Luken Holdings plans to buy the Tivoli Center office building as part of the downtown Chattanooga real estate shuffle created by BlueCross BlueShield’s Cameron Hill project, an executive said Monday.
“This block will be dramatically different,” said Kim White, president and chief executive of Luken Holdings, controlled by Chattanooga real estate and telecom tycoon Henry Luken.
Luken Holdings has a contract to buy the Tivoli Center from Tivoli Center Partners for an undisclosed price on or before July 2009, when BlueCross will be leaving the building for Cameron Hill, she said. Luken already is looking to lease BlueCross’ space on several floors, she said.
The Tivoli Center, at Broad and Seventh streets, is a separate property from the city-owned Tivoli Theatre.
In another downtown real estate deal, Luken Holdings on Wednesday will sell the 12-story Maclellan Building at 721 Broad St. to hotelier Ben Parker, Ms. White said.
Yacoubian Tailors is to move from its current home in the Maclellan Building to the Tivoli Center, an official says.
Mr. Parker, of Performance Hospitality Group, said he plans to convert the historic building into a boutique hotel.
Mr. Parker, who will discuss his plans before the Chattanooga City Council tonight, said he plans to spend upwards of $20 million on the building and a renovation of the structure, which was built in 1924 for Provident. The building is on the National Register of Historic Places, Mr. Parker said.
As part of the two transactions, Yacoubian Tailors is moving from its current home in the Maclellan Building to the Tivoli Center, Ms. White said. Luken is trying to arrange for Yacoubian to move by the end of the year so it can build out its new space.
Yacoubian will own the 5,000 to 7,000 square foot space fronting Broad Street, she said.
Luken Holdings will move its headquarters from 735 Broad St. to the remainder of the Tivoli Center’s first floor, Ms. White said.
Mr. Parker, of Gainesville, Ga., said he plans to open a franchise of Hotel Indigo, which is the nation’s first branded boutique hotel. Indigo is part of the InterContinental Hotels Group, which owns Holiday Inn and Staybridge Suites. The upscale hotel would have about 120 rooms.
Hotel Indigo combines the consistency of a branded hotel with the design and uniqueness of a boutique hotel, according to the company’s Web site. The chain has 14 locations and 54 hotels under development.
Mr. Parker said he will ask the City Council to approve a lease-purchase contract on a nearby five-story building at 730 Chestnut St., which the city owns. Mr. Parker would use the ground floor for retail uses and possibly restaurants, he said.
Four floors would be for valet parking for hotel guests using a car lift, and would not be open to the public, he said. The top floor would initially be used to train hotel staff, he said, and later could be adapted to another use such as meeting space.
“Over the decades the Maclellan has become obsolete as an office building primarily due to parking constraints,” Mr. Parker said. “To put this money into it, we need to know long term that we control the parking adjacent to our facilities.”