Chattanooga City Council Meeting: Shelter Proposal & PILOT Report - August 4, 2026
Chattanooga City Council Meeting: Shelter Proposal & PILOT Report - August 4, 2026
The City Council held a meeting on August 4, 2026, from approximately 2:00 PM to 3:30 PM, featuring two main agenda items: a presentation by Baron (from the CHAT Foundation) on a proposed large-scale low-barrier homeless shelter, and an annual PILOT (Payment in Lieu of Taxes) report presented by Sharita Allen, Senior Advisor for Economic and Workforce Development. The meeting also included a brief update on the status of the TIM (TIF) report and a request for future discussion on the BEN TIF.
Public Comments & Testimony
- No public comments were made during the meeting.
Discussion Items
-
Proposed Low-Barrier Shelter (CHAT Foundation)
- Baron presented a proposal to build a 24/7 low-barrier shelter serving 400–500 individuals on the CHAT Foundation's existing 11th Street property. The plan involves renovating a subterranean basement and back administrative offices, adding a walled courtyard, and co-locating male and female residents on separate floors (approximately one-third female, two-thirds male). The shelter would be year-round and allow daytime access, unlike the current 6 PM–6 AM model.
- Baron noted Chattanooga's unsheltered homeless rate is 68%, compared to 22–25% in other Tennessee metros, and that unsheltered individuals take an average of seven years to get rehoused versus 400 days for sheltered individuals. He also cited a 3–4 times higher mortality rate for those unsheltered more than a year.
- Two primary options were discussed: new construction on a city-owned lot or building on CHAT's footprint. Baron favored the latter for zoning, economies of scale, and lower operating costs (estimated $150,000 per year if on-site, versus $750,000 for a warehouse conversion or $930,000 for a bus barn). He requested $2.8 million in capital funding.
- Council members raised concerns about the concentration of 400–500 homeless individuals, community opposition from the MLK Neighborhood Association (last met 18 months ago), property maintenance issues (trash, defecation, theft), and safety of co-location. Baron argued that the neighborhood's concerns are about alleviating existing problems, and that a shelter would allow police to offer a ride to shelter instead of just displacement.
- Councilwoman Noel requested that Baron meet with the MLK Neighborhood Association before any further steps, noting that 18 months ago the group expressed different views than what Baron reported. Baron agreed to engage the community but said he was waiting for direction from the council and mayor's office.
- Vice Chair Elliott and Councilman Henderson asked about differences from the failed sanctioned encampment. Baron cited CHAT's 45 years of experience, successful operation of the cold weather warming shelter, and plans to adopt best practices from eight other low-barrier shelters.
- Councilman Hardy (via question) asked if CHAT would retain other properties; Baron clarified they are selling three permanent supportive housing properties (due to loss of HUD funding in 2024) but retaining investment property.
- Conclusion: Baron will submit a detailed operational plan, budget, and community engagement timeline by September 1, 2026. Councilwoman Burse requested additional information be compiled and sent to the clerk for distribution.
-
Annual PILOT Report (Sharita Allen)
- Sharita Allen presented the required annual review of the city's PILOT (payment in lieu of taxes) economic development incentives. Staff will provide separate reports on workforce development, small business programs, and TIFs.
- Three pilots sunset in 2025: MM Industries (7-year term, $995,952 in incentives, $29 million cumulative payroll, 97 jobs), OP Mobility (10-year, $3 million incentive, $174 million payroll, 384 jobs), and Unum (parking garage, $5 million incentive, $20 million garage, opened 12 acres for development). All are now on full property tax rolls.
- Existing pilots (6) detailed: Coca-Cola (sunset 2027, $6 million incentive, $35 million payroll, $4 million property taxes paid); Gestamp (supplier for VW, $2.7 million incentive, $194 million payroll); Steam Logistics (runs to 2031, $525,000 incentive, $11 million payroll, jobs fluctuated due to tariffs); Volkswagen (2010–2039, $238 million incentive, $2 billion payroll from 2016–2025, $50 million property taxes); Young Fang (10-year, $1 million incentive, $490 million payroll); Big Blue/Novonics (recently approved, not yet active).
- PILOTs are typically 70% abatement but not 100%; companies pay reduced property taxes that go into the general fund. Compliance is measured annually: companies report investments and jobs; penalties or clawbacks are triggered based on contracts. For example, Gestamp contractually required 528 jobs but actually had 571, so compliant.
- Council members discussed the need for clearer annual reporting, including a column showing net gain from abatement and full property taxes after sunset. Councilman Hill requested that the report be sent to council. A suggestion was made to have an attorney-client session on a separate matter.
Key Outcomes
- Shelter proposal: No vote was taken. Baron will return with detailed plans by September 1, 2026. Council urged immediate community engagement with the MLK Neighborhood Association. Council members can submit additional questions to the clerk for compilation.
- PILOT report: Report accepted as information. Staff will provide requested additional data (full property tax post-sunset, net gain column for future reports). The TIM (TIF) report will be presented at a later date.
- Next strategic planning session scheduled for August 18, 2026, to discuss council priorities, including budget issues with Councilman Henderson and Dr. Acuff.```json {
Meeting Transcript
Working with us so that we can be aware of that. Um so yeah, that's kind of our parameters for this part. And I so we have our pilot and tip discussion as well. So if we could spend about half an hour on this, half an hour on that, and we'll all have a minute to catch a breath before our um before our meeting at 3 30. Well, thank you. Thank you for your time. Um, if if I can just start by taking two minutes to explain why this is so critical, is as I think you all know uh the per capita homeless rates in Chattanooga are really no different than other Metro Tennessee cities. However, our unsheltered uh rate is significantly higher, approximately 68% uh compared to about 22 to 25 percent in other metro areas, and the reason is there's just simply not enough shelter beds. Why does that matter? Um, when somebody is sheltered but homeless, it takes approximately or on average 400 days to get rehoused. But when somebody becomes unsheltered, that number skyrockets to an average of seven years. The reason for that is um it's really hard to do the things that you need to do to get rehoused when every moment of your life is faced with survival. And so a 24-7 low barrier shelter would allow people uh safety, security, and assistance uh to uh work on whatever is necessary to develop an income stream to get benefits to uh to get housed and shorten that amount of time being unhoused. And so we really believe that uh the absence of uh such a structure in this city exacerbates what is already a really big crisis. One last thing when uh somebody experiences more than a year uh unsheltered, uh their mortality rate increases three to four times that of somebody that experiences sheltered housing, and so this is not just a problem of what it looks like on the street, this is also a life and death issue. Uh so in January we we've submitted um three proposals initially to the mayor's office uh about different options. One was a warehouse that was available uh at 12th and Peebles that uh we felt could be uh restructured for a shelter. Uh we also considered uh the uh the the lot that was the former sanctioned encampment that's a city owned lot that would be a build to suit kind of structure. Uh we initially looked at the family promise building, and then um uh Kevin Rogue came back and said, Would you consider building on your own footprint? We started working with our architect to look at different uh concepts with that. Um I think the two most viable options really are um the city-owned lot building new construction or uh building it on our footprint. Um as it's been explained to me. Um there's probably some political expediency in building it on our site because we're already zoned as being able to have a shelter and have residences there, it's on our property, and there'd be some economies of scale gained and that we could um uh have a somewhat lower cost of operations, being that we currently have 56 people working on our site currently, and some of those could be shifted over to shelter operations. Um I met with um councilman Harvey and uh and chief of staff rogue about six weeks ago uh talking about this very subject and about what it would take to uh put together a proposal uh a fleshed out proposal for uh building on our site. And so we are currently in the process of working with our architect to design a facility that would hold approximately 400 to 500 individuals on two floors. Um interesting, you would not be able to tell any difference looking at our structure from the street because this would be the subterranean basement that we have uh that would be renovated and the back administrative offices. Um we're also looking to uh redesign the playground into a walled-off courtyard that would allow an outdoor gathering space because I don't think anybody's happy with the amount of gathering that happens on um 11th Street, and so between our community center, our porch, and the back area, I think that would address a lot of concerns. A lot of cities that build these have a pretty pretty big price tag because they're also building dining facilities, community center facilities, case management facilities, clothing departments, what have you, medical facilities between us and homeless health care, all that exists. All we need is really to establish the dormitory space. We're we're really still working through that because my architect and I just got back from uh Colorado Springs in Memphis this weekend uh touring a couple facilities. Um but I hope to have that, the operational plan and a budget uh into the hands of you in the mayor's office at the very beginning of September. Initially, we um in the proposal that I submitted, we asked for 2.8 million dollars of uh capital funds because that was what I was aware was was on hand and available for a project such as this. Um depending on the what the architectural plans look like and what that's going to determine our staffing plans, uh some of our utility costs, and that'll inform our budget. But when we were doing a similar exercise of determining what our budget would need to be for the converted carta bus barn, uh I believe the annual operating costs were somewhere around, and Casey, do you remember? Was it was like $930,000 annually? Do you remember? I don't remember off the top of my head. I could go back and look at some of the that's the number that sticks in my head. We're hoping that we can come in closer to $150,000 if it's on our site. Um so yeah, those are those are the two options that I think would be uh best. I really don't like the idea of reconfiguring or converting an aging warehouse uh that was built for tomatoes and not people. Um the family promise bar uh building would only hold uh approximately 80 individuals, uh, which really wouldn't really make a significant impact given the fact that we're looking at an unsheltered homeless population somewhere around a thousand to twelve hundred people in Chattanooga. I have reached out to a number of council members from the county uh to let them know that I'm gonna be asking them for some money as far as this is concerned as well. We're pretty well positioned as far as partners uh in the area for partnering for services, whether it's uh adult education, health services. We're currently working with uh UTC, Chad State, and uh Southern to provide a lot of those services. Um I'm pretty fond of partnering with other organizations that are looking to uh to support this effort. Uh one other thing is we are pleased that this facility would be able to house both um male and female individuals, which is fairly unusual as typically cities will uh have one shelter devoted to one gender, another organization perhaps working with another gender. So we're looking at a one-third, two-thirds split women to female just because that's the basic makeup of our uh population that we're serving. Okay. Yeah, councilwoman burst.
openpublica.com