Downtown revival comes to central Chattanooga [photos]

West housing is now under construction on the University of Tennessee at Chattanooga campus. The building, at the corner of Vine and Houston streets, will offer two floors of parking beneath 9 to 12 floors of housing, according to unnamed construction workers on the scene.
West housing is now under construction on the University of Tennessee at Chattanooga campus. The building, at the corner of Vine and Houston streets, will offer two floors of parking beneath 9 to 12 floors of housing, according to unnamed construction workers on the scene.
photo Douglas Heights is a new UTC dorm across M.L. King Boulevard from the university.

What’s coming downtown

* 2,599 apartments* 268 condos and housing units for sale* 1,461 college student beds* 748 hotel rooms* 589,800 square feet of commercial space* $902.5 million of private investmentSource: River City Co.

Major downtown projects underway

* Cameron Harbor — The $159 million complex on the Tennessee River off Riverfront Parkway on the west side of downtown includes 239 apartments, 19 townhouses, 22 single-family houses and is being developed by Evergreen Real Estate in Nashville and Buck Schimpf in Chattanooga.* UTC dormitory at Vine and Houston — The $83 million complex will include 600 units, 600 parking spaces and commercial space for a book store and other retail outlets.* Westin Hotel — The former headquarters of BlueCross BlueShield of Tennessee, the 10-story Gold Building, is being renovated into a 254-room Westin hotel slated to open by June. Developers Byron and Ken Defoor also bought and renovated the nearby Pioneer Bank, Gilman’s Paint and CitiPark buildings to house a Shula’s Steakhouse and a number of new retail outlets.* 728 Market St. — The Simpson Organization in Atlanta is building a $31 million complex with 122 apartments, 22,000 square feet of commercial space and 22,000 square feet of retail space.* Tomorrow building — The four-story site of the former Ross Hotel and Yesterday’s tavern on Patten Parkway is being converted into 39 micro-unit apartments and the first co-living residence in the Southeast. It is scheduled to be finished by December.* First Tennessee building — Upper floors of the 16-story office building are being converted to 80 apartment units by Heritage Land and Development Co. of Memphis.* Maclellan Building — The historic office building, once headquarters for Provident Life and Accident Insurance Co., is being converted into 90 apartments in a $10 million project by Heritage Land and Development.* East Third and Central — Across from Erlanger hospital, Belle Investment Co. of Knoxville is developing a $35 million mixed-use facility with 220 apartment units, a parking garage and a 6,000-square-foot pharmacy on ground level.* Douglas Heights — The 690-bed student housing complex built by Riverside Development, a seven-story, $31 million facility, opened in August.* 1400 Chestnut St. — A 225-unit apartment complex is being built by Kore Development for $25 million.* 1701 Broad Street — A 158-unit apartment complex on the Southside being built by the JA Murphy Group for $24 million.Source: River City Co.

After living in suburban homes in East Brainerd and Brainerd for 12 years, Joe Pleva was eager to give up mowing the lawn and raking leaves, so he and his wife decided last year to buy one of the riverfront townhomes in Cameron Harbor.

Pleva, a retired TVA manager who now sells commercial real estate, said he was surprised at the eclectic mix of those moving downtown and immediately loved with the appeal of living on the Tennessee River and walking to downtown attractions.

"It's like living in Charleston or Baltimore and being on vacation all the time," Pleva said of his new downtown condo. "Downtown Chattanooga has really become a fun place to live."

Developers are trying to capitalize on people like the Plevas who want a more urban lifestyle, with plans for nearly $1 billion of new housing, retail, office and commercial developments in and around downtown.

Over the next couple of years, the number of people living downtown is projected to double with the addition of 2,599 apartment units, 268 condos and townhomes and 1,461 beds for college students. With the drawing power of the Tennessee Aquarium, Chattanooga Choo Choo and other tourist attractions, hotel developers also are adding 748 rooms for overnight guests.

"Ten years ago when we moved downtown, there wasn't much going on after 5 o'clock, but downtown is a much different place today," said Kim White, president of River City Co., the downtown development agency. "We're seeing a total transformation of the central city."

After decades of suburban migration, more Chattanoogans appear ready to make their homes in the urban core again, even with smaller homes and fewer parking options.

To be sure, only about 1 percent of all Hamilton County residents live in downtown Chattanooga, and most families are likely to favor suburban houses over urban condos. Among the 55,000 people who work within a 1.5-mile radius of downtown Chattanooga, only 3.2 percent now live in the city center, on the North Shore or the Southside, according to studies conducted by River City Co.

Even at the University of Tennessee at Chattanooga, the urban campus houses fewer than one in three students.

But White and UTC planners expect the appeal of Chattanooga's revitalizing core will attract new residents. Surveys indicate 62 percent of millennials want to live in an urban environment and a growing number of empty-nesters want to shorten their commute to work.

Other cities that have built attractive downtowns such as Charleston, S.C., and Asheville, N.C., have nearly three times the share of city-center workers who choose to live downtown.

"If we match those cities, we can sustain even more downtown housing, and that in turn should help bring even more places to eat, shop or entertain all those people living or coming downtown," White said.

With the Riverwalk extended this year to St. Elmo and construction to begin soon to revamp Miller Park and Patten Parkway and M.L. King Boulevard, Mayor Andy Berke told the Downtown Council of the Chamber of Commerce last week he expects downtown to continue to draw more residents and visitors.

Chattanooga is the first midsized city to establish an Innovation District, 140 acres in the central city built around EPB's high-speed internet and startup business programs like those offered at the Company Lab and Lamp Post Group downtown.

"The interaction of people and businesses in the startup companies being built downtown are fueling the innovation economy in the heart of our city," Berke said.

River City Co., private foundations and the city of Chattanooga have invested millions of dollars in parks, riverwalks, streetscapes and other attractions to create a walkable, unique and scenic downtown.

"Young people who wanted to leave our city a generation ago are now coming to our city, sometimes when they don't even have a job, because they know it is a place where they want to live and feel like they can build their future," White said.

UTC, with on-campus dorm space for about 3,500 of its 11,500 students, is building an $83 million dorm, parking garage and bookstore at the corner of Vine and Houston streets. Near the UTC campus, the $41 million Douglas Heights Apartments opened in August with 691 student beds, and Walk to Campus is adding several hundred beds at a number of renovated downtown buildings.

"We definitely use the appeal of living in Chattanooga as a selling point for our university," said Chuck Cantrell, associate vice chancellor of marketing at UTC. "Students want to be in a community that offers lots of activities and opportunities, not only for academic pursuits, but also for recreation and entertainment. Downtown is seen as a cool place to live and study, and that is attractive for both our students and our staff."

But most of the downtown housing is coming from developers of market-rate apartments in the central city and the Southside.

Three years ago, River City and other downtown backers sought public input on how to re-imagine the area between Sixth and 12th streets. Participants identified 22 properties that needed development. So far, 15 of those are undergoing construction, according to a River City website that tracks downtown projects.

About 60 percent of the major downtown projects are being done by out-of-town developers, White said.

The central city also is drawing Chattanooga developers who previously focused their work in the suburbs.

Byron and Ken Defoor, who began building office and other commercial projects in East Brainerd even before Hamilton Place mall opened in 1987, began focusing on downtown Chattanooga six years ago and now are investing $84 million to bring a 254-room Westin Hotel, a Don Shula's Steakhouse and numerous retail tenants, residential parking, rental units and condos to the Chestnut Street area.

The Defoors bought the Gold Building downtown in 2010 to redevelop as a luxury hotel. The 10-story structure at 801 Pine St. along U.S. Highway 27 was formerly the headquarters for BlueCross BlueShield of Tennessee.

"This is the first thing many people see when they come to our downtown - it's kind of a gateway into our city - and we think it is going to be great for Chattanooga," Byron Defoor said.

Contact staff writer Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.

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