Loudon City Council unanimously agreed Oct. 25 to amend the city’s zoning ordinance to add a new Small Planned Development District.

The new district could be used for a $40 million development proposed by Dover Signature Properties on city-owned waterfront property downtown. The district would apply to sites less than 50 acres.

Councilman Tim Dixon and Councilwoman Tammi Bivens motioned and seconded, respectively, to approve first reading of the new district. The vote passed 5-0. A second and final reading is planned for Nov. 22.

The proposed amendment was unanimously recommended Oct. 6 by the City of Loudon Regional Planning Commission and would complement the existing planned development district.

There were a few minor edits between an Oct. 11 workshop and Monday’s meeting, Ty Ross, Loudon city manager, said. A minimum acreage threshold was added so that districts would have to be at least three acres. The word “overlay” was also removed because it could be confused with historic overlay, Ross said.

“This would be its own unique district,” Ross said.

The proposed waterfront development could have 270 new residential units, walking trails and commercial space.

“One of the many justifications for the SPDD amendment is it provides the planning commission the flexibility to consider developments like the one Dover Signature Properties proposes downtown on the lakefront without the constraints of the PDD, which would require a development more in the size and scope of Tennessee National,” Ross said in an Oct. 8 memo to Harris and council.

Lakeshore Loudon would be on 15 acres on both sides of the Highway 11 bridge over the Tennessee River. The development could have a mix of rental townhomes, apartments and houses, along with commercial space such as a coffee shop, hair salons and water sports. A playground, walking trails and green space could also be available.

“Right now, our zoning code does not contemplate that kind of development,” Kris Frye, city attorney, said during the Oct. 11 workshop.

The proposed amendment has requirements for minimum site sizes, limits on building heights and requirements for landscaping, open space and parking. The amendment has a process outlined for plan preparation and review and would allow staged development, although the stages and expected development periods would have to be shown on the preliminary plan.

Rick Dover, Dover Signature Properties president, has said construction of Lakeshore Loudon could start early next year. There are still steps to complete before then, including the zoning change, land transfer and master plan approval. Loudon’s Industrial Development Board will also be involved in the project.

In other business, Loudon City Council:

• Unanimously approved a new beer ordinance that “gives the beer board the tools that they need to permit or not permit” businesses in town, Frye said.

• Awarded a bid for on-call asphalt resurfacing to Lee Utility Construction Inc., to catch up on a backlog of repairs.

• Approved a fuel bid for $21,876 from Sweetwater Valley Oil Company.

• Amended the 2021-22 fiscal year budget to add laborers for the facilities and maintenance department, a police department camera system, a fire department grant, and concrete planters and water tower under contract with VanhooseCo.

• Authorized the annual City of Loudon Fire and Police Turkey Shoot for Nov. 6, 13 and 20.