A 10-story tower, the tallest building slated for downtown Chattanooga in at least two decades, won support from a key city panel Thursday as the developer eyes an October start date.
Set to hold 125 apartments along with retail and office space, the $28 million structure is proposed for a long-vacant site on the 700 block of Market Street, filling a hole in downtown's core.
"It's a good start," said Boyd Simpson, chief executive of Atlanta-based The Simpson Organization, after property tax breaks were endorsed by the city's Health, Educational and Housing Facility Board for the 146,000-square-foot project. The City Council and Hamilton County Commission still must give their approval.
About The Simpson Organization
What: Owns 80 buildings in the Southeast, 65 in urban centers
Size: Portfolio has $1 billion market value
Chattanooga: Bought SunTrust Tower on Market Street in 2007
Source: The Simpson Organization
Kim White, who heads the nonprofit downtown development group River City Co., said the apartments are the most seen in the central business district in many years.
In addition, the building will offer 22,000 square feet of added retail in the central city, White said.
"That will be a game-changer," she said, adding she's "wowed by the changes" that the building will make in the heart of the city.
Simpson said the building will have almost as many square feet as next door's SunTrust Tower, minus its parking garage, which his group also owns. He said the new building also will hold 70 parking spaces and share excess parking in the SunTrust garage.
"We're borrowing from ourselves," he said about the parking, which will be accessed from the Cherry Street entrance. "It produces a significant economic benefit."
Simpson said all of the apartments will have balconies, and there will be a 25-foot-wide outdoor terrace in the rear of the structure above the roof line of existing Cherry Street buildings.
To meet the terms of the tax incentives, rents for 25 apartments will be "affordable" as determined by a federal housing formula. Simpson said those apartments will rent for $772 a month.
The rest of the one- or two-bedroom units will rent for about $1,050 to $1,750 a month, he said.
The Simpson Organization is to receive a 10-year tax break with a four-year phase-in period, amounting to a property tax savings of more than $2 million. The group will pay the education portion of its property tax bill and the levy on the commercial space.
Becca Hullender, manager of Giorgio Men's Warehouse next door to the proposed site, said she thinks the tower will help her business. She added that it's about time that a project is finally happening on the site.
"I'd definitely agree," Hullender said.
In 2000, River City bought the land and the two- to three-level brick buildings it held. Another developer proposed new housing and retail in 2005 and the lot was cleared.
But nothing was built, leaving an empty hole in the city's fabric that served as a location for food trucks and open-air movies.
Simpson said the property is financially feasible because his company owns the SunTrust building and won't have to build more than 70 parking spaces.
"We have a unique situation here," he said. "It allows us to leverage the SunTrust building."
Simpson said he sees office space in the building having 14-foot ceilings and big windows. Simpson added that he'd like to see an alley in the rear of the building "gentrified" and offering space for businesses and shops.
He said it would take builders about 15 months to raise the structure once work starts. He's committing about $11 million to the project and plans to borrow the rest.
Contact Mike Pare at email@example.com or 423-757-6318.