Stimulus Funds at Risk on Fairmount Project

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The Chattanooga Housing Authority could lose $4.2 million in stimulus funds if the city thwarts progress on a proposed development at Fairmount Avenue, a C.H.A. representative said Tuesday.

C.H.A. Executive Director Elizabeth McCright expressed disappointment that the Chattanooga City Council did not notify the agency before considering and approving a resolution that blocks the renovation of an existing 28-unit complex. She spoke at length on the project Tuesday evening and offered to make a complete presentation.

"There seems to be the impression that the C.H.A. has the ability to redesign the project or utilize the money for different sites, which is not true," she said. "The funding for this grant is part of a stimulus grant. 100 percent of the money must be obligated—and in our world 'obligation' means construction contracts executed—by Sept. 23, 2010.

"In advance of that, all uncertainties regarding the project must be removed. Architectural design must be completed, and the project must be put out to bid. The time frame is already extremely tight."

C.H.A. modified the original grant proposal in December after city officials and North Chattanooga residents criticized the project. Originally, C.H.A. planned to turn the existing site into a 48-unit apartment complex. McCright said the revised proposal for 36 units had to score the same criteria with the U.S. Department of Housing and Development (HUD) as the original C.H.A. proposal from July 2009. 

"Our ability to modify the grant is very limited, and we don't believe that we have time left to undertake another project modification with HUD," she said.

Last week, Chattanooga Mayor Ron Littlefield told council members that he would like to see the number of units at the site between six to ten. C.H.A.'s current proposal "increases the density of an already rather densely developed site from 28 units to 36 units," he said. "The road into and out of this site is effectively one lane."

In addition, the mayor said he is in discussions with HUD representatives to determine how the grant would be affected by a proposed zoning change, which the council's resolution initiated. The Regional Planning Commission will consider the zoning change on Feb. 8.

C.H.A. will make a presentation on the Fairmount Avenue project to City Council members on Jan. 26 at 2:30 p.m. prior to the City Council's regular agenda session.