City center seeing new life, but some worry about parking, panhandling, rents

City center seeing new life, but some worry about parking, panhandling, rents

September 17th, 2017 by Mike Pare in Business Diary

A new apartment building at 728 Market Street is seen on Thursday, Sept. 7, 2017, in Chattanooga, Tenn. The nearly-completed building will house 125 residential units.

Photo by Doug Strickland /Times Free Press.

Gallery: City center seeing new lifeBut some worry about parking, panhandling, rents

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“We like the energy, the evolution and the population of downtown.”
Boyd Simpson, CEO of The Simpson Organization

Chattanooga's central business district, long viewed by many as lagging the rest of downtown's renaissance, is slated to see two of the largest pieces in its revival coming online next month.

But some business people still worry about problems in the area from parking, panhandling and increasing rents.

The Westin hotel is scheduled to open next month at M.L. King Boulevard and Pine Street, offering 260 rooms as part of an $88 million investment.

Also, Market City Center, a $30 million, 10-story building on the 700 block of Market Street, will begin moving people into its 125 apartments and open a new restaurant in October.

"We like the energy, the evolution and the population of downtown," said Boyd Simpson, head of the Atlanta-based group that developed the new apartment building which is the tallest structure raised in that part of the central city in nearly 50 years.

For decades, the central business district was slow to join in downtown's new life. A portion of the 700 block of Market remained vacant for more than a decade as an example of the difficulty of making redevelopment projects work in downtown's core amid parking and other challenges.

Over a decade and a half ago, downtown nonprofit redeveloper River City Co. bought much of the east side of the block with plans to reinvigorate a group of aging and mostly vacant buildings.

But little happened at the site. A private developer finally offered a plan for new condominiums and tore down the buildings, though work never started. River City went to court, regained control of the property, and then sold it to The Simpson Organization in 2015.

"We think [downtown] is changing in positive ways," Simpson said. "Most of that is pretty obvious."

Kim White, who heads River City, said The Simpson Organization came in with "a very big vision."

While parking was challenging, Simpson's group also owns the SunTrust Bank Building next door and leveraged some of the spaces in its garage for Market City Center.

"It was a natural fit," White said.

The Market Street building also will hold 42,000 square feet of commercial, retail and restaurant space, including a new eatery called Bantam & Biddy.

Jim Williamson, River City's vice president of planning and development, said he thinks that additional restaurant space in the building will lease up "in no time."

"The office is a very unique product," he said, adding that it's all on one floor. "Most towers offer much smaller floor plates."

Westin hotel readies to open

A few blocks away at the gold-windowed Westin site, final work is underway for an October opening of the new hotel, said Richard Pauley, marketing and sales director for the property.

"We're still working on an exact date," he said.

The DeFoor Brothers, who developed the Embassy Suites hotel in East Brainerd, bought the former headquarters of BlueCross BlueShield of Tennessee in 2010 and are adding nearby condominiums, a high-end restaurant, office space and other work in a three-block area.

Pauley said the Westin will offer 15,000 square feet of indoor meeting space and that amount outdoors.

"Everything is on track," he said.

In addition to the Westin and Market City Center, Heritage Land and Development Co. of Memphis is bringing 80 apartments to the market in the First Tennessee Bank Building at 701 Market. Also, another 90 apartments are being leased in the Maclellan Building on the 700 block of Broad Street.

With the hotel and new apartments, an estimated 500 to 600 more people are expected to be spending their nights in the central business district.

Bank building stays vacant

However, another proposed hotel in the central business district has yet to get off the drawing board.

In 2014, AMCA LP, a development group based in Herndon, Va., bought the Chattanooga Bank Building at 736 Broad St. for $4.4 million and later announced plans to turn the 10-story structure into a 150-room Aloft Hotel. But the $31 million project has missed earlier planned construction start dates.

David Smith, senior vice president of builder Russell Construction, said the project is moving ahead while the developers are putting "finishing touches" on financing.

"We hope there will be a time in the very near future to make an announcement of starting the process," he said.

White said the bank building is "the last big piece to get going" in the central business district.

Parking and safety

At the same time, downtown has seen a number of restaurants close in the past year or so, most recently Applebee's at Fourth and Market. Others in and around the central business district include The Henpecked Chicken, World of Beer, and 212 Market.

Wade Crawford, marketing director for Applebee's franchisee Quality Restaurant Concepts, said that parking was "kind of difficult."

Crawford added that while the company has another restaurant concept in its stable, it's not considering bringing it to the Fourth and Market location because it's approaching the end of its lease at the site.

"A lot of times if they're asking too much for the rent, that's when you see the turnover," he said, adding that business tends to be seasonal in downtown.

Josh Patton, owner of the Chicken Salad Chick restaurant at 629 Market St., said that parking and safety are seen as concerns.

Parking costs at surface lots and garages are too high, he said. While River City has commissioned a parking study with results slated to come out soon, he's hopeful cost will be addressed.

In Knoxville, where he's thinking of opening a restaurant, a city parking garage at the popular Market Square area downtown is free after 6 p.m. and all day Saturday and Sunday, Patton said. Knoxville officials told him that Chattanooga views parking as a revenue stream while they see it as an economic driver.

Also, Patton said, panhandling is seen by people as a problem downtown.

"I've had a panhandler come into the restaurant and haggle with customers inside," he said. "The other day, a male employee walked a female customer to her car at 5 or 6 p.m. [to] the Regions Bank. Police are not focusing enough on downtown."

Patton also said too many downtown streetlights are out.

The businessman said River City told him that plans are to start a replacement program near the riverfront with the effort working its way back downtown, but that's expected to be a lengthy process.

Williamson of River City said there are various reasons that restaurants close. He said The Henpecked Chicken, which was located next to Applebee's and shut down earlier this summer, didn't give the location enough time.

Also, Williamson said, Chattanoogans appear to embrace locally owned restaurants downtown rather than chains. In addition, Williamson said that parking is often used as an excuse.

"Everyone likes to blame parking," he said, adding that there are lots of other eateries which are successful that have little if any parking.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.