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Arbor Hill Apartments are located at 5307 Highway 58.

Vic Desai, principal partner at ViaNova Development, jokes now about some of the things that used to go on at Arbor Hill, the 48-unit apartment complex overlooking Highway 58.

ViaNova bought the complex in 2013 — when it was named Spanish Villas — for $1 million and has since given it the Cinderella treatment, sinking $500,000 into renovations and updates.

The complex offers one- and two-bedroom units. One-bedroom units are 650 square feet and rent for $550 to $595 a month. Two-bedroom units are 750 square feet and rent for $650 to $695 a month.

The complex is pet-friendly and actually more affordable than some up-and-coming affordable options downtown, Desai said.

But it's required a lot of work.

In its former life and still operating under the name Spanish Villas, the apartment complex saw many drug deals go down, saw many squatters come and go — and stay.

When Desai and the partners at ViaNova considered buying Spanish Villas, they visited the run-down buildings and found nightmare conditions: a fire pit in a living room, 38-year-old wallpaper and 1970s cabinets and appliances.

"One of the bathrooms had minnows swimming it in," says Heather Everett, property manager at ViaNova. "It was basically just really, really, really bad."

But ViaNova is not one to shy away from a challenge. In fact, comebacks have sort of become the company's identity, says Desai.

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ViaNova is behind the ambitious Clemons apartment project in downtown Chattanooga, which will see the old Clemons Bros. furniture store repurposed with commercial space on the street and 50 urban loft-style apartments in the upper stories. The building sat empty for years after former tenant Blue Cross Blue Shield moved to Cameron Hill.

But before the Clemons project, there was Arbor Hill: a big project and some raised eyebrows. So far, ViaNova's two major projects have been remodels or repurposing jobs.

When Desai approached potential ViaNova investors about Arbor Hill, "at first they were like, 'Are you sure?'" he said.

So he made a case: the neighborhood around Arbor Hill is a largely-residential area with a mix of working-, middle- and upper-class families. For the most part, it's quiet, pastoral compared to most of Chattanooga. The area is just under five miles from Enterprise South, with major employers like Volkswagen and Amazon.com.

In fact, the worst thing about the are was Spanish Villas, said Desai.

"We saw that we had an opportunity to kind of change the entire area around here," he said. "This was causing a lot of the bad stuff around here."

ViaNova was able to secure investors and financing through the bank holding Spanish Villas, Alliance National Bank in Dalton, Ga.

Since the time of purchase, Arbor Hill's occupancy has shot up from around 14 percent to around 95 percent.

The property was recently annexed by Chattanooga, and earlier this year, Wal-Mart announced plans to build a Supercenter on Highway 58 — right next to Arbor Hill.

Desai is trying to decide whether to build more apartments at Arbor Hill or use the grassy hillside out front of the existing complex for commercial space.

He said the lack of sewer service is the biggest obstacle right now.

Until the annexation, Arbor Hill was in the county and faced a hefty price to tie into the county's sewer system. Now the property is in the city, but Desai says disputes between the city and county prevent city sewer from being run north to Arbor Hill.

Desai is optimistic, though, that when Wal-Mart unveils its plans, a sewer solution will come along. In the mean time, ViaNova is looking for another turnaround project, at a complex in even worse shape than Spanish Villas before the renovations.

"I think everybody deserves to have a home, not just a place to live," he said.

Contact staff writer Alex Green at agreen@timesfreepress.com or 423-757-6480.

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