North Shore apartments join growing rental trend

Staff photo by John RawlstonA vacant lot at the corner of Cherokee Boulevard and Manufacturers Road is being eyed for a five-story, 84-unit apartment building.

Chattanooga's biggest hotel developer is venturing into the city's hot downtown apartment market and joining a growing list of firms looking to cash in on the trend to rent.

Vision Hospitality Group, which has 30 hotels, is planning a five-story, 84-unit apartment building on the North Shore near Renaissance Park.

The project is a first for Vision and one of more than 15 such ventures under development or consideration by companies that would create upwards of 2,000 new residential units downtown within the next couple of years.

"There's great demand, from everything we're hearing, for housing," said Mitch Patel, Vision's chief executive officer. "The timing couldn't be better."

The Vision apartment building is aimed at a nearly 1-acre vacant lot at Cherokee Boulevard and Manufacturers Road. Patel said city housing incentives are not being sought for the apartments.

Andrew Hibbard, the company's director of investments, pegged the project at costing "north of $10 million." Rents could range from $900 to $1,600 a month, he said.

"It's an opportunity to create a good presence at that intersection," Hibbard said, adding that work could start in late summer or early fall.

The site would hold about 26 parking spaces with the remainder coming from sharing spots in the city's Renaissance Park lot that's managed by CARTA, he said. A parking garage for the apartment complex isn't financially feasible, Hibbard said.

While worries have been expressed that parking for the apartments could crowd out public spaces, a Chattanooga Area Regional Transportation Authority official said the Vision approach seems reasonable.

Brent Matthews, CARTA's parking director, said there are 214 spaces in the Renaissance lot and another 60 nearby.

"I look at the 60-space lot and a lot of days there are five or six cars on it," he said.

Already there are monthly parkers on the Renaissance lot, Matthews said, most of whom use it during the day and put up "like a hang tag" in the vehicle when parked. He said the apartment residents mostly would park at night.

George Bright, president of Fletcher Bright Co., which developed the One North Shore condominiums and commercial space nearby off Renaissance Park, said it built a parking garage for its residents.

"We chose to do it that way," he said. "We used up all our land."

But, commercial tenants do have access to the Renaissance lot, he said.

"We pay CARTA for some spaces," Bright said.

The apartment market is sizzling with new units planned for sites ranging from the North Shore to the downtown business district and the Southside.

Chattanooga developer John Wise has raised much of the North Shore's new apartment stock. Another project, this one on Tremont Avenue with 53 units, is well underway.

In the city's core, an Atlanta development group has proposed a 10-story tower on the long-vacant 700 block of Market Street. That $25 million to $30 million project is slated to hold 125 apartments in addition to retail and office space and parking.

Off M.L. King Boulevard, the 691-bed Douglas Heights apartments between Douglas and 10th streets is going up.

Patel said his North Shore apartment project, along with other downtown housing, helps make the city's core more of a 24-hour place to live.

"It can't be an 8-to-5 city," he said. "You have to have a healthy core and you have to have people living there."

Patel said downtown living eases traffic by taking commuters off the roads, alleviates crime and aids retail and the tax base.

Vision bought its proposed apartment building site years ago from another developer, who obtained it in a swap with the city. That developer had planned a hotel near the north end of the Walnut Street Bridge and Coolidge Park, but after running into public opposition agreed to swap for the Cherokee Boulevard location.

Vision had foreseen a boutique hotel at the site. But it recently received approval for such a hotel at Walnut Street and Aquarium Way near the riverfront.

Since the recession, apartment living has become more of a lifestyle option with added people opting to rent who otherwise would have bought, experts have said.

Even though interest rates for home borrowing are low, many people don't have the credit or savings, they said.

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