River Gorge Drive becomes a dirt road leading up a hill near newly constructed homes in Black Creek Mountain subdivision in Chattanooga.A Chattanooga judge cut off $9 million in taxpayer support for the Black Creek Mountain golf course community, ruling against a powerful group of developers and government officials in a closely-watched case.
Chancellor Frank Brown ruled that the Industrial Development Board violated Tennessee's Open Meetings Act when it secretly allowed funding to go forward for a disputed road up Aetna Mountain, which would have been funded using tax increment financing.
The squabble, which drew in attorneys for the city and county, as well as former Mayor Ron Littlefield and County Commissioner Larry Henry, centered around a letter written by Nashville attorney George Masterson to the joint city-county board.
The letter, which assured the board that taxpayer funding for the Black Creek Mountain development was legal, posed a conflict of interest since Masterson was being paid $50,000 by developers at the time, putting him on both sides of the transaction, Brown said.
"The opinion letter was not delivered to board members in a public meeting nor did IDB vote to accept Mr. Masterson's letter as an 'unqualified' opinion letter," Brown wrote in his order. "Either Mr. Masterson had, at a minimum a conflict of interest, or the IDB should have used independent counsel or the attorney general for its decision and not Mr. Masterson's opinion, which was the product of some qualms and rewriting."
Those violations render the IDB's decision to award funding to Black Creek Mountain "null and void," Brown said, which leaves the fate of the road up Aetna Mountain somewhat in limbo.
Brown did not suggest a course of action for developers to pursue in getting their project re-approved, but at minimum the IDB would be required to meet again on the subject.
Brown's decision is a victory for Helen Burns Sharp, the former city planner who has been sharply critical of what she calls "corporate welfare" for developers who are building a high-end residential project that crosses over into Marion County.
She has repeatedly questioned through two city administrations what she called vague maps, tricky legal wording, interlocking relationships and secret meetings. Brown, along with attorney John Konvalinka, spent thousands of dollars of her retirement savings since 2013 in a lawsuit against a opposing side composed of developers, city and county officials.
"Ms. Sharp has accused IDB of secret meetings in its consideration of two opinion letters from Mr. Masterson and alleged such violated the open meeting law, which meant its actions would be declared null, void and of no effect, and the court agrees with her," Brown wrote.
Brown's ruling is also somewhat of a turnabout for the city and county, which had filed a motion for summary judgment against Sharp. However, just prior to the hearing, Brown struck Masterson's opinion letter from the record, eliminating the main piece of evidence upon which government officials had based their case.
As a result, Brown ruled in Sharp's favor without so much as a trial.
Contact staff writer Ellis Smith at 423-757-6315 or esmith@timesfreepress.com with tips and documents.