An affordable housing developer is seeking approval for up to $35 million in financing next week from a Chattanooga panel to raise one of the largest new apartment complexes in Alton Park in years.
"We need more housing, affordable housing," said City Councilman Erskine Oglesby Jr., about the 240-unit complex. "We need neighborhood revitalization and stabilization. It can go a long way to making it happen."
The proposed apartments on 13.4 acres at 4905 Central Ave. would hold multiple three-story buildings, a clubhouse and a small pool house. Half the residences would be two-bedroom units, and the other half would hold three-bedroom units.
A company tied to LDG Development of Louisville, Kentucky, is expected to seek preliminary approval for issuance of up to $35 million in multi-family revenue bonds from Chattanooga's Health, Educational and Housing Facility Board.
The proceeds of the sale of the bonds would be loaned to Reserve at Mountain Pass LP to finance construction and equipping of the apartments, according to the board that's scheduled to meet virtually on Wednesday.
Josh Haston of LDG, which has offices in Nashville, said the company already owns the land and approval of the bonds will go toward getting the project off the ground.
But, he said, 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 an opening in 2023, according to LDG. While rents aren't set yet, the apartments will go to those earning up to 80% of the area median income, which comes out to $58,080 for a family of four in Hamilton County.
The total development cost of the apartment project is $52 million including the equity the tax credits bring, Haston said.
Receiving the financing would culminate at least three years of work to bring the project to fruition.
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 vacant.
Oglesby said 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 can attract economic development for both the Alton Park and Piney Woods neighborhoods.
"It will create opportunities for growth and jobs," he said.
Oglesby said there was a meeting with LDG and the neighborhood recently that mostly discussed infrastructure, tree alignment and other similar issues.
Last year when the project went before Chattanooga planners, some neighbors complained about having apartments at the site. One person wanted single-family housing, while another said apartments would bring congestion.
LDG calls itself an experienced developer of workforce and affordable housing. In 2019, LDG was named the No. 1 developer of new construction affordable housing in the country, according to the company. It has put up more than 15,000 units across the South, LDG said, and it has 824 affordable units in Nashville.
Apartment amenities at the Alton Park complex will include an electric range, refrigerator, dishwasher and microwave oven in each unit along with a community swimming pool, business and computer center, dog park and grill area, according to LDG.
Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.