700 block project
› 10 stories
› $30 million
› 125 apartments
› 21,000 square feet of retail and restaurant space
› 21,000 square feet of office space
› 65 parking spaces tied through existing SunTrust Building garage
Source: River City Co., The Simpson Organization
Work started Tuesday on a 10-story tower in downtown Chattanooga as a developer moves ahead on a site originally targeted for revival by city officials a decade-and-a-half ago.
"This block that has been a little bit tired and bleak will be brought back to life," said Boyd Simpson, president of an Atlanta-based group that earlier this year bought the parcel in the 700 block of Market Street.
The Simpson Organization plans to erect a 125-unit apartment building that will be the tallest structure to go up downtown in three decades. Simpson said the $30 million project also will have office and retail space.
"We've watched the evolution of Chattanooga and its renaissance, particularly as an urban area," said Simpson, whose company owns the adjacent SunTrust Bank Building. "On this site there has been 15 years of changes and continuing effort."
The apartment building will hold about 65 parking spaces. In addition, the developer plans to leverage the SunTrust parking garage for use by the 700 block building, which doesn't have a name yet.
Kim White, who heads the nonprofit redevelopment group The River City Co., said the mixed-use project will help make the central business district more of a 24-hour-a-day, seven-day-a-week place.
"After 5, it's dead. We'll be seeing a vibrancy that we see in other parts of the city," she said.
The site was originally bought in 2000 by River City, which cleared it for redevelopment. But a couple of unsuccessful projects, along with the Great Recession, left only a vacant lot.
River City Co. in 2011 settled a lawsuit and reacquired the parcel from one of the failed development partnerships, and last year it issued a request for proposals for the site.
Chattanooga Mayor Andy Berke said the structure is part of about $500 million in downtown projects either planned, under construction or recently built.
"We're seeing the city transformed by a massive amount of investment in our core," he told about 50 people at a groundbreaking for the planned building.
Hamilton County Mayor Jim Coppinger said the new development "has been a long time coming." He said the retail planned for the structure will create new jobs.
"To have a vibrant downtown, that's important to the county," he said.
The 146,000-square-foot project received an incentive package from the city's Health, Educational and Housing Board to limit the property taxes on the project over the next decade. Boyd termed the tax breaks, which are valued at about $2 million, "essential to us."
"We're part of that progress" being made downtown, he said. "This is one piece."
David DeVaney, president of NAI Charter Real Estate Corp., said downtown has shown "a phenomenal amount" of activity over the past couple of years.
Prices for downtown office property, some of which is being turned into housing, has been across the board, he said.
"Some is staggeringly low," he said. "Some is staggeringly high."
But the transactions are opening up property for reuse, DeVaney said.
TSO Chattanooga Development LLP, a Simpson entity, paid $1 million for the tract on the east side of Market.
Construction is expected to take about 18 months on the apartment building, which will be erected by Chattanooga-based EMJ Corp.
To meet tax incentive agreements, rents for 25 apartments will be "affordable" as determined by a federal housing formula. Simpson said those will rent for about $772 per month.
The remainder of the one- and two-bedroom apartments will rent for about $1,050 to $1,750 per month, he said.
White said the length of time it took for the 700 block project to come to fruition shows the difficulties of downtown development.
"You need the right project at the right time with the right partner," she said. "This is a home run on all three fronts."
Contact Mike Pare at email@example.com or 423-757-6318.
Updated Dec. 15 at 10:30 p.m.