Chattanooga Housing Authority returns $50,000 to Lakewood Realty Group

Chattanooga Housing Authority returns $50,000 to Lakewood Realty Group

May 10th, 2014 by Yolanda Putman in Local Regional News

Jim Sattler

Jim Sattler

The Chattanooga Housing Authority has returned $50,000 in earnest money a Chicago-based company put up for what turned out to be a failed bid to purchase the Harriet Tubman public housing site.

CHA officials also said they may do business with Lakewood Realty Group again.

"There is no reason why we wouldn't talk to them in the future," CHA board Vice Chairman Jim Sattler said this week.

Lakewood asked for the money back after learning that CHA sold the 36-acre site to the city.

The board legally could have kept the money, but voted to return it at its April 22 meeting, less than a week after closing on the sale for $2.6 million cash.

Board members and staff wanted to make a "gesture of good faith," said board Chairman Eddie Holmes.

Lakewood sent the $50,000 in fall 2013 and proposed paying CHA $2.8 million in cash for the housing site. But on Jan. 21, the second scheduled closing date, Lakewood didn't have all of the money. It asked for another extension but the CHA board refused, then reopened the bidding process.

Some people said Lakewood raised a red flag when it couldn't come up with the money at the scheduled closing date.

Despite naysayers, Lakewood upped its bid to $3.3 million and resubmitted a proposal, while the city proposed $1 million and 20 acres of land. It wasn't until late in negotiations that the city proposed the $2.6 million cash offer that the board approved.

Board members heard people argue for affordable housing on the site, and Lakewood proposed renovating the existing apartments. But Naveed Minhas, CHA's vice president of development, said the agency agreed with the city that the best use of the land is industrial.

The city's second offer also surpassed the $2.4 million price demanded by the U.S. Department of Housing and Urban Development, which also required a cash deal.

The city plans to use the site for economic development in East Chattanooga. A community meeting about the site is supposed to be held next month while requests for proposals for demolition should be reviewed in time for tear-down work to begin this summer.

Contact staff writer Yolanda Putman at yputman@timesfreepress.com or 423-757-6431.