Developer to renovate offices to add downtown housing targeted at UTC students

Developer to renovate offices to add downtown housing targeted at UTC students

December 14th, 2012 by Dave Flessner in Business Around the Region

The property located at 615 Lindsay Street is one of the locations that is slated to be converted into UTC housing.

Photo by Alyson Wright/Times Free Press.

New Apartments

* Frances Willard building at 615 Lindsay Street. The three-story, 24,884-square-foot building was erected in 1928 as a women's home, but the building was last used as offices for lawyers and Green Acres Inc..

* Former women's hospital at 836 McCallie Avenue was built as a women's hospital and clinic in 1945. The 18,046-square-foot building is empty and for sale, but was last used as Pizza Cha Cha and the Ochs Center.

A pair of vacant downtown office buildings will be restored as apartments next year to house up to 90 students at the University of Tennessee at Chattanooga.

Walk2Campus, a Rock Hill, S.C.-based real estate company that has already bought a half dozen downtown apartment structures, plans to spend nearly $4 million to convert both the Francis Willard building on Lindsay Street and the former women's hospital on McCallie Avenue into more rental housing units.

The plans were supported Thursday by Hamilton County commissioners. Next week, the commission is expected to approve a tax-assistance plan for the projects.

"Typically, we spend as much in renovating our buildings as we do buying them because we place great importance in making sure these buildings are brought up to code and their overall appearance is improved," said Roe Elam, market manager for Walk2Campus in Chattanooga.

A real estate partnership organized by Walk2Campus bought the Francis Willard at 615 Lindsay Street this summer for $1.1 million. Elam said the new owners hope to start work in January on a $1.7 million plan to convert the 4-story office building into apartments to house up to 50 students. The same group is also negotiating to buy the former women's hospital at 863 McCallie Avenue with plans for apartments to house another 40 students.

The renovations are part of a plan by Walk2Campus to add more downtown housing for UTC students off campus but within walking distance of UTC classrooms. Chattanooga is the sixth such market for Walk2Campus and the first urban venture for the company, Elam said.

The company already has apartments to house 64 UTC students in downtown Chattanooga.

Kim White, president of the River City Co., appealed to county commissioners Thursday to support the latest apartment plans by supporting a 12-year tax break on the amount invested in improving the properties. Under the plan already endorsed by the Chattanooga City Council, Walk2Campus will continue to pay taxes on the current value of the property, but will pay only the school portion of the property taxes due on any improvements on the two renovated buildings through 2025.

"We're glad that we have a developer who is willing to take underutilized buildings and turn them into apartments," White told the county commission. "We know there is a demand for more downtown housing, but it's been difficult to get enough rental housing in the downtown area."

At the start of its fall term, UTC typically puts several hundred students in temporary facilities, including housing some students at the Chattanooga Choo-Choo. Elam said UTC's enrollment growth and housing patterns suggest there are from 3,000 to 5,000 students who live off campus but not with their parents.

"We want to provide housing close to campus so more of those students can walk to their classes and be more involved in the university," he said.

The apartments will rent to occupants for anywhere from $475 to $625 per month and will be in one, two, three or four-bedroom units, White said.

Hamilton County Commissioner Joe Graham said both students and the county will benefit by the new projects.

"This will allow more students to walk to school and not require that they have a car," he said. "It's also a win for the city and county because we will get nearly $4 million more invested in our downtown and better utilize these buildings."