Denis Pellerin

The redevelopers of Warehouse Row have nixed plans for a hotel and will focus on filling the downtown Chattanooga landmark’s office and retail space, an official said Wednesday.

“The capital market is in turmoil,” said Denis Pellerin of the Atlanta firm Pellerin & Salomon, whose company is managing the work at the site. “It’s not a good time do anything substantive in that way.”

Mr. Pellerin said Volkswagen’s plans to build a new plant in Chattanooga has generated a lot of calls from business people seeking office space.

“We’re pretty bullish about that,” he said.

Warehouse Row has 260,000 square feet of office space. About 100,000 square feet is leased, Mr. Pellerin said. Officials expect up to 50,000 more square feet to be leased in the next year and the entire complex to be fully rented out within two years.

Work is under way to reconfigure Lindsay Street and a nearby fountain area into more parking. About 80 more parking spaces will be created, Mr. Pellerin said.

Also, parallel parking will be created on Market Street in front of the buildings, he said.

While Warehouse Row has a parking garage, more on-street parking and spaces near the building make it more accessible, Mr. Pellerin said.

“We’re adding a lot of parking at the front door,” he said.

Mr. Pellerin said that with Cigna HealthCare moving out of Warehouse Row into space in the TVA office complex across Market, the building will have three floors of up to 36,000 square feet for offices.

“We’re talking with some who want to keep all their employees on one floor,” he said. “That’s the feature we want to be selling.”

Mr. Pellerin said a revamp of the food court area is almost done, as is work to create a better entrance from Market Street.

Blue Coast Burrito will open in the next week as the newest tenant in the food court.

Richard Martin, who owns the existing Blue Coast unit off Highway 153 in Hixson, said the second restaurant will be in “a good spot ... based on plans for Warehouse Row’s future and the revitalization of that area.”

Workers have already renovated part of the office space and will redo the office lobby in the north side of the building, upgrade restrooms, landscape the outside and put in new furniture, Mr. Pellerin said.

He said about $1 million has been spent upgrading the facility with plans to spend another $2 million.