published Saturday, July 12th, 2014

Judge to rule against deal at Black Creek Mountain development

  • photo
    A lot is for sale in the Black Creek Mountain community where several new houses are in the process of being built.
    Photo by Staff File Photo.
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Chancellor Frank Brown on Friday shot down the flawed tax increment financing deal between taxpayers and a group of developers who wanted government assistance to build an estimated $9 million road through a $500 million golf course development.

Brown faxed attorneys a handwritten note advising that he would officially rule on Monday that the bond agreement between the Industrial Development Board and the developers of Black Creek Mountain is invalid, based on violations of open meetings rules, conflicts of interest and questions over whether the residential project itself complies with state law.

Brown will rule on Monday that the proposed development is "insufficient to meet the definition of a project," as defined in the statute for tax increment financing, or TIF.

Because the industrial development board's decision to approve the TIF violated the Tennessee Open Meetings Act, the entire deal is invalid, which negates the need for a trial on the merits of the project itself, he wrote.

After throwing out the opinion of attorney George Masterson -- an attorney who received $50,000 from the developers -- that the TIF agreement was legal, Brown encouraged the parties to solicit the opinion of the Tennessee attorney general before starting the entire process over again.

Though the city, county and developers may appeal, former IDB chairman Ric Ebersole suggested Friday that it would take more than just a new agreement to secure TIF financing for the road up Aetna Mountain.

"I don't think that project will ever receive an unqualified opinion because I don't think it meets the definition of a project," said Ebersole, who is now retired. "The law talks about blighted areas, and, well, that's not a blighted area."

The ruling would mark a victory for Helen Burns Sharp, a retired city planner who has been sharply critical of what she sees as corporate welfare for wealthy developers, and who hired attorney John Konvalinka to sue to stop the bond deal.

Contact staff writer Ellis Smith at 423-757-6315 or with tips and documents.

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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