The Chattanooga Area Regional Transportation Authority and the town of Lookout Mountain, Tennessee, have reached an agreement to resolve a dispute over how the Incline Railway should be fairly operated.

CARTA, the city's public transit agency, owns the Incline and relies on revenue from the attraction to fund its other services. The agency had set aside $300,000 to challenge an ordinance being considered by Lookout Mountain commissioners that would have placed a new fee on tickets, along with restrictions on the Incline's passengers and operating hours.

The pair avoided a legal fight with an agreement that includes a new public safety fee and limitations on daily passengers and operating hours for the 130-year-old funicular railway. They announced the agreement on Wednesday, saying it went into effect Tuesday.

The town agreed not to pass the ordinance under the terms of the agreement. Commissioners had passed the ordinance on a first reading, but not a second reading needed for it to go into effect.

CARTA's main concession to the town of Lookout Mountain is a new public safety fee that will support Lookout Mountain's emergency services related to the Incline's operations. The railway attracted 212,000 visitors and generated more than $4 million in direct revenue for CARTA in 2024. The ride was closed for half of 2025 because of a fire in late 2024.

The public safety fee changes based on how many tickets CARTA sells in a year, according to a copy of the agreement obtained by the Chattanooga Times Free Press:

• One to 100,000 tickets: $0.30 per ticket
• 100,001 to 300,000 tickets: $0.60 per ticket
• 300,001 or more tickets: $1 per ticket

If CARTA increases its ticket prices, then the public safety fees will increase accordingly. The base ticket price in the agreement is $24.99 for adults and $12.99 for children.

CARTA agreed to limit daily passengers to 2,000 and to limit its operating hours to 8:30 a.m. to 9 p.m. The agency reserved the right to operate railcars until 10 p.m. to bring passengers down the mountain.

"The hours allowable don't necessarily dictate the hours we are open," Scott Wilson, chief of staff at CARTA, said in an email. "In offseason, we may close earlier."

CARTA will provide 12 resident passes that can be checked out by Lookout Mountain residents for a free ride and will not count toward the daily passenger total.

Less restricted

The terms of the new agreement are less severe for CARTA than the ordinance the town had considered, which would have:

• Placed a $1 fee on every ticket, and the fee would have increased 3% each year
• Fined CARTA $50 for each passenger it did not disclose
• Capped the daily passenger total at 500 people
• Reduced operating hours to 10 a.m.-4 p.m. on weekdays and 10 a.m.-6 p.m. on weekends

CARTA leaders described the ordinance as an existential threat to the Incline. CARTA CEO Charles Frazier celebrated the new agreement.

"This agreement demonstrates what can happen when two organizations stop focusing on their positions long enough to understand each other's interests," Frazier in a press release. "The town needs the resources to provide excellent public-safety services to its residents and the hundreds of thousands of people who visit Lookout Mountain. CARTA needs the ability to operate, invest in and thoughtfully improve a historic asset that belongs, in many ways, to this entire region."

The town has around 2,000 residents and 900 homes, with limited emergency services. The agreement comes after a series of fires required large-scale responses from firefighters.

The Incline shut down for months after a brush fire in December 2024 damaged the tracks. The Chattanooga Fire Department responded in July 2025 to another fire near the tracks, avoiding further damage to the ride.

"This agreement gives us a framework to work together — not just on today's issues, but on opportunities for the future," Jim Bentley, police and fire commissioner for Lookout Mountain, said in the release.

The initial term of the agreement is for six years, expiring on Dec. 31, 2032, with an automatic six-year extension unless either party terminates the agreement. The Incline has been operating since 1887, predating the town's zoning regulations, according to the agreement.

Incline's future

CARTA agreed to pay an increased public safety fee after the town passed regulations to allow for expanded future commercial uses of the Incline's upper station. The transit agency is studying ways to renovate and expand the Incline to attract more visitors.

If and when the town and CARTA collaboratively pass regulations for the Incline's future, CARTA agreed to pay a higher public safety fee:

• One to 100,000 tickets: $0.50 per ticket
• 100,001 to 300,000 tickets: $0.80 per ticket
• 300,001 or more tickets: $2 per ticket

CARTA is a tax-exempt government entity, but it pays a "privilege tax" to the town equal to the Tennessee sales tax rate on tickets sold at the upper station within the town's limits.

The dispute over the Incline's future expansion mirrors another debate happening on the other side of the mountain in Lookout Mountain, Georgia.

Rock City, the 94-year-old rock gardens attraction, wants to build a gondola lift up Lookout Mountain, but has faced strong opposition from some residents.

The City Council in Lookout Mountain, Georgia, is preparing to vote on an ordinance change that would allow Rock City to build part of the ride within the town's limits.

At question in both cases is the residential versus tourist nature of Lookout Mountain. CARTA leaders have said the gondola could complement the Incline Railway, even as both attractions would lift visitors up the same side of the mountain.

© 2026 the Chattanooga Times/Free Press (Chattanooga, Tenn.). Visit www.timesfreepress.com.
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