City of Chattanooga OK's Patten Towers deal, gives new buyer tax break

City of Chattanooga OK's Patten Towers deal, gives new buyer tax break

December 19th, 2018 by Mike Pare in Business Diary

Patten Towers, left, is undergoing a $25 million purchase and renovation. At right is the Edney Building and a portion of Warehouse Row.

Photo by Staff File Photo /Times Free Press.


The 11-story Patten Towers was constructed as a hotel in 1908 and later converted to housing in 1978, according to the city.


A nearly $10 million renovation of Patten Towers, the first full makeover of the downtown Chattanooga high-rise for the elderly and disabled in four decades, is slated to start next spring.

The 110-year-old, 11-story tower will receive what officials said Wednesday are critical safety and mechanical system upgrades resulting in fewer calls for fire and emergency services to the site.

"My first day at work (in 2013) we had to evacuate the building," said Donna Williams, the city's administrator of the Office of Economic and Community Development. "Firefighters and other emergency service providers were taking some people down the stairs in wheelchairs."

The city's Health Educational and Housing Facility Board (HEB) approved a 25-year property tax break with Patten Affordable Partners LLC. That company, made up of Ellington Capital of Nashville and Belveron Partners of San Francisco, also will receive the proceeds of $25 million in tax-exempt revenue bonds.

City Attorney Phil Noblett said Patten Affordable Partners will receive a 100 percent property tax break, except for the payment of school taxes, over the 25-year agreement.

The group is buying Patten Towers, which holds about 221 people at Market and East 11th streets, for $16.5 million and then spending about $9.5 million on the renovation, according to the city. Hamilton County still needs to OK the deal.

John Shepard, an Ellington attorney, said a lot of work will involve the former hotel's mechanical systems. Some parts of the elevators are original, he said. Shepard added that the interiors of every unit will be improved.

"It will make a significant impact in terms of living conditions and quality of life for those people living there," he said.

Shepard said completion will take until late 2020 because renovation will go on while the building is occupied.

He said no one will be involuntarily displaced. Shepard said the group likely will set up "hotel units" inside the building and move people there temporarily while their housing is renovated.

If anyone is moved outside the building, plans are for them to go to the Chestnut Flats apartment complex, which Ellington is now building on the Southside, he said.

"We'll move them back at completion at our cost and expense," Shepard said.

HEB member Richard Johnson asked if Patten Towers residents will have an option of staying on site or shifting to Chestnut Flats. Shepard said the group wants to limit the number of people moved off site.

Attorney Mark Smith of Miller & Martin said plans are to pull out a small grocery store, Bingo's Market, from the PILOT and not convey that retail space to HEB. Such retail can't be part of a PILOT before HEB, he said.

Tuesday, it was announced that Bingo's Market will reopen in Patten Towers next spring by Causeway, The Enterprise Center and the YMCA of Metropolitan Chattanooga in a three-year deal with the new owner. Opened in 2017, Bingo's showed early success but was closed for the past several months as the building underwent a change in ownership.

Board member Lloyd Longnion asked if an even longer deal with Bingo's was considered. Shepard said while there aren't talks, the goal is for Bingo's to be self-sustaining.

"We want them there," he said.

According to the city, the renovated building will add a fitness center and there are plans for offices so residents can access nonprofit services.

Contact Mike Pare at or 423-757-6318. Follow him on Twitter @MikePareTFP.