ABOUT EB-5
The planned Aloft Hotel is to be financed with funds from private investors under the Immigrant Investor Program, or EB-5. The federal program was begun in 1990 and is designed to stimulate the economy through job creation and capital investment by foreign investors in exchange for a U.S. green card to become a permanent resident.
Developers are moving ahead to remake the 10-story Chattanooga Bank Building downtown into an Aloft Hotel - a trendy, boutique brand that will offer about 150 rooms and valet parking.
Work on the $31 million project to restore the 89-year-old building at 736 Broad St. is expected to start this summer, and the hotel should open in late 2017, said Robert Lubin, president of Virginia-based developer AMCA LP.
"We're excited because we love the building," he said about the vacant tower. The developers announced a hotel project for the site about a year ago, but they weren't ready then to move forward with the brand.
Bob Doak, who heads the Chattanooga Convention and Visitors Bureau, thinks the Aloft by Starwood flag will appeal to millennials.
Doak said it will woo "younger and affluent [people] who really are looking for a unique experience" as well as other patrons.
"It will help to attract that added demographic," he said.
A one-night midweek stay at an Aloft Hotel in downtown Nashville was $299 per person, according to its website.
The local Aloft project would be the second boutique hotel planned for the central city and the third new boutique name to be added to Chattanooga's downtown hotel scene in as many years.
Chattanooga-based Vision Hospitality Group is to open The Edwin Hotel in 2017. That 90-unit hotel is under construction at Walnut Street and Aquarium Way.
Last month, another downtown boutique hotel, the 16-room Dwell Hotel, reopened on East 10th Street after the former Stone Fort Inn on the same site was revamped into a new style of bed and breakfast.
AMCA LP last week asked the Chattanooga City Council to approve installation of a large canopy where the Aloft Hotel entry will be on Broad Street.
"The awning is proposed to provide protective cover to arriving and departing guests [and] provides a recognizable feature," the request stated.
Lubin said guest parking will be at a nearby garage.
He said the developers are financing the hotel with the help of a federal initiative set up about 25 years ago called the Immigrant Investor Program, or EB-5. It allows foreign investors to invest money and create jobs in the U.S. in exchange for green cards allowing them to become permanent residents.
The minimum qualifying investment within either a high-unemployment or rural area is $500,000, and AMCA said it has 20 EB-5 investors as limited partners.
"We're ready to roll," Lubin said. "We're going forward."
A U.S. Citizenship and Immigration Services spokeswoman said it's estimated that at least 73,000 jobs have been created and more than $11 billion invested through the EB-5 program since its inception in 1990.
To address security concerns, EB-5 visa recipients undergo extensive background checks, according to USCIS, which operates under the Department of Homeland Security. EB-5 visa recipients are checked when first approved as conditional permanent residents, and again in two years when they apply to remove those conditions for their regular lawful permanent residency.
Kim White, who heads the nonprofit downtown redevelopment group River City Co., said she believes the use of EB-5 for the bank building is a first for the city.
Doak said he's not worried the new hotels planned for downtown will saturate the market.
"When these developers and owners and flags are looking at a community and investing tens of millions of dollars, they do their research," he said. "These are very smart people."
In addition to the two boutique hotels, local developers Ken and Byron DeFoor are putting in a Westin hotel with more than 200 rooms at the former BlueCross BlueShield of Tennessee headquarters at 801 Pine St.
And Dynamic Group opened a new Holiday Inn & Suites with 140 rooms late last year at 434 Chestnut St.
The bank building was constructed to house Chattanooga Savings Bank in 1927 and modified when that business was absorbed by First National Bank.
After the bank closed, the building housed dental, medical, Tennessee Valley Authority and other offices for many years. Tenants were asked to leave in 2009 when another developer proposed a Crown Plaza hotel and condo project, but that project never got off the ground.
Contact staff writer Mike Pare at mpare@timesfreepress.com or 423-757-6318.