City to collect Chattanooga BID fees as lawsuit still looms


CHATTANOOGA, Tenn. (WDEF) – Even though a lawsuit still looms trying to stop it, the River City Company continues to push the Business Improvement District forward.

“What we’re doing right now is, the first step is the formation of the board of directors for the business improvement district. So, nominations for those board members are open right now,” River City Company Marketing and Communications Director Amy Donahue said.

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The district was petitioned by some property owners.

It was formed after Chattanooga City Council Members approved it.

Businesses in the downtown district will have to pay a fee to provide additional services.

“It’s cleanliness. It’s enhanced beautification projects. It’s enhanced safety initiatives. And all-in-all, it’s just to, again, just continue all the great work that is happening in downtown Chattanooga and just to be able to provide enhanced services there,” Donahue said.

The district will operate with a board and to follow state law, the city will collect fees from the special assessments.

Council members approved that Tuesday night voting 5-4.

The fee will be a line item on property taxes.

“The city basically has to put in place a function that allows billing very specific properties. Getting the property owners in place and really adding that to the system,” Council Member Ken Smith said. “Two percent of the fee will go to administrative cost. So that should cover the cost of the city doing that work.”

Currently, there’s a lawsuit against the city claiming it was created illegally.

Fees will go out at the beginning of October.

If the court voids the district, the owners would be due a refund.

“Basically the city just wouldn’t collect the fees and if somebody sent a check in or somebody did pay it then the city would have to reimburse that until there was a legally binding, an enforceable ordinance on the books,” Council Member Smith said.

Despite the lawsuit, Donahue said they’re confident they’re moving forward.

The city has filed a motion to dismiss the lawsuit.

A hearing has been set for September 23rd.

Nominations for board members are open until September 16th.

They can be made on the BID’s website,

Donahue said they hope to deploy services the 1st quarter of 2020.