Boaters cruise past old silos that are visible above the water
of Tellico Lake near the Tellico Village development

Top Story Chattanooga Times Free Press
Wednesday, September 27, 2006

Transformation trade-offs

Rural communities assess costs, benefits of housing developments

By Cliff Hightower Staff Writer

Rising from the waters of Tellico Lake, corn and grain silos jut skyward, yards away from $500,000 homes and well manicured golf courses. They serve as reminders of Loudon County’s past and future, residents said.

Since TVA built the Tellico Dam in 1979, the lake has reshaped the landscape and helped lure more than $2.5 billion in residential development, with plans for more.

"Tellico Lake, when they first dammed it 25 years ago, was pristine," said Van Shaver, a Loudon County resident and former county commissioner. "It’s not that way anymore." Since the mid-1980s, a handful of upscale developments such as Tellico Village have sprung up in East Tennessee, luring retirees, mostly from Northern states and Florida, officials said.

One of the developers at Tellico, Mike Ross, hopes to replicate the Tellico success on both the Nickajack and Chickamauga reservoirs in Marion and Meigs counties. Proponents of the developments, which could bring more than 2,000 upscale homes to Southeast Tennessee in the next 10 years, say the new construction will boost the economies of the two counties.

In Loudon County, supporters said the developments pumped more tax dollars into the rural communities. But critics said the new homes brought increased traffic and concerns about the environmental effect to lakes. They also said the developments contribute to an overall increase in property value, which resulted in some landowners paying higher property taxes.

Chattanooga developer John "Thunder" Thornton, who is building Tennessee National, a gated community in Loudon County with a golf course designed by golf legend Greg Norman, has teamed up with Mr. Ross to build Rarity Club at Nickajack Lake.

The development will have about 1,000 homes, a champion- ship golf course and a final cost of $750 million in 10 years, Mr. Ross said.

He also is developing the new community along Chickamauga Lake in Meigs County, which will have about 1,000 houses, about the same amenities and a final price tag around $500 million or $600 million, he said.

A large-scale development can benefit the entire community, Mr. Ross said. "I think it’s been instrumental in keeping taxes low (in Loudon County)," he said.
Mr. Thornton said development has led to increased building and manufacturing jobs in Loudon and Monroe counties, and the same can happen in Marion County.
"You’ll have more block layers, you’ll have more teachers, you’ll have more preachers," he said. "Change is going to happen. You have to develop responsibly."

The first lakeshore development to transform East Tennessee was Tellico Village, built in 1986 by Cooper Communities, director of sales Wes Cooper said.

The development now includes more than 6,400 homes with an average price of $350,000 to $400,000, Mr. Cooper said. The neighborhood is 90 percent retirees and 10 percent young professionals, he said.

School records show about 60 children attend Loudon County schools from Tellico Village, a development that holds about 13,000 people.

"Our residents don’t have a big impact on the school system, which is a bonus for Loudon County," Mr. Cooper said. "It doesn’t cost Loudon County too much in services."

County records show Loudon County received $21.4 million in property taxes in 2006. Residents of new lakeshore development paid $6 million in taxes, or 28 percent of the total tax bill, records show.

"It’s an industry within itself," Loudon County Mayor Doyle Arp said. The money has been used to pay for an addition to the justice center, more school programs and better services, he said.

Developments such as Fanning Bend on Tims Ford Lake in Franklin County have "been very vital to our community" County Mayor Richard Stewart said. "It’s provided a lot of revenue to us over the years," he said.

Homes in Franklin County are marketed as second homes for residents from Nashville, Chattanooga and Huntsville, Ala., Mr. Stewart said.

Although Franklin County officials couldn’t specify the amount of property taxes paid by residents of the Tims Ford communities, they said the impact of lakefront development is significant.

Officials with both counties said property taxes have remained low because of new tax money from development.

Loudon County passed its first property tax increase in 19 years last year, and county officials said that over the last several years property tax rates have dropped because of additional growth.

But Loudon County resident Pat Hunter, president of Clean Air Friends-Clean Air Kids, said property values have shot up since Tellico Village was built. That can cause property taxes for existing homeowners to increase, she said. "It’s getting harder to live the American dream of owning your own home," she said. When she first moved to Loudon County, lots sold at $1,500 to $2,000 an acre, she said. Now lots of a quarter of an acre are $40,000 and up, she said.

Mrs. Hunter said most Loudon County residents remember when farms dotted the landscape where Tellico Village and the Rarity communities now sit. She said mom-and-pop stores now compete with chain stores. People moving into gated communities are more isolated from the rest of the community, she said.

Both counties are seeing problems from lakefront growth, officials said.

In Franklin County, community leaders are worried about water quality and increased boat traffic on Tims Ford Lake, especially with the new development of Fanning Bend coming into the area.

Loudon County residents are dealing with the loss of once public lands.

"We want controlled growth, smart growth," said Steve Hammond, chairman of Friends of Tims Ford. Mr. Hammond said water quality has gone down in the area and the boat accident rate on the lake is among the worst in the state. State records show in 2005 there were three boating accidents on Tims Ford Lake, compared to 22 accidents on Chickamauga Lake, which was the worst in the state. In 2004, there were 12 reported accidents on Tims Ford Lake, and three were reported in 2003, Tennessee Wildlife Resource Agency records show.

Businesses brought in from the high-dollar communities also need water, sewers and improved roads, which cost money, officials said.More growth overall is taxing communities, officials said.

From July 2003 to July 2004, Loudon County deputies were called out 19,437 times, said Loudon County Sheriff Tim Guider. Calls increased to 21,055 the next year, he said. From July 2005 to July 2006, deputies were called out 21,266 times, he said. "We’re seeing just a continual increase," Sheriff Guider said.

Franklin County Sheriff Tim Fuller said there has been a slight increase in property thefts in the county because a lot of the homes are occupied on a seasonal basis. There also is increased traffic on the roads, especially during the weekends and summer months, he said.

Edward Headlee, director of Loudon County schools, said a recent study showed more schools are needed.

The county also is in the process of passing a tax on new homes that will go toward building schools, which officials said might slow growth.

E-mail Cliff Hightower at

EMINENT DOMAIN HISTORY In 1967, work began on Tellico Dam. During the 1960s and 1970s, farmers who owned the land around what is now Tellico Reservoir were offered buyouts by the federal government. Some farmers refused to sell and forcibly were moved from the area. In 1979, construction was completed on the dam.

In the 1980s, the Tennessee Valley Authority formed the Tellico Reservoir Development Agency to manage the land around the reservoir and find potential buyers to help develop the area. Source: Chattanooga Times Free Press archives