A New York City company has bought a downtown Chattanooga hotel that helped ignite a redevelopment of the city's core more than a decade ago.
An affiliate of global investment firm KKR & Co. has purchased the DoubleTree by Hilton Hotel on the 400 block of Chestnut Street for $27.5 million from Chattanooga-based Vision Hospitality Group.
Mitch Patel, Vision's chief executive officer, said the company is typically a long-term holder of its assets, but the sale of the 12-story DoubleTree made strategic sense.
"This particular hotel, it made sense," said Patel. "People say don't get emotionally attached. I'm one in which it's difficult to do that. It was the right decision."
He said he still believes in the Chattanooga market, where Vision has 13 hotels.
"We're continuing to grow and look for opportunities," Patel said.
The hotel was originally built by former Chattanooga developer Franklin Haney in the early 1970s when it opened under the Sheraton flag, Patel said.
Vision bought the hotel in 2006 when it was a Clarion, he said.
"It was in pretty bad shape," the company CEO said. "There were weeds growing out front. The entrance was on an alley way. We bought it and put in a considerable amount of money."
At that time, much of downtown's growth was along the riverfront, he recalled, and no one wanted to invest south of Fourth Street.
Today, there are several hotels in the area, including a Holiday Inn & Suites across Chestnut. Also, a few blocks away, a Hotel Indigo opened last year at Sixth and Pine streets.
In addition, the DeFoor Brothers development group in 2017 built the Westin in the former BlueCross BlueShield of Tennessee headquarters at Pine and M.L. King Boulevard. That area has been dubbed the West Village with a collection of small shops and restaurants.
Earlier this year, the DeFoor Brothers acquired the nearby Chattanooga Marriott Downtown next to the city's convention center, the Days Inn Rivergate and the Hotel Indigo. That stretched the West Village's footprint from Carter Street, across M.L. King and to Sixth Street.
"We wanted to create a boutique convention area," said Byron DeFoor, who added that the hotel purchases give the West Village about 828 rooms.
Patel said the redeveloped DoubleTree was "instrumental in seeing the city center to start revitalizing."
The 134,901-square-foot hotel at 407 Chestnut Street was originally built as a Sheraton Hotel in 1974, according to Hamilton County property records.
Vision Hospitality earlier this year opened The Kinley hotel with 64 rooms in downtown's Southside across Market Street from the Chattanooga Choo Choo.
This summer, Vision and Chattanooga shopping center company CBL Properties opened a seven-story Aloft hotel next to Hamilton Place mall.
Patel said the hotel business was "surprisingly good" this summer as many people believed the coronavirus pandemic was over or waning.
But, he said, the surge in cases brought by the Delta variant has created a lot of cancellations as people become a little more fearful of travel. Also, business travel, which has taken a hit amid the pandemic, isn't picking up, Patel said.
"It will be a bumpy road this fall and winter until it's spring again," he said.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.