A Chattanooga panel on Wednesday endorsed a planned affordable housing apartment complex in Alton Park, and officials expect the units to fill up quickly based on a similar Southside project.
"It's old fashioned supply and demand," said Donna Williams, the city's Office of Economic & Community Development administrator.
Rents in the planned 240-unit apartment complex to go up at 4905 Central Avenue are expected to run from about $850 to $900 a month for a two-bedroom unit to around $1,100 monthly for a three-bedroom apartment, said Josh Haston of developer LDG Multifamily.
The city's Health, Educational and Housing Facility Board gave preliminary approval for issuance of up to $35 million in multi-family revenue bonds to finance the project called The Reserve at Mountain Pass.
Haston said that final approval of the bonds and federal tax credits administered by the Tennessee Housing Development Agency will be sought.
Assuming receipt of funds from the agency this spring, plans are to start construction by mid-summer with the first units opening in the third quarter of 2022, according to LDG.
All of the apartments will go to those earning up to 80% of the area median income, which comes to $58,080 a year for a family of four in Hamilton County.
Panel member Lloyd Longnion asked that of the more than a dozen housing projects in the board's portfolio, which does the one considered Wednesday most closely compare.
Williams said that's probably Chestnut Flats, a 199-unit affordable housing apartment complex on Chestnut Street. While the ribbon was cut for its opening in the fall 2019, officials said the apartment complex is now fully occupied.
Bonds also were approved to finance Chestnut Flats, and its developer obtained a payment-in-lieu-of-tax (PILOT) agreement from the Chattanooga board to exempt some property taxes on the complex. Williams said The Reserve at Mountain Pass developer is expected to seek similar property tax breaks through a PILOT as well.
The proposed apartments on 13.4 acres on Central Avenue would hold multiple three-story buildings, a clubhouse and a small pool house, plans show. Half the residences would be two-bedroom units, and the other half would hold three-bedroom units.
The tract originally was rezoned residential three years ago by Chattanooga planners. The parcel formerly held the Frank H. Trotter School and is across the road from a longtime Velsicol Chemical Co. site that is now vacant.
City Councilman Erskine Oglesby said earlier that all the due diligence is done on the apartment site and on the old Velsicol property.
"I know of no major concerns on the old Velsicol site," he said.
Oglesby has said the project will provide needed affordable housing and can attract additional economic development for both the Alton Park and Piney Woods neighborhoods.
Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.