This story was updated at 5:08 p.m. on Thursday, Aug. 13, 2020, with more information.
A business entity related to the Fletcher Bright Co., which has had a contract to buy the Nikki's Drive-Inn site in North Chattanooga, has closed on the deal and paid $1.58 million for the property.
The Chattanooga real estate company has been looking for a restaurateur to put a new eatery on the 899 Cherokee Blvd. location since mid-summer.
"We're in talks with potential users for the restaurant side of the deal," said Cardon Smith, a vice president for the Fletcher Bright Co.
Nikki's owner James E. Jones shut down the 80-year-old restaurant icon in March amid the coronavirus lock down and never reopened. Fletcher Bright Co. has been looking for a new restaurant and put up a sign seeking a tenant.
Smith said he didn't know if Jones planned to reopen Nikki's at another location.
"I can't answer for him," he said. "He still owns the intellectual property. I don't know what he'll do with it."
Smith said Fletcher Bright Co. plans to start work within two or three weeks on a 10-unit townhouse project on a tract on Cherokee Boulevard immediately adjacent to the former Nikki's site.
Last year, Fletcher Bright unveiled plans for a four-story, 52-unit condominium complex on the Nikki's tract, saying it had a contract to purchase the property.
But in May, the development group changed its plans and instead decided to put the 10-unit townhouse project on the parcel next to the Nikki's site.
Smith said the company analyzed the market and cited the magnitude of the site work on the Nikki's location as reasons to hold off on the condo project.
On the smaller tract, each of the townhomes will be three stories with two-car parking on a bottom level, Smith said. The units with three bedrooms and three-and-a-half baths would sell in the mid-$500,000 range, he said.
Nikki's was long known for its jumbo fried shrimp and onion rings.
Jones said in an earlier interview with online channel ChattWithUs that the eatery was passed down from his parents, Charlie and June Jones.
"The customers made Nikki's," he said. "It's a favorite place for them to come."
He said then that there were some employees of the restaurant who had put in more than 30 years at the eatery.
Smith said he's not ruling out putting housing on the former Nikki's property in the future.
"The plan is right now to build and lease restaurant space," he said. "We're not ruling out there could be a phase two on the Nikki's site."
Contact Mike Pare at email@example.com. Follow him on Twitter @MikePareTFP.