After recently losing its executive director and its offices, the Tennessee Multicultural Chamber of Commerce on Monday lost some of the land where it once planned to build a center to boost minority business.
Two lots on M.L. King Boulevard that the minority chamber bought in 2008 were sold at auction. The winning bids -- $250,000 apiece -- came from the financial institution that loaned the money for the lots in 2008.
The Chattanooga Community Development Financial Institution will receive whatever is unspent from its $579,000 loan to the chamber and will get title to the properties at 423 and 439 E. M.L. King Blvd., said attorney and trustee David Elliott, with Grant, Konvalinka and Harrison.
Only one other bid was made. Dr. Thomas Brooks bid $25,000 for 349 E. M.L. King, which he said is next to a business he owns.
When the loan was made in 2008, the properties were valued for tax purposes at $211,000, county records show. CCDFI did not ask for a new appraisal before making the loan to the multicultural chamber.
David Johnson, president of CCDFI and Chattanooga Neighborhood Enterprise, did not return a call Monday seeking comment on the organization's plans for the properties.
No one from the Multicultural Chamber attended the auction. Chamber board Chairman Walter Hitchcock did not return a call seeking comment.
Last week, Hitchcock announced that the minority chamber founded in 1999 was being reorganized. He said Sherrie Gilchrist had resigned as executive director and that volunteers were running the chamber.
The organization also has moved out of offices at 535 Chestnut St. and into what Hitchcock said were rent-free offices in a former school on South Highland Park Avenue.
The Multicultural Chamber bought the M.L. King lots in 2008 from Bishop W.C. Hunter, pastor of The World's Church of the Living God, and from Frances A. McWhirter, according to newspaper archives. Records show the land Hunter owned appraised at $46,600 and McWhirter's at $165,200.
The plan was to build a Business Solutions Center, but it never came to fruition.
Gilchrist borrowed another $150,000 from SunTrust bank in 2009, using the property and the chamber's possessions as collateral, records show.
Elliott said SunTrust's interest would essentially be erased by the auction sale.
A spokesman for SunTrust said Monday the bank does not comment on client relations.