Chattanooga citizen files second open government lawsuit over economic development

Chattanooga citizen Helen Burns Sharp has filed a second lawsuit against Chattanooga’s industrial development board, alleging more violations of the Tennessee Open Meetings Act and the Tennessee Public Records Act, among other state laws.

(See Chattanooga Times Free Press story here.)

Helen Burns Sharp

Helen Burns Sharp

Sharp won a lawsuit earlier this summer when a judge ruled that the Industrial Development Board (IDB) of Chattanooga violated the Sunshine Law when it approved tax-increment financing for a golf course community based on deliberations that took place outside of a public meeting. (See Chancellor Frank Brown’s ruling).

Sharp has tried to draw attention to the IDB’s actions, saying they are making key decisions on how to use government tax money without proper public oversight. The Tennessee Open Meetings Act says “…the formation of public policy and decisions is public business and shall not be conducted in secret.”

She has also argued that the Black Creek Mountain Development does not meet state requirements to receive tax-increment financing and, in a new revelation, that one of the board members of the IDB is not a resident of Chattanooga.

With her new open government lawsuit over economic development, Sharp argues that the IDB “put a Band-aid over a flawed project” by trying to fix its earlier Open Meetings violation through a new vote last month that ratified the earlier 2013 vote on financing for the Black Creek development. 

Sharp’s lawsuit filed Friday alleges that “At the 08/11/14 Meeting and the 08/15/14 Meeting, there was no discussion among the members of the Board pertaining to why the actions of the IDB in February of 2013 should be ratified or how the Proposed Black Creek Development was a project. Members of the Board perfunctorily rubber-stamped whatever previous illegal actions were done in February 2013…It was quite apparent there was no meeting in compliance with the Sunshine Law requiring deliberations and discussions be made in public.”

The board allowed 15 minutes for public comment at its Aug. 15 meeting, Sharp said. But after public comments in which Sharp’s attorney gave a short presentation, she said no questions were asked by the board. The board also received a presentation from Michael McMahan, the former city attorney who had played a key role in advising the board about the tax-increment financing. Sharp said the public was not given an opportunity to respond to McMahan’s comments. Then, she said, without any discussion among board members, the board voted to ratify the financing decision.

Sharp also alleges that the board violated the Tennessee Public Records Act when it “willfully refused to disclose” public records that the board had received for use in the two key August meetings until after the re-vote on the financing on Aug. 15. Sharp’s attorney John Konvalinka with Grant, Konvalinka and Harrison had requested the documents on Aug. 7. Her lawsuit also alleges that notice of the meetings for both Aug. 11 and Aug. 15 were inadequate.

Sharp says she has wanted the decision on the financing to go back to the elected bodies – the county commission or city council – because she sees it as a public policy issue and she thinks those governing bodies have more accountability to the public.

“Who is looking out for the public interest here?” she asked.

Sharp’s legal bills fighting the IDB have grown to about $77,000 through July. She said she has received about $12,000 in contributions to help defray the costs, including checks for $25 mailed in from people she doesn’t know who have heard about the situation through local media. And Sharp has a website where she outlines the battle and posts documents.

“I did not enjoy the first lawsuit and certainly did not want to file a second,” she wrote. “Someway, somehow, sometime soon, I hope that the City Council and the County Commission will come up with a more deliberate and transparent way of deciding who gets tax breaks. In 2012 the City Council passed a resolution establishing a moratorium on approval of any tax increment financing until they had adopted appropriate guidelines. The Council has yet to adopt guidelines. How, then, can the Black Creek TIF be “re-approved” until guidelines/criteria are established and the project goes back through the approval process, with the city, county, and IDB?

“…The criteria might include how the project is eligible under state law, how it benefits the public, and why the public subsidy is needed. (This is the so-called “but/for” test that involves a demonstration that the project wouldn’t happen without the tax break.)  An independent consultant could be hired to prepare a staff report to help frame the issues regarding how the proposal does/does not meet the local criteria and TIF statutory requirements. The report could also propose a mandatory “claw-back” clause that would protect the public if the companies’ projections on investment and jobs are not met.”



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