Walk2Campus, a South Carolina-based college housing developer, is planning to add two new downtown apartment buildings to its Chattanooga portfolio if a city agency agrees Friday to grant property tax breaks for the planned developments.
Walk2Campus under the project name UTC Five, LLC plans to spend $7.9 million and build a pair of four-story buildings at 500 Lindsay St., which sits at the intersection with East Fifth Street. One of the proposed buildings will sit right on the corner and be about 42,000 square feet. The other will sit farther in the 0.7-acre lot and be about 12,000 square feet.
The buildings will have brick and Hardieboard facades, and between the two buildings is a proposed 28-space parking lot. The Fifth and Lindsay streets sidewalks immediately surrounding the development will be redone with street light and tree additions.
The two apartment buildings will contain 64 new units altogether. One- and two-bedroom units will make up 48 of the proposed apartments, with 24 proposed units each. Efficiency apartments will make up the remaining 16 units.
The average one-bedroom apartment will be 555 square feet and cost $835 a month. The average two-bedroom will be 788 square feet and cost $1,200 a month. The average efficiency apartment will be 420 square feet and cost $750 a month.
Walk2Campus currently owns and operates eight other properties in Chattanooga, serving primarily University of Tennessee at Chattanooga students.
In 2012, the company bought and repurposed the Francis Willard Building at 615 Lindsay St. and created about 50 homes. The company's Chattanooga office is adjacent to that property, at 605 Lindsay St.
According to its application to the Chattanooga Health and Education Facilities Board, Walk2Campus has already invested more than $10 million in Chattanooga and currently has 185 local tenants.
Company leaders were reluctant to say much about the proposed new housing on Wednesday, two days before the upcoming meeting of the city board that approves property tax breaks for new projects.
Roe Elam, marketing manager at Walk2Campus, only hinted at the importance of the potential tax breaks, saying "city leaders have correctly identified that in order to create a truly vibrant downtown, you need more people living downtown."
"And obviously it has been a challenge for the private sector to build in the urban core," he said in an email.
Elam said granting a break on the taxes charged on the new property investment "is a great tool to help spur investment."
The proposed tax agreement for Walk2Campus would freeze most property taxes on the new project for 10 years. Walk2Campus would pay school taxes and only a portion of the regular property taxes charged to other similar properties.
At the end of the 10 years, the proposed Lindsay Street apartments' agreement also includes a four year phase-in period, in which Walk2Campus would pay an additional 20 percent of its new property taxes each year for four years.
To qualify for the tax breaks, new downtown housing developments must offer 20 percent of their units at affordable rates for moderate- to low-income residents.
A quarter of the proposed Lindsay Street apartments fall in the affordable echelon, according to the developer's application to the city.
The new downtown residential tax incentive program adopted by the Chattanooga City Council in August provides tax breaks for housing projects that house residents who make 80 percent or less of the area median income.
Construction on the new Walk2Campus apartments is slated to start in March, though it's unclear how or if the board decisions Friday will affect that schedule.
River City Co., the downtown agency pushing for more downtown housing, has recommended approval of the Walk2Campus plan. The city's Health, Educational and Housing Facility Board will hear the case at noon Friday in the City Council chamber at 1000 Lindsay St.
Contact staff writer Alex Green at agreen@timesfreepress.com or 423-757-6480.