Southside to get hip new Moxy Hotel

Hiren Desai has prominently displayed in his office a personalized Monopoly board game with his caricature and the likenesses of other 3H Group Hotels staff that was gifted to him by his employees.

For a guy who has built about 30 hotels, and who co-owns both a 10-story and a 12-story building in downtown Chattanooga, Hiren Desai has kept a low profile.

"We're under the radar," says Desai, the CEO of Chattanooga-based 3H Group Hotels.

That's by choice because Desai doesn't go out of his way to gain publicity.

"He is the most modest man I've ever met in my entire life," says Meaghan Redner, director of E-commerce for 3H Group Hotels.

But Desai is becoming better known, since he's involved in a number of high-profile developments downtown and in Chattanooga's booming Southside district.

Desai recently announced that he plans to build a new, four-story 102-room Moxy Hotel on a former city parking lot on the northeast side of King and Market streets. Construction should start by March, and it's due to open in the spring of 2018.

The Moxy Hotel, a brand of Marriott International, launched in 2014 in Milan, Italy. It is now only in two U.S. cities - Tempe, Arizona, and New Orleans - although others are under development, including hotels in Nashville and Memphis. The Moxy brand is designed to appeal to younger travelers, with smaller rooms and a large, fun, first-floor common area. The check-in is a bar, and guests get a cocktail before they're given their room key.

"It's a boutique, affordable," says Desai. "It kind of fits that whole Millennial [lifestyle]. It'll be a good fit for the Southside."

Believes in Southside

The Moxy Hotel will be just a couple of blocks away from another hip, new Southside property in which Desai has an interest: the 10-story Edney Building (11 stories if you count the rooftop gathering space). It's an office building rife with startup and tech businesses that's the so-called hub of Chattanooga's new downtown Innovation District. It was purchased in 2015 from the Tennessee Valley Authority and developed by a group Desai is involved with.

A few blocks away, Desai's group in July paid $5.9 million for the James Building, a 12-story building at 735 Broad Street that was designed by architect R.H. Hunt, built in 1907 and is on the National Register of Historic Places.

Desai also recently spent $2.1 million to a buy a three-story, brick building at 27 W. Main Street which previously housed Chuck's II, a gay bar that was a pioneering business when it opened in the 1990s on the once-blighted Southside. Desai hasn't decided what to do with the Main Street property, although he may may set up a model of a Moxy Hotel room inside one of its vacant, first-floor storefronts.

"I believe in the Southside," Desai says.

David DeVaney, president of NAI Charter Real Estate Company, has followed the downtown real estate market since setting up shop in Chattanooga in 1998, and he is impressed with Desai.

"I've known Hiren probably for 10 years, and he has steadily grown his business," DeVaney says. "He's always been a wonderful person to deal with. He's the guy, when you call him, you get him on the phone, which I've always thought was very unique for a man who's successful as he's been."

"He does have a low profile, and I think modesty works for well with him and how he handles himself in the business community," DeVaney said. "And he's made some aggressive acquisitions and has grown from the hotel business to office and mixed-use."

Desai has money to invest in Chattanooga, since 3H Group Hotels in the past year sold nine hotels, including four recent hotel sales for $47 million.

'You only marry your wife'

Desai has an office on Riverfront Parkway overlooking the Tennessee River. Prominently displayed on a coffee table is a Monopoly board game with his caricature and the likenesses of other 3H Group Hotels staff that was gifted to him by his employees.

As in the Monopoly game, Desai is happy to buy and sell hotels he has built and other commercial properties. He begins every project with the end in mind.

"I first look at the exit before I get into [a development]," Desai says. "We don't marry our real estate. You marry your wife, and that's about it."

Accordingly, the number of his hotel holdings has ebbed and flowed. He's got 13 hotels now and six under construction, mainly in Florida and Nashville.

"We're not going to want 100 hotels," he says. "Our sweet spot's around 15, 16."

Desai didn't grow up in a hotel family. Of Indian descent, Desai was born in the central African nation of Zambia, which he left at age 7 to be educated at boarding school in England.

"I still follow the British sports," says Desai, who played soccer until age 38 when he was sidelined by a heel-bone injury that threatened to turn into a limp if he didn't quit. Golf is his sport, now. He's also a booster of University of Tennessee at Chattanooga (UTC) sports and Chattanooga Football Club.

Desai moved to Chattanooga in 1987 to study economics and industrial management at UTC.

"I had a relative here," he says, referring to his cousin.

A key connection here was Desai's father's friend from Zambia, Chattanooga businessman Harshad Naik, who let the 19-year-old Desai live in his basement when he first came to Chattanooga and later let him oversee the construction in 1993 of a Country Suites Hotel off Shallowford Road.

"He gave me my first opportunity [in hotel construction]," Desai says. "Then I ended up managing that hotel."

Naik is part of the 3H Group, which gets its name from the "H" in Harshad Naik, the "H" in Hiren Desai, and the "H" in another principal and investor, Harshad Shah, president and CEO of Hamilton Plastics. Harshad Shah hired Desai to work in his plastics plant from 1991 to 1993.

"Over there I did everything: drive a fork lift, operate a machine," Desai says.

Family is number one

The most important connection that Desai made in Chattanooga was meeting the woman who became his wife, Serina, who's also of Indian descent. They have two teen boys, Shaan and Dillan.

Desai's parents still live in Zambia, Desai said, in the same modest home they had when he was a boy. But they come here twice a year, Desai said, to visit his family and Desai's younger brother, who lives in Florida with his family.

Desai talks to his father a couple of times a week.

"He still is my mentor, sounding board - you name it," Desai says.

Desai works seven days a week, often starting early in the morning and leaving his office late at night.

"These guys ask me if I sleep sometimes," Desai says of his employees, who get emails from Desai at odd hours.

But Desai will drop what he's doing to take a call from his family or drive his son to Baylor School.

"That's our number one thing, is family," Desai says. "Without family, I wouldn't be here."

Desai said he strives to create a family atmosphere at 3H Group Hotels, and many of his employees have been there for more than a decade.

"I give credit to the team. It's not a one-man show," Desai says.