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An Alabama developer hopes to break into the Chattanooga housing market with a nearly 250-unit apartment complex on Highway 58.
Arlington Properties, a development and property management company based in Birmingham, Ala., expects to spend more than $20 million on the proposed complex. The Chattanooga-Hamilton County Regional Planning Agency approved the company's request to rezone the almost 4-acre site at the intersection of Highway 58 and North Hickory Valley Road this week.
The apartment complex will include either 10 or 11 buildings and 242 to 264 units, said Mark Stuermann, a vice president at Arlington Properties. He added that the final count most likely will be closer to 242 and will include one-, two- and three-bedroom apartments.
Chattanooga is the right-sized market for the family owned business to build, he said.
"We like places like Chattanooga," he said. "We don't do business in really big cities. With this site, we're close to an important job center with Volkswagen and Amazon right around the corner. We're on a major highway. There's a lot of positive things about this market."
The units will rent for $750 to $1,350 a month, he said. The company hopes to break ground this year, and construction will take about 18 months.
The project is in the very early stages, but Stuermann expects that the buildings will be three-story, hardy plank structures and the complex will include a clubhouse and a pool.
In general, now is a good time to build because the rent market is strong, Stuermann said.
"Since the downturn there's been a change in the way people think about renting," he said. "Most people either have been affected by housing or job loss or know someone who was affected and that's still in the back of people's minds. People who might have rented an apartment for 12 months are now renting for 36 or 48 months."
And Chattanooga's apartment market is hot, too. The Scenic City's rent prices have risen by 20 percent to 30 percent in the last three or four years, according to Times Free Press archives, and hundreds of new units are in the pipeline.
Stuermann said the Highway 58 apartment complex could be the first of multiple projects the development company builds in the Chattanooga region. Hamilton County Mayor Jim Coppinger said he's not surprised by the large-scale project.
"As far as the future growth goes in Hamilton County, what we've seen -- and I expect it to continue -- is growth in that area of Highway 58, in the Ootewah/Apison area and also in the Soddy-Daisy area," he said. "It's spread across the northern end of the county."
He cited the county's tax rate, work force and quality of life as factors that attract businesses, which in turn attract housing developers.
"We have created a very business-friendly environment," he said. "And I think the word's out that we're doing that."
A few miles up the road from Arlington Properties' proposed apartment complex, developer Bill Fine is hoping to build a retail shopping center. The county site was rezoned to commercial this week.
River City Reality's Scott Short, who's representing Fine, couldn't give many details about the project because the planning has only just started, but he said the Highway 58 corridor has tremendous potential.
"We believe in the progress that's being made out there and that there's more to come," Short said. "We truly feel that's going to be one of the next growth areas of Hamilton County."
Contact staff writer Shelly Bradbury at email@example.com or 423-757-6525.