$31 million hotel planned for downtown Chattanooga
A landmark downtown Chattanooga high-rise is the latest redevelopment target by builders as the central city sees a flurry of new and planned construction projects.
"Next year is the year of the crane," said Kim White, who heads the downtown nonprofit redevelopment group River City Co.
The vacant Chattanooga Bank Building at Eighth and Market streets is the latest project on the drawing board as an out-of-town development group plans to remake the 10-story building into a 150-room hotel.
The proposed $31 million price tag to renovate the 87-year-old structure would make it one of the most expensive hotels ever in Chattanooga. The seven-story Embassy Suites near Hamilton Place, constructed earlier this decade, cost an estimated $40 million.
"We think it's a good spot," said Robert Lubin, a Virginia businessman and a principal in the development group AMCA LP and general partner of Red Leaf Development. "Chattanooga has a great downtown."
Lubin said he expects the hotel will be affiliated with a name brand, but declined to immediately say which one.
Plans are to start construction next year on the 121,000-square-foot building, he said, with the hotel opening in 2016.
Lubin said that his group, which includes developer David Roos of Indiana, closed on the purchase of the historic building two weeks ago. Two ground-level restaurants are planned as well.
However, the Chattanooga Bank Building has twice been the focus of redevelopment plans in the past five years, and nothing has happened.
In 2009, a 142-room Crowne Plaza hotel and condominiums were proposed by an Atlanta firm. In 2012, a Chattanooga company eyed the structure as a hotel or apartments.
White said the $4.4 million purchase price shows the commitment by the latest development group.
"It's a great sign," she said. "They've got a commitment to keeping the integrity of the building."
White said she understands the group is looking at turning it into "a unique, more boutique brand."
"We need that in downtown," she said.
The developers are using a financing structure involving a program set up by the federal government nearly 25 years ago called the Immigrant Investor Program, or EB-5. It was established to encourage foreigners to invest in the U.S. and create jobs in exchange for a U.S. green card.
AMCA LP is comprised of 20 EB-5 investors as limited partners with Red Leaf Development, according to its website. The 20 investors are contributing $10 million to the Chattanooga project, AMCA said. It said its EB-5 partnership is a diverse one, with investors coming from China, Taiwan and Vietnam.
White said the use of EB-5 for the Chattanooga Bank Building would be a first in the city.
"They use it a lot in California," she said.
White said downtown Chattanooga is seeing an array of current and planned building activity. A new Holiday Inn & Suites is under construction and slated to open in 2015 at 434 Chestnut St. Also, a combination of rental units and retail space is coming to the corner of Market and Main streets.
Nearly across the street from the Chattanooga Bank Building is the vacant 700 block of Market, which White said officials are targeting for redevelopment next year. Also, the former Ross Hotel is to be converted to apartments on Patten Parkway.
A five-story, 90-room upscale boutique hotel is planned near the Walnut Street Bridge by Chattanooga-based Vision Hospitality Group. In addition, more than 90 hotel rooms at the Chattanooga Choo Choo are to be turned into apartments starting early next year.
"We've built a good quality city the past 30 years," White said. "We're reaping the fruit of that hard work."
The news was first reported by Mike Pare from TimesFreePress.com He can be reached at email@example.com or 423-757-6318.
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