The board of mayor and aldermen has reconsidered its stance on a loan for the Katewood development on Cedar Street and has now given it the city’s blessing.

The Reserve at Katewood had requested a $250,000 Urban Development Action Grant (UDAG) loan to assist in the ongoing construction costs of three apartment building complexes currently in the process of being built. BoMA had originally turned them down in an earlier meeting because they did not have enough information and no one was present on behalf of Katewood to explain about the loan.

In the most recent meeting, Interim City Administrator Jason Damron conveyed Katewood’s request, noting that the complex represents a strategic investment. “It addresses one of the most immediate constraints on Tullahoma’s growth, the availability of attainable workforce housing,” read from his report, noting the part of the UDAG revolving loan fund is to catalyze private investment that generate measurable public benefit and have a long-term economic return to the city of Tullahoma.

The request revealed there is a funding gap and that without the UDAG funding, the project would likely by delayed and reduced. The UDAG would help bridge the gap so the project could continue moving forward.

Alderman Bobbie Wilson was not big on using city based financing. She said she would like to see such funds focused on job creation and projects rather than just residential development.

Sue Wilson of the City Finance Department explained the load does not put any financial burden on the city.

“This would bring additional property taxes and additional housing,” she said. “It’s a good project. It’s a good investment.”

She explained it is a revolving fund where the developer pays back its load into the fund. Sue Wilson said there are funds for three more such loans should the city see fit in other areas.

Damron pointed out the project would generate $50,000 in additional property taxes.

Aldermen Matthew Bird pointed out the housing will be perfect for people who are “fresh out of college or trade school who are moving to Tullahoma to work.”

The motion to make the load carried 4-2 with Aldermen Kurt Glick and Jerry Mathis voting against.