A developer is crafting plans and using a state grant to help rehab the old Chattanooga Bank Building downtown, one of about a half dozen proposed hotels in the central city alone.
Chattanooga Hotel LLC is receiving $300,000 for the historic renovation of the 96-year-old vacant bank building, where developer Robert Lubin of R&R Capital Funding last year laid out a plan for a hotel with a Tapestry Collection by Hilton nameplate.
According to Lubin's company last week, workers were recently at the historic structure removing water from the basement, and a contractor is putting the rehabilitation project out for bid.
Lubin in an earlier phone interview estimated the makeover of the 10-story building, which will include about 140 rooms, at about $40 million.
"You can't have cookie-cutter rooms," he said about the Tapestry brand.
The state grant awarded last month was part of $8.7 million presented to projects across Tennessee that aim to renovate and preserve historic buildings. The Tennessee Department of Economic and Community Development grants are targeted at spurring communities and private developers to invest in buildings that have contributed to a location's history.
Aiding historic renovations
Todd Morgan, executive director of the architectural heritage group Preserve Chattanooga, said the grants help save buildings. He said in an email Monday that Tennessee is one of the few states nationally that doesn't offer a historic tax credit.
"The issue has been that Tennessee doesn't have a state income tax, so it made establishing a tax credit difficult," Morgan said. "The current grants offer a solution to that."
He said renovation costs can be higher for historic buildings and the grants help bridge the financing gap in many cases.
"Once the building is back online, the financial contributions to the local economy should more than makeup for the incentives long-term," Morgan said.
Preserve Chattanooga was awarded $24,000 for the historic Terminal Station at the Chattanooga Choo Choo downtown. Morgan said that grant will help replace the five sets of doors on the front of the historic terminal.
"There are only three sets now and only one set is functioning," he said. Morgan said the hotel earlier removed two sets and built half-walls.
"The new doors are being handmade and will replicate the originals, helping the front to look more like the original building," he said. "Preserve Chattanooga will receive a 30% reimbursement through the grant process."
In addition, the Tivoli Theatre Foundation received a $300,000 grant to fix up the Trigg-Smart Building.
Stuart McWhorter, the Department of Economic and Community Development's commissioner, said the historic development grants approved by the state legislature can serve as catalysts for future economic opportunity.
"Tennessee is known for its quality of life, and ... we have the privilege to take part in community development programs that assist in restoring and preserving some of our state's most unique and historic assets," he said in a statement.
New hotels planned
In the Chattanooga area, developers are planning, building or preparing to soon open more than 1,000 additional hotel rooms. Among downtown projects on the drawing board or under construction is a $33 million hotel with 188 rooms at 1201 Carter St. under both the Home2 Suites and Tru by Hilton brands.
Also, a $30 million Caption by Hyatt at 105 W. Main St. with 123 rooms developed by the 3H Group is planned. And a 123-unit La Quinta Inn & Suites hotel along with a two-level parking garage at Cowart and 13th streets downtown is under construction.
Additionally, a $25 million, five-story boutique hotel is proposed for East Main Street and Mitchell Avenue.
In late 2021, Chattanooga hotel operator Vision Hospitality Group bought a tract at Main and Broad streets, where officials said they're weighing what's next for that high-profile parcel.
Another developer has identified a parcel off Manufacturers Road on the North Shore as a potential hotel site.
In addition, a $10 million expansion at the Chattanooga Choo Choo with 27 more hotel rooms and the renovation of 25 Pullman cars is underway.
The historic bank building was constructed to house Chattanooga Savings Bank in 1927, which was later absorbed by First National Bank. After the bank closed, the building housed dental, medical, Tennessee Valley Authority and other offices.
In 2009, tenants were asked to leave when a different developer proposed a Crown Plaza hotel and condo project, but that effort never got off the ground.
Also, a local development group had bought the building and was looking at a hotel or an apartment complex holding 74 units. However, that project didn't proceed either.
Later, a Virginia group headed by Lubin purchased the site and an Aloft hotel was envisioned in 2018.
But Lubin said the coronavirus hit, and another Aloft was later slated to go up in the city. Vision Hospitality teamed with shopping center operator CBL Properties to put up an Aloft at the former Sears space at Hamilton Place mall.
Also, Lubin said, Aloft's parent company was bought by hotel giant Marriott, and he thought there was already a lot of that company's product in Chattanooga.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.