Hamilton County board hears plan to lease West 40th land for 75-unit employee housing

Chattanooga Neighborhood Enterprise (CNE) proposed on Dec. 21 to lease two Hamilton County Schools parcels on West 40th and build roughly 75 workforce housing units intended for district employees and other public servants.

Chris Thompson, CNE chief executive officer, told the school board the nonprofit would be the primary financier and property manager; the district’s only contribution would be leasing the land and retaining ownership. "HCS will not be contributing financially in any way," Thompson said during the presentation. CNE said its goal is to keep rents ‘‘under $1,000 per person’’ for targeted employee households.

Why it matters: board members said teacher recruitment and retention remain a high priority and that housing access can be an important incentive, but they also raised legal and operational concerns about liability, lease terms and community impact. Superintendent (Dr.) Robertson introduced the partnership and said a letter of intent to give CNE an option to lease will be brought to the board for a vote on Jan. 15; the letter would be a framework rather than the final lease.

What CNE described: Thompson and CNE staff said the West 40th site consists of two district parcels near St. Elmo and Alton Park and that the proposed plan would preserve the existing Teacher’s Place building while placing cottage‑style one‑to‑three‑bedroom units on the remainder of the land. CNE said the organization would assemble a capital stack using foundation support, tax credits and other sources and that it expects to absorb typical operating risks as developer and landlord. "We're the developer. We're the property manager ... that risk would be taken by us," Thompson said.

Board questions and concerns: members repeatedly sought clarity on which costs and risks would remain with the district if the land is leased. Board member questions included whether the district would still be liable for injuries or other claims if it retained title, how a pay‑in‑lieu or tax pilot would work, what tenant eligibility and lease durations would be, and whether an RFP was needed rather than negotiating with one partner. A legal adviser said indemnity provisions and insurance would be used to allocate risk, and that the Jan. 15 package will include a letter of intent outlining subsequent steps.

Community and procurement issues: several board members emphasized the need for robust neighborhood outreach in historically Black neighborhoods near the site and expressed wariness about inadvertently accelerating gentrification. One member asked whether the district should issue a competitive RFP; counsel and board members said because this is proposed as an innovative, one‑off pilot, they were comfortable moving forward without an RFP but recommended continued review of procurement implications.

Next steps: CNE invited board members to tour its properties and said it will return on Jan. 15 with an option‑to‑lease document for initial board consideration; if the board approves the option, CNE and district staff will negotiate a master lease and financing contingencies and provide quarterly updates during due diligence.

No formal vote occurred on Dec. 21. The board’s Jan. 15 meeting will include the option‑to‑lease item for consideration.