A long-delayed downtown Chattanooga apartment complex, the biggest for the central city in a generation if built, was termed more viable than ever on Wednesday.
"Demand has increased," said Dan Johnson, Mayor Ron Littlefield's chief of staff, about the proposed 100-unit, $11 million Walnut Commons.
John Clark, the project's developer, told the Chattanooga Downtown Redevelopment Corp. that the U.S. Department of Housing and Urban Development is close to signing off on guaranteeing a loan package for the project.
Work could start in the spring on the planned five-story structure at Walnut and Second streets, Clark said.
"On the demand side, there are plenty of people looking for a place to live downtown," he said. "We have data that backs that up. We can't wait to be showing it."
Johnson, a member of the city panel that owns the land and picked the development group to build the project, said more people are looking at renting apartments.
He cited the existing housing market in which single-family home sales sharply dropped off along with the economy.
David Hudson, who is working with Clark on the building, agreed that more apartments are needed in the central city.
"We think this is a slam dunk," he said.
The project, which would also hold a new day care center on the ground floor, would be the biggest apartment complex in the area since the 364-unit Cameron Hill Apartments were erected in 1974.
Those apartments since have given way to BlueCross BlueShield of Tennessee's new home office.
Rent for the new apartments could range from $700 to more than $1,000 a month, developers have said.
Walnut Commons was proposed in 2006. But land negotiations, the financial meltdown and delays associated with HUD combined to stall construction on the 1.5-acre tract.
The city panel gave the development group a 35-year lease with the option to purchase the site. The city will receive a portion of the rental income under the deal.