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Tallan, Krystal buildings soldLife Care Centers founder Forrest Preston buys downtown landmarks
Chattanooga is regressive. I'd be the last one to advise anyone to do business in Chattanooga.
Tallan Financial Center
The 12-story building, constructed in 1982, has 148,000 leasable square feet, a 640-space parking garage and three elevators.* Krystal BuildingThe 10-story office building was raised in 1979. It has 135,000 leasable square feet, parking and three elevators.Source: Luken Holdings
Two of downtown Chattanooga's most high-powered office buildings have a new owner, with the buyer and the seller offering two opposite views of the central city.
The Tallan Financial Center and the Krystal Building, located next to one another at M.L. King Boulevard between Carter and Broad streets, were sold by Chattanooga businessman Henry Luken to a company held by Cleveland, Tenn., nursing home operator Forrest Preston.
Also included in the deal was the Riverside Business Center on Amnicola Highway, the two said.
The assets are included in Stone Fort Land Co., which Preston acquired. He said Stone Fort is one of Tennessee's oldest corporations, dating to 1886.
The purchase price wasn't announced.
Preston, founder of Life Care Centers of America, said he believes in downtown.
"I do think the best is coming to downtown Chattanooga," he said. "My associates and I are proud to have the opportunity to become involved with these historic properties in the heart of Chattanooga's central business district."
Luken, who had bought Stone Fort and the buildings from now U.S. Sen. Bob Corker in 2006, criticized Chattanooga's and Hamilton County's business environment, citing high taxes among other issues.
"Chattanooga is regressive," he said. "I'd be the last one to advise anyone to do business in Chattanooga."
Luken, who has a wide variety of business interests ranging from television to yacht building, also was critical of the leadership of Chattanooga Mayor Andy Berke, who was re-elected Tuesday to a second term.
"I'm tired of all of them," said Luken. "God bless Chattanooga. It needs all the help it can get. I'd never tell anybody this is a good place to invest."
Berke, however, said the city hasn't raised taxes since 2010 and that was by a previous mayor.
He said downtown has seen "a tremendous amount of investment. Many investors see a great opportunity. I talk to business owners on a daily basis. They tell me they're seeing unparalleled investment in our city. That's encouraging."
Mayor Berke said Luken "needs to make the business decisions that are right for him. We meet with people every day who think Chattanooga is a tremendous place on the rise and I think they're right."
In its year-end report for 2016 released Wednesday, River City Co. estimates there is nearly $1 billion of new residential, commercial and medical construction projects under development or now being built in the downtown area.
"There are construction cranes and barrels throughout downtown." said Kim White, president of River City Co. "As we end 2016, we are closing in on $1 billion in construction projects and private investment, a staggering number for a city our size."
Luken cited a disappointing return on his real estate investments in Hamilton County and said he's looking at putting his capital in nearby counties.
"I'm opting to take the money and let someone else deal with this who is more tolerant," he said.
Luken, who said Preston is a business associate in a television venture, added that he's redeploying his money into areas "affecting Forrest and myself."
The Tallan and Krystal buildings hold some of the most recognizable business names in Chattanooga, such as Merrill Lynch, Bank of America and UBS.
But the buildings have lost some high-profile companies in recent years, such as the Chambliss law firm, accountants Elliott Davis Decosimo and the headquarters of Krystal Co.
Preston, who Forbes has recognized as one of the richest people in Tennessee, said there's space available in the two downtown buildings bought by his Union Square Development LLC. But, he said, the deal doesn't involve with Life Care's operations.
Preston also said there are "improvement opportunities" related to the buildings for new tenants, but didn't provide details. He said the transaction includes associated parking lots and a garage.
"We are committed to working with our current and future tenants as well as local government and business leaders to ensure that these buildings remain the heart of the next generation of business development," he said.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.