Chattanooga: Hotelier bets city needs more rooms

A Georgia hotel development group is betting $20 million-plus that Chattanooga can support more hotels.

“This city needs more hotels,” said Ben Parker, principal partner in Performance Hospitality Group, which plans to renovate the Maclellan Building into Hotel Indigo. “It’s growing fast.”

Vision Hospitality has planned to build a $19 million, 140-room Hampton Inn & Suites at Fourth and Chestnut streets at the current site of the Chattanooga Regional History Museum, which has looked at moving to First and Market streets. Vision also is building a Holiday Inn on M.L. King Boulevard at the foot of Cameron Hill.

Performance Hospitality is scheduled today to buy the 12-story Maclellan Building, at 721 Broad St., from Luken Holdings. The hotel company will start renovations in August, Mr. Parker said, and is scheduled to reopen Maclellan in September, the building’s 85th anniversary, he said.

Mr. Parker and his partners on Tuesday night asked the Chattanooga City Council to approve a lease-purchase contract on a nearby five-story building at 730 Chestnut St., which the city owns.

The council agreed.

The ground floor would become a retail space, while four floors would be used for concierge hotel parking, Mr. Parker said.

Gainesville, Ga.-based Performance Hospitality in the past year has converted three structures to the Hyatt brand in Fort Lauderdale Plantation, Fla., Duluth, Ga., and Bentonville, Ark., said partner Brad Rahinsky. And, 13 months ago the chain opened a Hilton in Buford, S.C.

“Hotel Indigo is different from other brands,” Mr. Parker said. “Maclellan is a magnificent structure. Our goal is to release its natural assets.”

Performance Hospitality Group is working with designers to create a color and decorating scheme for the Maclellan Building, Mr. Parker said, using the structure’s unique layout. For example, the building has 590 windows, so every guest room will have ample natural lighting, he said. And, the penthouse level will have a couple of suites and a concierge lounge, he said.

The hotel will have about 120 rooms, Mr. Parker said.

Indigo is a brand of InterContinental Hotels Group, which owns Holiday Inn, and is the nation’s first boutique hotel chain, Mr. Parker said. Indigo will participate in InterContinental’s customer loyalty program, Mr. Rahinsky said.

Indigo started in 2004 targeting Generations X and Y, but now appeals to families with children and young professional as well, Mr. Rahinsky said. The concept uses “hip” designs without going overboard, he said.