Thursday, November 27, 2014 · 6:06 p.m.
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Chattanooga City Council. (Photo: Staff)

A key revision to a complex and controversial three-way land swap between the city, the Department of Education and the Chattanooga Housing Authority has members of certain parties ready to move forward—but not everyone is on board. 

On Friday, news broke that the housing authority would agree not to develop housing on the site of the East Brainerd Elementary School, part of the land it would receive were the deal to take place.

Instead, the entity would partner with the city to jointly sell the property for mixed or commercial use.

Fallout from the proposal made its way through the chambers of the City Council and the County Commission this week, as the council opted to defer voting on the resolution for a week and commissioners halted progress on a plan for replacing East Brainerd Elementary School. 

Initial news of the land swap blindsided many.

The original plan would transfer ownership of the Westside's Dogwood Manor Apartments from the city to the housing authority. In exchange, the housing authority would give the city the former Poss Homes site, which would be traded to the school system, along with $429,000 for a portion of the East Brainerd School site on Brainerd Road. 

The other portion of the school would be given to the city, and the school system would use the Poss Homes land for building a new football stadium and athletic facility for the Howard School.

Objections to the proposal were wide-ranging. City Councilman Jack Benson said Tuesday he received a "firestorm of resistance" to the swap from constituents out of concern that the housing authority would use the land for a housing development. Several commissioners, who approve budgeting for the school system, said they had not been informed of the deal as it was planned. 

And many school board members claimed to have been unaware of the swap until this week. Board member David Testerman issued a statement saying he was "greatly surprised" to learn of the deal, which includes a portion of the district he represents. 

"The community around the new school has not been consulted at all about this—at the very least, this is a serious breach of transparency in the government process," he said. 

But news of the housing authority's agreement to partner with the city to sell the site swayed the minds of a few on Friday. Although Betsy McCright, executive director for the housing authority, declined to comment on the agreement, city Director of General Services Dan Thornton confirmed it had taken place and added that the entities would allow for the school to continue operations for at least two years while a new facility is built at the site of the former David Brainerd School on Igou Gap Road.

"We would take that piece of property after all the exchanges are completed, and we would allow the school to operate for two years before we would even take ownership of the site," Thornton said. "We would then put out a request for proposals that would look at the best project that yields the highest tax value for down-the-road taxation."

The proposal was enough to change Benson's position on the issue. 

"This is what I wanted," Benson, who motioned to defer the council's vote on Tuesday, said. "I wanted it to stay one parcel, in the name of the city, because I thought this was the best deal for the citizens of this city … This new proposal is good financial action representing the city."

But potential problems still surround the deal, particularly with regards to land values. According to a Times Free Press report, the East Brainerd Elementary School site was recently appraised at $2.34 million, the Poss Homes site is valued at $1.87 million, and the Dogwood Manor Apartments is worth $1.7 million—along with an additional $2.4 million in debt owed by the city for upgrades. 

The appraisal figures have been disputed. Commissioner Tim Boyd said Friday he thought the East Brainerd Elementary site was worth $5 million.

Boyd suggested forgoing the land swap and having the site sold as is to the highest bidder. 

"Why would I agree to a land swap deal when we've got a piece of property on the open market we know is worth $5 million; why would we let that deal happen for a place that's less than $2 million?" Boyd said. "That's not happening. East Brainerd Elementary School is not going to be a part of any deal, as far as I'm concerned. It needs to go on the market to whoever is the highest bidder. Then the commission takes that money and earmarks it for capital growth projects in the school system … we need classroom space more than athletic facilities."

Boyd then suggested the deal was brokered around the city trying any way to get rid of Dogwood Manor.

"This three-way swap all centers around the city wanting to get rid of Dogwood Manor, which has been a money pit ever since they got it," he said. "They made their bed, they gotta sleep in it. They don't need to involve us."

Although the City Council is set to vote on a resolution regarding the deal next week, school board members will not take it up for a vote until their session scheduled for June 21. 

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