River City Co. released the latest and largest in a series of plans to bolster downtown housing this week, hyping an ambitious proposal to build as many as 77 apartments on the blighted 700 block of Market Street.
Hot on the heels of its purchase of the downtown Ross Hotel, River City Co. hopes the combination of two simultaneous workforce housing projects in close proximity will attract a developer capable of building the right type of apartments for Chattanooga's growing legion of young professionals.
"If you could put a six-story building downtown with 77 units, that would be pretty awesome right now," said Kim White, president and CEO of the River City Co. "We feel like we've done the homework, and we have the right program to make it work."
Both the 700 block and Ross Hotel projects will add badly-needed housing just seconds away from one of the city's fastest-growing firms, venture incubator Lamp Post Group, which has cited housing and density as one of the greatest impediments to its efforts to bring top tech talent to Chattanooga.
The projects could also tie into Chattanooga Mayor Andy Berke's plan to establish a so-called "innovation district" in the city, though Berke has yet to announce the location of that district.
The 700 block project would include ground floor retail and one parking space for each dwelling, the majority of which would be targeted at professionals making around $33,000 and paying somewhere in the ballpark of $812 per month in rent, White said.
Such inexpensive housing leaves little room for developers to profit from the project, so River City Co. will offer incentives such freezing taxes at the pre-development rate or an offer of investment capital for the final project.
"We know we're going to put a certain number of dollars into that program to make it work," she said.
Incentives could be the key to unlocking the potential of a block that was once called "the greatest impediment to the growth of our downtown" by Mike McGauley, former chairman of the Chattanooga Area Chamber of Commerce.
Previous requests for proposals as well as efforts to develop the property have failed primarily due to a preoccupation with parking garages that would serve the entire area, as plans to develop hundreds of spaces below street level became too expensive to implement.
The loudest failure by far was the heavily-hyped $16 million Mayfair on Market project, which was partially funded with $3.65 million from Fannie Mae that was funneled through Chattanooga Housing Authority. Workers demolished the existing buildings, promising that 18 of the 58 condo units would be affordably priced at under $150,000.
But CHA failed to pay up, diverting some of the money to pay its own operating expenses, and developer Trey Stanley failed to build any of the promised 58 condo units after spending millions of dollars. River City Co. sued to reclaim the property, which Stanley left an eyesore, and the nonprofit has since worked to beautify the vacant lot and allow its use by the community.
The 700 block has more recently transformed into a haven for food trucks and festivals after previous housing projects failed to materialize.
"We did a project with Trey early on and he didn't perform," White said. "Then we did one two years ago trying to figure out how to get 250 parking spaces and housing, but the development community said we can't supply parking for district and make the project work."
But more than one space per unit may not be necessary, White said. Many workers would walk, bike or take the bus to work, while others don't even have cars, she said. And fewer parking spaces bring the cost of the project down, making it more likely that this time, the project will find a developer to carry it forward.
The group's $250,000 study of Chattanooga's downtown instead tasks the city with building the needed parking garages downtown to support the district's growing density, though that effort has yet to make any headway.
"I think we were trying to do too much on this property before, that's the difference between this time and before," White said.
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