Two groups with ties to Chattanooga council members received federal pandemic funds

Two Chattanooga City Council members have personal connections to organizations that received federal pandemic relief dollars as part of a $30 million spending plan the panel authorized last year.

Both representatives — Councilwoman Demetrus Coonrod, of Eastdale, and Council Vice Chairwoman Raquetta Dotley, of East Lake — spoke up during the meeting July 26 to abstain from considering those specific items. The council considered the 30 individual funding agreements as a package on a roll call vote, meaning each council member was called on individually.

Dotley is the executive director of the Net Resource Foundation, a group receiving $250,000 from the city to revitalize the Alton Park community and business district. Coonrod’s fiance, Anthony Gladden, is the founder of the Kingship Chess Group, which will collect $150,000 to organize a youth mentorship program.

Gladden told the Chattanooga Times Free Press in a phone call that his relationship with Coonrod did not result in his organization receiving funds from the city.

“If you go back and ask the city of Chattanooga, I am an excellent grant writer,” he said. “It had nothing to do with who I know.”

Likewise, Coonrod said by phone that she did not play a role in her fiance’s organization receiving federal dollars from the city.

“I put it on public record that, because of that, I was not voting on the item,” she said. “I recused myself from the vote. … In fact, he never disclosed to me that he was working on it.”

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Coonrod said she keeps her responsibilities on council separate from her relationship with Gladden, who she’s known since the third grade.

“There’s nothing that says that an organization or nonprofit can’t apply for funding because you’re related to a council person or you know somebody,” Coonrod said. “If that’s the case, nobody in Chattanooga would be able to because we know all kinds of people.”

Dotley said in a text message that she had no comment.

Billions of dollars worth of one-time federal funding have been distributed to local governments through the American Rescue Plan Act, a pandemic relief package passed by Democrats in Congress in March 2021. The city of Chattanooga received $38.6 million — $30 million of which was distributed to local organizations as part of a spending plan Mayor Tim Kelly brought to the City Council last summer.

The city has used the remaining $8.6 million on emergency response items like food bank funding and an eviction prevention initiative. That money also went toward the purchase of the Airport Inn, a former motel that the city bought in 2021 for almost $2.8 million and plans to convert into permanent supportive housing.

Kelly’s Chief of Staff, Joda Thongnopnua, said that individual council members did not play a role in selecting organizations shortlisted for funding.

“They weren’t involved in the scoring process, the selection process at all,” Thongnopnua said by phone. “The only time they would have had an opportunity to participate was in the same public process that everybody else did.”

NET RESOURCE

The Net Resource Foundation intends to use the dollars it receives from the city to support the transformation of “an unsightly building” at 618 W. 38th St. into “a thriving coffee shop and bistro” that would serve as a congregating place for the neighborhood and travelers, according to a funding application it wrote to the city last year.

Board President Paul Middlebrooks was listed as the primary contact. Middlebrooks also signed the organization’s funding agreement with the city of Chattanooga.

“The property will be rehabilitated, both externally and internally, into a modern-looking multi-purpose venue,” the application states. “The community investment project will become a catalyst for business growth in the area.”

Aside from serving food and offering international roasted coffee, the application states, the shop would also act as a rotating incubator for new chefs, would serve as a hub for minority entrepreneurs to receive technical training and assistance on developing new businesses, and would be available as a community event space after hours and on weekends.

The organization estimated in its application that the project would cost $460,000 and was initially requesting $350,000 from the city. That funding would be dedicated to building design, leasehold improvements, equipment and furniture purchases, working capital and opening inventory. The organization said it aimed to open the new business in the fourth quarter of 2024.

“The project will address the negative economic impact caused by lack of public and private investment in Alton Park and offer a sustainable and positive option for people who live in the area,” the application states. “The revitalization of the corner location — the heart of the community — will create pride in the neighborhood, jumpstart the development of retail businesses along this former African American commercial corridor, and support ongoing housing and population growth in the area.

“In addition, by implementing this much-needed investment, other investors will be attracted to Alton Park, fueling a sustainable and positive economic impact to members of the community.”

The Net Resource Foundation is a tax-exempt charity organized under Internal Revenue Code Section 501(c)(3). In exchange for tax-exempt status, such groups are required to meet certain transparency requirements, such as making their annual tax returns, filed on Form 990, available for public inspection.

According to listings on the IRS website, the Net Resource Foundation filed 990 forms in 2016, 2017 and 2018. In 2018, the organization listed $54,526 in total revenue. The organization had $109,968 in revenue in fiscal year 2020, according to ProPublica’s online 990 search tool.

The Times Free Press asked Dotley by text for more recent 990 forms and requested copies. The paper did not receive a response.

The Net Resource Foundation, which has been allocated $250,000, has not yet started spending the ARPA funding it has received from the city. As a result, it has not submitted spending reports for October through December of 2022.

KINGSHIP CHESS

Kingship Chess Group initially sought $200,900 from the city, its application states, with the goal of enriching 50-70 children and teens every fiscal quarter through the game of chess.

Additionally, the organization said it would serve 40-55 senior citizens each fiscal quarter with the idea of using chess as a way to combat first-stage dementia and Alzheimer’s disease. The application said Kingship Chess Group would visit a minimum of two assisted living facilities daily.

Students would participate in early morning chess classes Monday through Friday, the application stated. Opportunities would also be available after school. On the weekends, the organization said it would host “chess pop-ups” in underserved communities and offer educational opportunities in multiple recreation centers.

A schedule included in the application showed that Kingship Chess Group planned to hold a series of open weekly meetups, instructional opportunities for seniors and multiple other events over the course of the grant cycle.

Asked in the application how the project would help close public health and safety gaps for the city’s Black and Latin American communities, Gladden wrote that chess improves cognitive skills, self-confidence, attention span and boosts memory capacity.

“Chess is about making strong moves and sticking by them,” the application states. “In life too, if we plan to do something, we need to make sure to stand our ground and fight for what we think is better for us. When there is a problem or a threat in chess, we sometimes need to be aggressive and take action.”

Gladden said the nonprofit Kingship Chess Group is separate from the Kingship Chess Academy, which offers fee-for-service chess lessons and camps on its website.

According to the Tennessee Secretary of State’s office, Kingship Chess Group filed as a nonprofit in June 2021 and was administratively dissolved in August 2022 after failing to file an annual report to the state on time. The Kingship Chess Group was reinstated in October and entered into an agreement with the city of Chattanooga for its pandemic relief funding in November.

Kingship Chess Group has been authorized to receive $150,000 in pandemic stimulus funding from Chattanooga and has so far spent $23,540 through December 2022, according to records provided by the city.

Of that, $15,538 has been compensation for Gladden, billed at $37.44 per hour. Bonner Consulting Services in Chattanooga received $8,000 to provide accounting for the the federal funds. Kingship Chess Group’s total contract budget sets aside $116,000 in personnel costs between July 1, 2022, and Dec. 31, 2024, according to city records.

DISTRIBUTION

In January 2022, the city formed a group called the Equitable Recovery Commission to establish a set of priorities for how to distribute its federal pandemic stimulus dollars. Boosting economic growth in the Black community ended up being the city’s primary objective.

In service of that goal, the 12-member group recommended the city fund projects that would improve access to housing, close public health gaps, build a competitive regional economy and create a path to early learning and child care.

The commission said in an April 2022 report that African Americans in Hamilton County were the most disproportionately impacted by the pandemic. Even before the outbreak, Black people already faced a higher mortality rate than white people for chronic ailments like kidney disease and diabetes that could intensify the severity of a COVID-19 infection.

“Decades of racially biased divestment in neighborhoods has created a city where long-term social, economic and health outcomes can nearly be predicted by the ZIP code one is born into and the color of your skin,” the report states.

The city ultimately received more than 200 requests for funding totaling about $200 million through its application process, Thongnopnau said. Chattanooga was able to spread its $30 million allocation across roughly a third of the overall applications by combining and reducing certain requests.

The committee that scored applications was comprised solely of the mayor’s senior staff. Thongnopnua said they judged requests based on how well they aligned with the goals set by the Equitable Recovery Commission, the potential impact of the city’s investment and how prepared the organization was to receive federal funding.

“HIGH RISK”

Since last year, the city has been working with consultant UHY to help it meet federal guidelines associated with the use of this funding. After the council approved the funding, UHY completed a risk assessment of those organizations. It classified seven out of 27 recipients as high risk, including both the Net Resource Foundation and Kingship Chess Group.

The other organizations that fell into that category were the Community Foundation, the Community Haven, First Baptist Cares, Reach One Teach One and World Changers. Among the organizations assessed, 13 were considered low risk and seven medium risk.

Jack Reagan, managing director at UHY Advisors, said the firm based that assessment on the amount of experience organizations had managing federal, state or private grants and whether they’ve previously worked with the city. The consultant was trying to determine if organizations were used to running programs using funds that had strings attached, he said.

Thongnopnua said UHY’s determination was based on whether organizations have previously received federal dollars and if they have the capacity to handle the scale of funding sought. Thongnopnua added that groups considered high risk will simply need extra support on the front end to ensure they are ready to receive those dollars.

In an email, the mayor’s director of special projects, Ellis Smith, said the risk assessment was pulled directly from federal monitoring guidelines, which automatically place organizations that have never received federal funds before into a higher risk category.

For all moderate- and high-risk recipients, additional support will include training, technical assistance and monitoring. In June, the city and UHY will also do on-site reviews with all recipients regardless of the risk category.

The mayor’s objective from the very beginning, Smith said, was to invest the money with vulernable communities that were disproportionately affected by COVID-19.

“The goal was not to solely fund those who had previously received federal funding,” Smith said, “but rather to use these one-time funds to help bridge the gaps in our community, which are often found where funding has been absent in the past.”

Reagan, who is working with 20 other governments across the nation on these funds, said conflicts of interest are always a thorny question, but the city of Chattanooga has adequately addressed any potential conflicts.

“Conflicts of interest aren’t inherently bad or wrong or nefarious,” he said. “It’s just that they have to be very, very transparently disclosed to everybody so that they know that things were done at an arm’s length and followed in the normal course of business and there wasn’t any preferential treatment given to anybody.”

Contact David Floyd at dfloyd@timesfreepress.com or 423-757-6249.

    Staff photo by Matt Hamilton / City Council Vice Chairwoman Raquetta Dotley speaks during a re-opening event for the East Lake Community Center on Jan. 29.