A developer of a downtown Chattanooga block near the riverfront has sold a 1-acre parking lot on the tract to another group for $3.2 million.
Urban Renaissance Group sold the parking lot on Walnut Street, between Aquarium Way and Third Street, to a Chattanooga entity led by Tower Construction Vice President Calvin Ball.
Ball said plans are to build 11 townhomes on the site, similar to others on the block, with an asking price of up to $1.4 million each.
Dale Mabee of Urban Renaissance said his group had exercised an option to buy the 1-acre parcel from a city panel in 2014 for $850,000.
Mabee said the sale of the land to Ball's group included predevelopment planning for the proposed new townhomes along with infrastructure work it had done to improve the land, such as putting in sewers. Also, he said, the group had paid an annual fee for each year the tract was under option.
"We profited off it," Mabee said. "But we undertook a big risk and put a lot of work and improvement in that block. That's the free enterprise system. Sometimes it pays off and sometimes it doesn't."
Urban Renaissance had already built 22 upscale units on the block bordered by Cherry and Third streets in the project dubbed Walnut Hill Townhomes. Mabee said the group was ready to start construction on the last 11 townhomes on Walnut but it received the purchase offer.
He said one of his partners is retirement age and the other is doing more commercial development so they decided to accept the offer.
Ball said his group also obtained the townhouse drawings for which the sellers already had secured approval, and the goal is to match the new units to the existing ones on the block.
He said plans are to start work in November, with the hope of having most of the new townhomes completed by late 2019.
Ball said his group aims to pre-sell 80 percent of the units "pretty quickly." He said the units will range in price from $850,000 to $1.4 million.
Ball said that each townhome has a separate two-car garage, rather than residents having to park in a garage or on the street.
Mabee's group, which includes Don and Mike Moon, had originally acquired part of the block for about $1.07 million about a decade ago from the Chattanooga Downtown Redevelopment Corp. He said his group won a competitive bid. Mabee said the the city did not offer financial incentives with the deal.
He said the group started work on the site before the Great Recession and managed to get through the economic downturn.
"We developed a quality neighborhood," Mabee said.
He estimated that about $1 million in property taxes have been paid since the townhomes were built.
"We were pioneers, particularly in the non-condominium residential market," Mabee said.
Just across Third Street, a South Carolina developer announced last month plans to put new apartments and townhomes on two Unum Group parking lots in one of the largest-ever such commercial projects near downtown's riverfront.
Some 151 apartments and a dozen townhouses, along with 16,000 square feet of office and retail space, are to go up on the lots, according to the company.
Contact Mike Pare at email@example.com or 423-757-6318. Follow him on Twitter @MikePareTFP.