3 Chattanooga hotels to be converted into apartments to meet affordable housing crunch

218 rooms to be renovated into mostly studio units, according to proposal

Staff photo by Mike Pare / An America's Best Inn on Lee Highway shown in this Tuesday, Nov. 15, 2022, photo, would be converted into the apartments, according to a developer's proposal.
Staff photo by Mike Pare / An America's Best Inn on Lee Highway shown in this Tuesday, Nov. 15, 2022, photo, would be converted into the apartments, according to a developer's proposal.

Aiming to make a dent in Chattanooga's affordable housing crunch, a developer has plans to convert three hotels with 218 rooms into apartments.

"So many folks are in need of housing," said Carey Thornhill, chief executive of Thornhill Management Group.

Thornhill said in a phone interview that plans are to buy and convert the Motel 6 at 7707 Lee Highway and the America's Best Inn at 7717 Lee Highway as well as the Knights Inn at 3655 Cummings Road.

The Lee Highway hotels are near the Airport Inn at 7725 Lee Highway, where the city is looking to change that property into about 70 units of permanent supportive housing in a plan that has drawn fire from some neighbors.

Also, Thornhill's group that's based in Soddy-Daisy plans to buy a property that in the past offered 19 rooms by the week on Dayton Boulevard and renovate the units into apartments, he said.

Studio apartments mostly will go into the new complexes, Thornhill said.

"For that sector, there seems to be the most need," he said.

The redeveloped units would be leased annually, Thornhill said. Among options the developer is considering use of a Chattanooga Housing Authority program that offers vouchers to tenants based on income, he said.

Thornhill said rents could come in from $900 to $1,000 a month, though that may change by the time the units are ready to be leased in late 2023.

His group is seeking rezoning of the three hotels from the Chattanooga-Hamilton County Regional Planning Commission in December. Thornhill said the new zoning would permit the company to "maintain the door count" and help amortize its costs.

He declined to say how much the group would spend to buy and turn the hotels into apartments. But plans are to add kitchenettes with granite countertops, put in vinyl plank flooring, upgrade plumbing and give the rooms face-lifts, the developer said.

Work could start next spring on transforming the hotels if the proposals receive city approvals, he said. Thornhill said work could start in January on the Dayton Boulevard site that's just past Gadd Road.

This summer, an Atlanta firm revealed plans to convert the Motel 6 in Brainerd into apartments to supply workforce housing to that area.

"We're seeing a big need for this," said Harry Patel, chief financial officer for the Atlanta firm JDH Developers, in a phone interview.

He said rents likely will range between $1,000 to $1,200 a month with units to be fully furnished, with large refrigerators and 50-inch flat-screen TVs.

Thornhill, who said his company specializes in affordable housing, said the hotels have a transient nature and would benefit from a more sustainable model.

He said in a letter included with the rezoning application for the hotels that the existing model is "a dying concept," noting that so many rooms go unused every month.

Earlier this year, Chattanooga Mayor Tim Kelly unveiled plans for a $100 million affordable housing initiative over five years.

He said the city planned to put up $33 million in "seed" money without raising taxes. The remaining two-thirds funding is to be raised working with nonprofit groups, banks, foundations and other entities.

"In a very real way, Chattanooga faces a crossroads," Kelly said in a news conference, adding that housing affordability is helping drive homelessness.

But the Airport Inn project has drawn concerns from nearby residents and families with children at Silverdale Baptist Academy over how officials would choose who stays in the facility and how residents would access daily essentials like food.

Chattanooga leaders said they will commit to increasing law enforcement around the area. Also, no one on the sexual offender registry or with a serious violent felony conviction will be eligible to be a resident, and city officials said there will be a permanent no-camping buffer ordinance surrounding the project.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.

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