Dandridge Council Declines Support For Low Income Housing Project

Dandridge Board of Mayor and Aldermen declined to sign a letter of support for a proposed low income housing development that would have utilized a part of the old Dandridge Elementary School. The school, which is a historic building located in the Historic District of downtown Dandridge, has spent several decades in disrepair. The building is privately owned by Jason Wice and has been a concern of the Town of Dandridge for several years. Last week, the Board was presented with a letter and request for the signature of Dandridge Mayor George Gantte, to support a low income tax credit housing project on the historic site. The letter in question did not identify the proposed developer and offered support of, not only the project, but a PILOT which would exclude developers from paying property taxes for a minimum of 15 years.

Alderman Nelson and Alderman Chambers offered a motion to approved the signing of the letter and the floor was opened for discussion. Alderman Depew request to speak to his opposition of supporting the request. Depew stated that he had contacted the Tennessee Housing Development Authority directly for answers to several questions. He distributed to the BMA the questions asked and the answers given by the THDA. Foremost, Depew stated that this was a private business venture designed for profit and he felt it was beyond the scope of responsibility of the Board to offer support, particularly without time for citizen input. He noted that if the developers are awarded low income tax credits for low income housing the taxpayers will receive no property tax benefit for 15 to 23 years. Depew, who sits as Treasurer of the Jefferson County Industrial Development Board, explained that the property tax exemption (PILOT) was automatic and did not require approval of the Town or the County IDB, though there would surely be costs to the taxpayers in association with the project including but not limited to infrastructure, police and road improvements, as well as fire services and schools. Though the project was presented to be a “Senior” low income housing project, after 15 years the development could convert to general low income housing. As presented, a senior would have to be 62 years of age or older but could have custody of minor children. Depew said that, per THDA, residents of the development were on a first come first serve basis and Dandridge or County residents would have no preferential treatment. The listing would be put on a THDA web site and the residents would be taken in chronological order from anywhere in the state or even out of state. The only requirement was income and the commitment to staying in the development for one year. With no property taxes, no preference of housing for local citizens, the ability to switch from senior to general low income housing 15 years into the 30 year required life of the development and the increased need for services that would likely be costly to tax payers, Depew stated that he could not support this project at this location.

The Developers, who were not identified, were present for the agenda item, along with Wice. Though a spokesman for the developers denied that the project would be property tax free for 15 to 23 years of the 30 year obligation to remain low income housing, it was pointed out by Alderman Elder that the final paragraph of the letter states “ Under Tennessee Law, the development can request a Payment in Lieu of Taxes (PILOT) for 15 years upon an award of the Low Income Tax Credits from THDA. The PILOT request will follow all applicable rules.”

Alderman Nelson spoke in support of the project stating that a one person $19,600 income would allow many to utilize the development. However, the $19,600 annual threshold includes a caveat that the applicant cannot have more than $3500 in assets including property, bank accounts and savings, and other assets. Food stamps and section 8 housing credits can be counted as “in kind income”. It was noted that the income divisions would be 20% of residents must have an income below 50% for the average median income (AMI) for the Morristown Statistical Area. 40% must be 60% or below the AMI and 40% combined must have an average of 60% or below the AMI with no resident exceeding 80% of the AMI. For those that are on the 80% end of the income ratio, rent would be expected to be in the neighborhood of $782 per month according to THDA. The current average rent in the Town of Dandridge is $700 per month.

While all Aldermen spoke of the desire to see something done with the old Dandridge Elementary School several acknowledged concerns regard the proposed development and its impact on the local taxpayers. Alderman Reese also expressed her concern that local citizens would likely not be residents in the proposed development and Dandridge taxpayers would be financially supporting the development through infrastructure. Alderman Kesterson acknowledged the need for something to be done with the declining property but stated his fear that this would be something that would prove to be detrimental to the Town over the course of time. After much discussion, the final vote found four (Reese, Elder, Kesterson and Depew) against and three (Mayor Gantte, Nelson and Chambers) in favor.

The proposed developers were not available for comment following the meeting, as they left after the vote and declined to provide a business card to the Jefferson County Post at last week’s work session.