT with less than one percent of those homeowners suffering uh from potential foreclosure.

That's huge.

That is because of relationships with banks and working and educating homeowners to ensure that they stay in a home when others were not able to do that.

So you talk about stability in that.

Uh these operating funds would support stewardship and providing a director of stewardship for the organization, a CLT director to be working with partners to consider conveyance of land appropriately.

The only way we get to affordable housing, I say this all the time, is no cost, low-cost land, and low-cost money.

If we don't check both boxes, we cannot provide affordable housing.

And your support is as a city with C and E and thinking about the down payment assistance program, great.

Great.

It's an all-hands on deck here.

And so this provides that opportunity, and through that operating support, we can take the money that has already been dedicated, and others who are interested in committing funds to us towards that necessary subsidy to reduce that cost ultimately at that home for a family.

I guess my main concern, and I overall I support this.

Who have gone overboard on salaries and padded salaries and you know, for we didn't really see the return on investment.

Um that's just my main concern is making sure that you know, should you get this under $50,000 that those funds are used appropriately, and like I said, you're not padding salaries and you know, adding unneeded positions and those absolutely.

So we have just those stewardship absolute necessary, CLT director, absolutely necessary.

Uh and the other thing about this is those unnamed organizations will not be these residents will be helping to determine it'll be a community endeavor to determine making sure we're responsible with the dollars uh in the investment being made, and I think that's a critical piece of this.

Uh the entire community can be a member of the CLT that's built into the system, and they can have representatives on that board.

Uh we have other representatives who already indicated to be a part of that.

So that will help, I think, in terms of concern about where we're headed and how we're pricing things from an operating standpoint to know that you have that uh you have that oversight that's occurring, and that's community oversight.

That's not independent nonprofit board, that is a community oversight that includes residents and other community members.

Yeah, sure.

Uh the other thing I'll mention real quick is just number of homes.

Uh you're expecting your dollar to be invested wisely to create homes.

We're looking at a very aggressive, if we hit this aggressive, we're the largest CLT in the state of Tennessee.

Uh so you're expecting production, we expect production for that investment.

There will be a return on investment to the tune of roughly 200 homes plus in a CLT.

And for a CLT, that's extremely aggressive.

Uh we got to be bold, we got to go big and we have to do better by our residents.

The CLT affords us that opportunity, and we think that'll be a very wise investment.

You're gonna get to see every year those numbers.

You're gonna know here's how many homes we have, and here's the plan to get more homes online for families.

Okay.

Thank you.

Um thank you, Mr.

Chair.

Um Michael is my neighbor, by the way.

Uh love, Michael.

Um, I'm not sold on it.

I made that plain and clear last week.

Um, I would say that I'm totally against it, but I'm not sold on it.

And the reason again, I'm not sold on it, is that once again you have individuals telling you what you need.

When the people have already spoken and told you what they want and they need themselves.

You want to place something before people.

I mean, why can't we ever have the total package?

Why do we have to have you can have this, but you can't have that.

Why can't you have both of them?

Why can't they have not have the land have the land as well as the building itself?

Um it's a plantation mentality for me.

This is what I'm seeing and what I'm hearing with this.

Uh, you want to decide that you want to make a neighborhood of this land bank, and you want to have a site set.

And I see in here in your presentation, Councilwoman Heel, potential of the Harriet Tubman site.

That was provided by the CLT.

Okay, so that is within the Great District 8.

And this would never ever work in the Harriet Tubman site because the people have already spoken as to what they want on that site.

This is definitely not it.

And I don't have to pick it back with Councilwoman Dotley on C and E as far as us.

The issue is there, and it has been there and rightfully so because they were done wrong and have already always been done wrong.

And councilman Harvey said a hands up.

That's what you think is a hands up.

But talk to our people and see what they consider a hands up.

Okay.

So not being able to own the land as well as the house.

If you can find money to do that, then you can find money to have it affordable for people to have the land as well as the house.

And not always telling us we have to have a piece of something.

We can never have it all.

You have to accept this.

If you want to do this, then this is what we have to offer you.

You either take this or you leave it.

And I don't know for my constituents in conversation we have had, they are not a fan of it.

Michael Jones any of that, the why the wife, how it works or uh any of those concerns.

Well, I think for for me, I'll speak personally.

Uh you know, I I feel like I've been engaged in uh housing for all people in Chattanooga for a long time in the city, and I don't ever plan on leaving it.

I plan to die in the home that my wife and I currently live in an orchard dog.

Uh I and over this time, I've seen increasingly strong barriers to that being realistic for working class families in Chattanooga because it's not just a question of the amount of subsidy, it's a question of the amount of investment going towards the type of housing that people can actually afford, largely cut at the federal level, making that not available.

And at the same time, we're facing market pressures that we have literally never seen before.

And when I say market pressures, I'm not just meaning people with higher salaries coming from out of town.

I'm also talking about investment portfolios, uh major real estate speculators that have taken an eye to Chattanooga and begun uh purchasing huge amounts of property that regular families can't compete with.

That's a new pressure.

And if we can't provide a shield or a barrier to that, we could invest what little resources we have in another model in direct support where homeowners are taking full advantage of equity.

But to do that, you're going to have to create an increasing amount of subsidy every year to maintain it.

Uh what the community land trust, the reason why I've been advocating for this model for 10 years, is that this provides a shield that we can all of a sudden begin to take real estate and protect it for those families long term.

Not every family, not a whole neighborhood.

But if you're talking about South Chattanooga as a great example with the development of the stadium and the increased speculation that comes about from in real estate, being able to have a land trust allows for protected real estate that's going to make sure that that home those homes are going to be working class homes from now into perpetuity.

Right now, the city doesn't have that option.

We don't have a tool to be able to do that effectively.

So I want to see what orchard knob has been working class.

What was originally teacher uh uh teacher focused neighborhood.

Now that that's the market has changed.

They the people that are able to purchase on this current competitive market has totally changed.

I want to make sure that teachers are still able to afford to live in my neighborhood uh when I'm old, and I don't see another option to be able to do that sustainably unless we're able to uh just start investing in community resources rather than individual resources.

That's what I would say.

Let me uh let's make conversation along.

Did you have any follow-ups to that?

Um my only follow-up would be uh Mr.

Chair would be if this is such a great thing, then let's continue to have a conversation that will come up that would be a great thing in order for it to be a toller packet.

You don't have to always jump on the first bandwagon.

I I don't see that.

I don't see once again I will say it and I will say it until I have my last breath.

So sick and tired of telling us what we have to have and not helping to figure out what we can give you as to what you want.

Once again, it's piling us up on a plot or a piece of land somewhere and say this is what you have.

You do this with it or you don't.

It's just not once again, it's that plantation mentality.

This this is this is what y'all gonna get.

Now you take that and go on with it.

Wrong with it now, because that's it.

If you don't take this, you ain't gonna get nothing.

Then you need to figure out we need to figure out not you, we need to figure out another way that we can be supported.

And it's always brought over into the underprivileged neighborhood.

Who in this at this table that is not living in an underprivileged neighborhood that would want that land bank that you would take it into your neighborhood?

Um I'm just let's just be straight up here.

Okay, okay.

Do you have a place to place it there?

So one then it would be affordable.

So one of the things that was noted in the QA was that they were going to allow buyer-initiated opportunities with existing homeowners who choose to sell through the CLT to make their home permanently affordable.

So I know that there's conversation around multiple lots in um different areas of the community, not just in district eight, and I imagine if you said you don't want a land trust in district eight, you don't.

I mean, that that would be something that would uh you know you could say, uh, but but for me, do is there a large plot of land?

Unfortunately, there's not.

I'm in full support of a different multifamily housing project in my district, but that's exactly why for me I feel like we needed land trusts because they're fewer and fewer.

I mean, I've knocked on doors of homes that had folks who were working on the um working on the curtains at the Tibley that are part of that of the union for people who um work in stagecraft, and now that home has been torn down, and a 5,000 square foot home is there.

So they they I am seeing my neighborhoods where I we are rapidly in district two losing housing that has traditionally been affordable.

So for me, when you ask that question a hundred percent, um I would love that.

And and I think when we think about the we and who is the we or you of um home ownership, it's anyone and everyone who's buying their first home, whether they're a 21-year-old or a 52-year-old.

Um, and in my mind, finding a way to preserve the value of the subsidy that we have, which right now we have $15,000, which goes a little way, doesn't go a super long way, preserve the value of that.

So the concepts that we have that we want to invest in, housing affordability and attainability for people who live in Chattanooga, along with a wealth generation component from where I sit and I acknowledge it's not where you set, but for me that is a win.

Okay.

So let me let me say this, uh, Council Woman Hill.

Um, in your paper, you put potential of Harriet Tubman.

If there was other potential sites in this city, why were they not listed?

Why was this particular site listed and it is in an underserved neighborhood and in the Great District 8?

If you had potential, if C and D had potential of the places, explain to me why Harriet Tubman site was singled out in this particular thing.

Once again, that coming in backdoing, I think saying this is what let me let me finish, please.

I was respectful to you, and I would appreciate that you do the same to me.

Okay, so if that was other potential location, explain to me why they are not listed.

I I'm having to the one reason that that is even referenced is because there was an RFP for that land.

I'm just sharing, and we just shared an example of land that was put out for accepting proposals about what to do with it.

I use that merely as an example, and we use that merely as a devil.

There is land, whether it's this location or a variety of other locations that we could better use and provide better access to to provide housing.

It may not be CNE's putting in 15 lots, so we're looking all over town to be able to do that, and we're getting approached in other uh places.

That was merely by way of an example.

There's land that has been sitting there for some amount of time.

There are other locations, but that had been publicly RFP'd, so that's the only reason notice that it had even been referenced.

Okay, but the RFP on there did it would not, the land trust bank does not does not uh fulfill the RFP for this tub site, should never even been put on the table.

There's nothing in that RFP for Tubman site that would say the land bank should be a potential for that.

Nothing.

Okay.

Been working on it for years.

Nothing.

Okay.

Thank you, Mr.

Chair.

Good.

Councilman Philly.

I'm all right.

You good?

You don't okay.

Council Harvey, you got a follow-up?

Yeah, I mean, to Councilwoman Knowles point.

Would your model work with a land and a home?

Or why not?

As a board member of the just context and general.

Well, okay.

You got so Megan and Nicole and the rest of their team have done a very good job of creating other options to create affordable housing.

And one of theirs, Megan, please excuse me if I describe it incorrectly.

And we've had one project with this so far in Councilman Dolly's district, and I think they're looking at another one in mind where we have city own land, we take it to the land bank, they clean it up.

And it's a pilot program, if I'm not mistaken, where they will give the land to developers to develop, but they have to sell it at a certain cap.

I think it's 230,000, I believe.

So they can't sell it any more than 230,000.

It has to stay affordable.

15 years.

For 15 years.

But that's 15 years of affordability.

But you also got to be mindful, it's expensive to build things to.

And so you you just don't have people just, especially in our development market, just jumping to build these houses because the margins are going to be small, but it does ensure affordability.

It's an extra tool we could use to what Councilman Noah was mentioning, and it's out there and available.

We just don't have a whole bunch of folks that's jumping at it.

But for this model, does do the numbers work to own both the land and the home?

The why?

Well, if you look at this graph and you see the difference in the price you want to sell it for and the price that it's valued at, the land itself is a significant portion of the subsidy as time goes on.

So $15,000 to use that as our current example, does not begin to close it 87,000 gap.

The way you start to close that is you take 40,000 off the price, 40 to 60 for the value of the lot itself.

So if that lot is worth 40,000 now and it's worth 80, then next seven years and so on and so on.

So that's why that works.

Like money doesn't fall from the sky, right?

Like the things cost money, and so this is a way of separating that land.

So you have the cost, the value of the land from the value of the home.

If it did work, people would do it.

So two methods.

One, we can just deed restrict it.

You talk about some of the pilot, we can just deed restrict and say for 15 years, you can only say that you can sell it at a certain price.

Or we can take the land piece of that, provide additional support to that homeowner through stewardship and working with banks as I indicated.

We don't foreclose often we ensure the quality of the homes by virtue of our ground lease, it's out there for 99 years.

So we go well beyond the 15 to do what a deed restriction can do.

Deed restrictions have private enforcement.

You have a community of neighbors and residents that are helping to support the community land trust.

But either way, we've got to find some restriction to cap it to make sure it's generationally affordable.

We do that through the land and the subsidy by taking that piece out, but we don't take it out, we give it to the community through the community land trust that actually operates that.

The other approach is to deed restrict, but either way, that gets back to low-cost land.

We've got to do something with the land.

We cannot make that apart.

You see the subsidies that we talked about here.

We got to make up in year seven, 141,000.

That'll break the bank.

There's no way that we can provide affordable housing at an inexpensive rate to make it safe quality housing, knowing that those are the numbers uh that somebody's gonna come back to you in a few years and ask for at that rate.

It's just not workable.

We talk about making the numbers work to do the best we can given the current circumstance and the way the CLT does that, and by the way, they've been around.

I've seen a lot of shiny objects in real estate development, lots of them.

This is not a shiny object.

This has been around since the 70s.

There are hundreds of CLTs around the United States that are tremendously successful at keeping things affordable while building equity and wealth for families.

So uh we we could look at a lot of other things.

I hear them every day.

This is not one of those new shiny objects, so let's try this.

It's proven to build wealth for families, but it has also proven to keep uh homes generationally affordable beyond most eat restrictions of 15-20 years.

So that's and the other thing is it's all hands-on deck.

This is not either or uh territory.

We need down payment assistance, and fortunate the city is looking to do that.

Uh, and we're working with private partners on more DPA.

So we need DPA, but we also need other ways to be able to build affordably and preserve it.

CNE gets picked on for the south side.

I know that I knew, been around here for a year.

What you did in the south side.

We had really affordable homes built in the south side.

Who can afford them now?

The CLT, if we would have had that tool then when we built those, those would have been much more affordable to folks today.

And so we see that we're trying to learn from our history about how do we do better by neighborhoods.

We build up neighborhoods with brand new homes, but how do we ensure affordability?

Boy, the CLT is a method that is tried and true, has worked in hundreds of communities for over 50 years.

Uh and so that's just another tool to put in together with DPA, together with deed restricted land through land bank.

Uh, we need it all.

Uh, and so hopefully this is something else we can provide as an option to working families.

You talk about the folks you talked about, working families here in Chattanooga, Tennessee.

So, what I'm hearing you say is that wait, no, that's right.

I'm sorry, you got to so what I'm hearing you you say is you you would love to offer both uh land and home ownership, the whole total package.

You can't because the math doesn't work.

Yeah, that's yeah, it just that's essentially it.

And to preserve that, we have to find some way to restrict over time to keep it generationally affordable, and there are really two ways to do that.

We can deed restrict it, or we can do this.

With this, we add on stewardship and we add on other supports in the community, and we build an ownership uh organization and ownership structure that the residents actually own it, and they get to make decisions for how this thing looks 20 years from now.

Sure.

So just one clarity on that.

Um so there's a lot in a neighborhood, for example, that the CLT wants to buy or landowner wants to sell to the CLT, however, it might work.

Um that would have an effect on the existing homes and property in that neighborhood, I'm assuming because it's selling for a different price down the road.

So what say so do those neighbors have in that in that situation in that transaction?

There are uh there are rules against how those homes cannot be uh existing homes cannot be devalued from an appraisal standpoint because the CLT is in the neighborhood, they use different methods for praising and and assessing value.

We've met with the assessor's office here to talk about that.

They understand it, they get it.

So you want to do two things.

You want to protect the value of the homes of the existing neighborhood and say, Well, wait a minute, mine is all artificially been uh uh decreased as a result of this.

They they can't they separate those they use the outline of it?

They do there.

There's a it's a different category that doesn't affect existing home, but also benefits that homeowner in that they're looking at the value based on what they paid in and saying this is how we assess that for that purpose.

Uh, and then they're paying for the improvement on top.

The land is separately.

Another thing that you would aim to do.

So not only is the house.

If you've got three houses in a row, they're all um 400,000 homes.

This one is in the land trust, so this person actually paid 185 for it.

Um they're all still valued at 400,000.

It's just an agreement on how much this one will eventually be sold for, but also something that they've been working on in Atlanta with their land trust is working with the tax assessor to help this person tax burden stay at that 185 valuation because that's what they're able to actually get out of that home.

So that also is going to help with long-term wealth generation because as your home increases, if you buy a home in a traditional um down payment assistance program, that home goes up and your tax rate goes up as well.

And and the assessors here, we've sort of been they'd handle it the same way.

Wonderful.

So those are kind of relationships that have to come over time.

Thank you.

Uh I do have a question.

Um let's not forget this whole conversation revolves around the reallocation of the $750,000.

Uh I think what I heard you say about the $750,000.

This allows you to put that towards administrative cost so that you can actually go out and raise money for the physical land.

Absolutely.

I I'm assuming people will are more likely to give money toward a tangible asset such as land as opposed to contributing to administrative cost.

Absolutely.

So this will this $750,000 frees up and gives you the ability to fundraise for those hard assets, correct?

Correct.

The next thing, why is it set at 2%?

And my question is this, and and maybe if somebody could show me this on a chart, I could understand it a little bit better.

If I'm paying 5% for a loan, and I can only get 2% out of it, am I not losing 3% a year?

So first of all, how it was set was a board determination with lots of folks in the room to determine the rate.

There are several ways to show what that increase can be.

We've already got equity in it.

We've already, that home that we're building, or that somebody else is building is worth 300,000.

Uh their loan against the total equity of that home is gonna be much, much less than that.

So they're getting an increase above that payment, but that is not the full value because it's a $300,000.

So what are they what are they getting 2% on the value of the home, or are they getting 2% on what they've did?

They have application of what though their original mortgage.

So the value set at the original price that they bought that home, that they're getting an appreciation, they're getting a hundred percent of the calculated appreciation that has been determined under the ground lease at two percent a year.

Okay, help me understand there's you're probably gonna pay five percent on that.

On their mortgage, okay.

So if I'm paying five percent on that amount, and I'm only getting two percent of increase to value off of that same amount.

Am I not losing?

Am I not like I said, if I could see this on a chart, maybe I can understand it better.

In my mind, I'm losing three percent a year.

Uh, and I would say that we're happy and the reason I'm asking that is why would the rate instead of two percent not be something different?

I can set on the 30-year or the 10-year bond market.

So the goal here is that we want to be able to share a certain amount of appreciation, but also make sure that the next homeowner or also purchase at the 60% AMI level.

So I'm yeah, I mean, I I I get the affordability long range, but I'm I'm just so there are a number of other cost savings that are included with the initial subsidy that's coming from the land trust, including the uh lack of a need to uh engage in uh private mortgage insurance.

Is it because of the initial initial investment of the subsidy?

It's not going to be something that CLT loanowners have to invest in.

So we are making sure that the purchase, including all fees, including the interest rate, the payment is something that homeowners are going to be able to afford month by month.

Now, the difference here is the option compared to if they are unable to engage in the housing market, they're still renting over the time period.

The costs for rental increases are going to be astronomical.

The the comparison here is the equity that a homeowner is able to build by using this model and the savings that are going to be built from both their initial investment uh and the two percent is an option for equity building that currently is unavailable.

Well, I I guess my question is if you if you base that appreciation rate on like a 10-year or 30-year bond market.

Does that you feel like that makes it unaffordable seven years, ten years down the road because you've increased the value two percent?

Well, over two percent, yeah.

We would have the worry would be that it would become less affordable over time.

It's the initial purchase price that we're worried about.

We understand the rate going into that, but we have to set an initial purchase price and consider what that would be for the next family affordably seven years down the road, whatever the interest rate they're paying into that.

We've got some return, but the only way we can look at it is set a price base, and there's several ways to do it.

One way to do it is this fixed.

Another way CLTs do it is by setting it against some index.

Yeah, uh, the third way to do it is uh percentage of total market appreciation in whatever the market you're in or submarket.

There are different manners of doing it.

The one that's proven most effective historically based on our consultants sharing with us grounded solutions that does this everywhere is a fixed increase per year because there is return over that initial down payment to this this homeowner.

We do compare it, it is relative to the rental market.

If folks are in the market for homes and they can afford it, they have an option.

Right now, most of these folks that we're talking in this percentage do not, you've you've hit on this, do not have an option.

So how do we set that price affordably?

Uh no PMI.

Uh there are other benefits to this from a tax standpoint.

We've talked about uh so there are other things going in that are savings and are a benefit to families.

You're right, we could look at other methods of doing this, uh, but our consultants, based on what they've seen elsewhere and what this organization has said is uh and its board, is that we're gonna go with the fixed increase per year as a method of doing that, but we can generate if you'd like to see some numbers, some other numbers beyond what we have here on that ROI based on initial down payment.

We can generate that.

We can share that with you.

That would be helpful.

Well, I look I'm I'm in favor of this.

I mean, I I look at this as I'm a general contractor.

I have a toolbox full of tools.

Yeah, yeah, and I've got lots of tools because you need different tools for different jobs, yeah.

And and I see this literally as one more tool.

This tool may not be for everybody, yeah, but it will be for somebody.

Uh the only thing that I was questioning about uh, you know, the the return uh was to try to maybe make it a little more fair to the person that's get got that you know, got that property invested, yeah, taking out that loan.

I mean, it just it looks like to me if we based it on something a little more on an index that would more I think reflective of what a reasonable rate of return would be.

I mean, to me, two percent seems a little low, and but and I understand at the same time I I don't I don't think long term that would necessarily be a negative on the affordability because typically inflation or anything else is gonna run at three percent.

So it's it's not like even getting five percent is gonna way out pace you know, whatever the the rest of the return owned properties gonna be Captain Davis, yeah, Mr.

Chair.

Uh will all the properties be in the city of Chattanooga.

Uh the ultimately the geographic region covered by this extends beyond, but right now the plan C and E slots are all in the city of Chattanooga.

Uh and we're looking actively wherever that location may be around the city to be able to do that.

Uh that board, and I'll defer Mike once answer that, but the board and others have said we want to provide opportunity maybe in broader Hamilton County uh to do that.

So they've set a uh geography that extends beyond the city limits.

Understanding that you all are concerned and considering how we make our investment, what we can do is ensure the dollars and you can talk about that if there's some other thing that we need to account for if there's a willingness to invest as part of that subsidy in to ensure that those dollars are supporting Chattanoogans.

Yeah, and that's my concern exactly is that our taxpayers would be funding affordability outside of the city, and that's absolutely obviously we don't want that.

Absolutely, but we can work to ensure that those dollars you are an investment.

Uh what's gonna uh support Chattanoogans?

And I guess a follow-up question on that if we can is when you all do expand, will you reach out to those other areas, whether it's the county or the city of Red Bank or wherever for for funding as well?

Absolutely.

Okay, yeah, we we think there's tremendous value in investment from anybody that would like a community land trust, so we would absolutely do that.

Yep.

Thanks, Chairman.

Um council, I also um like to add that council has a seat on this board.

Right.

I'm just holding the seat down, but long term we will have a vested interest in making sure that this is successful, and also are able to be stewards of the investment and the monies we put in now.

We'll be able to continue that stewardship in years to come.

So I do want to just highlight that.

You know, um it doesn't begin in here, and I appreciate everybody's thoughts and consideration as we try to figure out how do we make it more affordable.

Councilman Hill, thank you for pulling this up.

Thank you.

I do have one follow-up, just so I can get an idea of the inventory.

Uh in a year, so it's my understanding C and these gonna provide 15, or that's the target.

We're going to but as far as the community land trust, what is your goal for the first year for inventory?

So we have a five-year set of goals.

The first year for the inventory as a whole is 20 units, the second year is 40, and then 50 for year three, year four, and year five.

Our total goal for five years is 210 units.

So those are new units each time, 40 more, 50 more.

Oh but by year five, 210 total.

Yes, cool.

Okay.

That would be amazing to have 210 permanently affordable homes throughout our city.

Okay.

I guess it's for uh vice chair Elliott.

So that in the bylaws, is there a requirement that city council has a yes or see okay?

How long are those terms?

I can't remember how to have full.

I think some of them are staggered.

Oh, yeah, but also need to be advice as a CLT stands up.

Some new members will come in.

Okay.

Members who actually own homes in the uh CLT properties.

Yeah.

Uh but as far as our term, I can't remember.

I'll I'll follow up and I'll say I want to throw out as well.

Is anybody uh what does the home look like?

What does it feel like?

What does it look like?

Kick a tire, if you will.

Uh if anybody would be interested in seeing the product, the type of product and touring uh individually, please let us know.

I know you'll have to be careful as council and how many at any one tie get all of that.

But if you would like to come tour the two homes that are going to be the first two homes into the CLT to see the quality of work going into those homes, what they look like, and how we're gonna be able to price those at that point, knowing the quality going in, uh please reach out and love to give you a tour and show you those two products.

Mr.

Speaking of that, is there do you all have some sort of mechanism that you enforce compliance with property upkeep?

Yes, uh part of the ground lease, uh and part of that stewardship program is to ensure uh that the lot is being mowed.

They have exclusive right to that lot, uh being the tenant under that ground lease, but they're mowing it.

There's opportunity to do improvements to the land.

By the way, they do get a credit for improvement.

If they make a capital improvement, there's a credit beyond the two percent.

What if they do something that improves the house, they get a credit for that?

Uh so those are built into the ground lease, uh, and we do enforce the ground lease to ensure to the point that if they look to sell it to another family, there's a mechanism whereby we come in and take a the we being the CLT, uh, which are also residents, come in and say you need to fix these three things for the next family.

Uh so we want to make sure that the price is affordable, but also the upkeep, the quality of that home uh will extend over time.

Uh so there are mechanisms in place to ensure that.

So we're really preserving that asset uh by virtue of the ground lease and the mechanisms in place in that ground lease.

What are the consequences if they don't what are uh there's any number kind of like an hoa?

Uh so you start with some simple, hey, there could be a fine, there could be things uh related to that monetary.

Uh we may come in to make repairs or improvements and then say there's a charge against that under your ground lease to do that.

Uh there are extreme remedies, but we expect, and every homeowner you live in a neighborhood, you hope all of the homes around you take good care.

The CLT also cares because they are residents and say folks are gonna take good care.

The flip side of that is to be able to say you need improvement, but you may be struggling right now to be able to pay for that improvement.

The CLT can help you with finding uh folks that may be able to provide improvement at some discount or some rate or making sure that you're dealing with quality uh folks doing good repair work in your home.

Uh, we're also a helper in that regard too.

Uh we want to help the homeowner to make sure they can do that.

Okay.

Well, and you kind of got a built-in incentive, right?

If your equity is in the home and not the land, you've got a built-in incentive to maintain.

You gotta maintain it because your home is on it.

Absolutely.

Absolutely.

Uh uh Council Wilma Hill, do you want to sort of wrap us up?

And yeah, um, so um I appreciate very much uh Michael, Chris, uh Janice being here while she could.

Thank you for your leadership and service um on the other CC Elliott.

Um it sounds like between this conversation and the one last week that we we don't have a hundred percent consensus if we do a majority consensus.

So I'd like to see this uh be added to the revised version of the budget administration.

I'm striking the striking the request for the position change.

But just the 750.

Let me just kind of get a sense of everybody.

I'm gonna kind of get a consensus who's in favor of that.

So I think there is a majority consensus to add this into the budget for the 750,000 and strike in the 125.

Thank you very much, everyone, for your consideration of this and Chairman Henderson for your time and attention.

Okay.

All right.

Thank you.

Thanks, guys.

Thank you for all you've done.

All right.

I do want to um, as I mentioned earlier, um we sort of need to make sure we have this baked uh by June the first.

Uh council, this morning we presented the agency funding.

Um I think some of you were watching it online.

Uh do we have a consensus that we are all good with the agency funding?

Yes.

Okay.

All right.

I also presented the uh one million dollars for economic development fund for uh trying to attract quantum.

I'm sort of seeing a consensus for that, so we want to put uh that in the budget as well.

Was there anything else that we went over this morning that we sort of need a consensus on to work in the budget?

All those leave to quantum.

All roads leave to quantum.

I think we just had that one question about going to six o'clock with the head start.

Okay.

Uh yeah, and what the yeah, and uh Caritza had numbers, but they weren't for that six o'clock hours.

So she was working on she was working on that.

See what those numbers look like.

Let's just see if we can make on that.

Okay.

All right, council.

That is uh everything on my agenda for today.

Is there anything else that we need to bring to the floor before we break till 3 30?

330.

330.

Okay.

All right.

Thank you very much.

We'll see you through thank you.