This story was updated April 11, 2018, at 11:59 p.m. with more information.
A Nashville group is seeking $25 million in bonds to buy and renovate Patten Towers, the 11-story building in downtown Chattanooga holding hundreds of low- to moderate-income residents.
Elmington Capital Group, which recently started building an apartment complex on the Southside to create so-called "affordable" housing, is asking a city panel to approve the revenue bonds for Patten Towers.
The city’s Health, Educational and Housing Facility Board will hear the proposal regarding Patten Towers on April 25 at noon at the City Council Assembly Room.
"We need that kind of housing for some of our more vulnerable residents," said Mayor Andy Berke about the proposal involving the former hotel with 221 residential units at Market and East 11th streets.
An attorney representing Elmington and a company official both declined comment Wednesday on the plan related to the 113-year-old building that has a reputation for frequent emergency calls.
But a downtown redevelopment group and neighbors said they'll welcome the investment in the 196,500-square-foot building that holds a number of elderly and disabled people.
Amy Donahue, River City Co.'s marketing and communication director, said that having a new group purchase and improve Patten Towers is "a win" for downtown.
"It's a complicated property," she said. "It's historic but older. It comes with maintenance and upkeep issues."
Ken Hays, who heads Chattanooga's Enterprise Center in the Edney Building across 11th Street from Patten Towers, said it's a positive development if a group is going to put money into the building.
He said business people and others inside the Edney, which is the hub of the city's Innovation District, have worked with the Patten Towers landowner and residents, such as helping to create a fresh produce and packaged goods market in the building.
Hays said other ground floor space in Patten Towers is underused and could be repurposed to hold health services, for example.
Tia Capps, chief communications officer for the The Company Lab business accelerator at the Edney, said the effort should improve living conditions for Patten Tower residents.
"They're very much a part of what we consider our community," she said. "We know them by name ... "
In 2013, an electrical fire in the building caused the temporary displacement of a number of residents, which one person then called the biggest humanitarian disaster to hit Chattanooga since Hurricane Katrina.
Some residents had to live in emergency shelter conditions until repairs were made to the structure.
Hamilton County records show the building owner as Patten Towers LLC of Sherman Oaks, Calif., which bought the property in 2012 for $7.5 million.
Berke said the city experienced "moments of crisis" in 2013 when people firsthand saw "how problematic some of the housing was there."
"Over the past several years, we worked hard to improve the situation at Patten Towers," he said. "We're incredibly excited to see a group make an investment in that facility. It can be a better asset. It's in need of renovation."
In terms of its location in the Innovation District — 140 downtown acres where entrepreneurs, tech-based startups, and business incubators are creating a so-called innovation ecosystem — Berke said affordable housing is needed.
The district is "not just for tech entrepreneurs. It's for our entire community. It helps our businesses be more successful when there's a wide variety of people living in the district," the mayor said.
According to the city, the bonds would not represent a debt to Chattanooga or the state, and repayment would be made by the borrower.
Elmington is building Chestnut Flats, a $17 million, 174-unit complex on a vacant 3-acre lot at 2108 Chestnut St. about a third of a mile south of Finley Stadium.
Contact staff writer Mike Pare at firstname.lastname@example.org or 423-757-6318.