Michigan-based nonprofit suggests affordable apartments for Chattanooga's Gateway site

Staff Photo by Olivia Ross / The BlueCross BlueShield of Tennessee property at the Gateway is seen May 5 from the 10th floor of The Westin Chattanooga.

Hamilton County officials aren't the only ones with an interest in BlueCross BlueShield of Tennessee's Gateway campus, a site in downtown Chattanooga the company recently put on the market.

Mayor Weston Wamp's office announced this month the county is making an offer on the land at 401 W. M.L. King Blvd. with the goal of developing the property into a public school. However, a Michigan-based nonprofit, the Multifamily Coalition for Affordable Housing, has also suggested a project for the site.

"The quickest way to help ease Chattanooga's dearth of affordable housing is for BlueCross BlueShield of Tennessee to transfer your Gateway campus property to Multifamily Coalition for Affordable Housing," Jack Zollinger, the nonprofit's board president, said in a May 3 letter addressed to BlueCross BlueShield of Tennessee CEO J.D. Hickey.

Selling the property at a considerable discount to the coalition is another option the insurance company should consider in lieu of a transfer, Zollinger said.

The Gateway's 11 acres would allow, with city and county support, the construction of approximately 265, three-story walkup apartments, or many more apartments if four or more stories per building is allowed, Zollinger said.

Zollinger said he received a call Tuesday from Hickey's assistant, who told him senior staff members were reviewing his letter before presenting it to the company's CEO.

"We're encouraged by the interest we've received from many in the community on the Gateway property and will continue to consider all offers through June 1," Dalya Qualls White, senior vice president and chief communications officer at BlueCross BlueShield of Tennessee, said in an email to the Chattanooga Times Free Press on Tuesday.

A Chattanooga resident, Zollinger said in a phone call he could see a downtown school co-existing with an affordable housing project on the same site, depending on the number of stories allowed for the housing complex.

Zollinger doesn't yet have a precise figure for the cost of the apartments.

"Chattanooga has a critical shortage of affordable housing," he wrote in his letter.

Low-income housing developers cannot afford to build affordable low-income housing without tax credits and other incentives from the U.S. Department of Housing and Urban Development, states, cities and civic-minded companies like BlueCross BlueShield of Tennessee, and lenders, Zollinger said.

The Multifamily Coalition for Affordable Housing frequently works with a for-profit company based in Detroit called American Community Developers, he said in his letter.

"Both entities have a sterling reputation with state housing authorities where we own properties, and with HUD," Zollinger wrote.

As the affordable housing crisis worsened, the coalition teamed with American Community Developers to develop low-income workforce housing, Zollinger said.

"Some of the new developments accept tenants with HUD Section-8 project-based vouchers awarded by city housing authorities," he said.

The housing choice voucher program is the federal government's major program for assisting low-income families, older adults and the disabled to afford decent, safe and sanitary housing in the private market, according to the HUD website.

Between the two entities, the Multifamily Coalition for Affordable Housing and American Community Developers own and operate 114 properties that encompass more than 15,000 apartments in 12 states.

According to its website, the Multifamily Coalition for Affordable Housing has participated in nine affordable housing developments in Michigan, Indiana, Ohio and South Carolina. Its board has four members.

"As an aside," Zollinger added at the end of his message to Hickey, "I can envision you cutting the ribbon at the opening of the BlueCross BlueShield Tennessee Apartment complex."

County officials see a new school at the Gateway site as a way to create more pathways for career and technical education in a growing part of the community. The Hamilton County Property Assessor values the land and the building at $11.8 million.

Wamp has said the plan presents an "opportunity to fulfill a promise made three decades ago that the legacy of Kirkman Technical High School would live on," referring to a Chattanooga trade school that closed in 1991.

Contact David Floyd at dfloyd@timesfreepress.com or 423-757-6249.