Staff Photo by Robin Rudd / Tennessee's Moccasin Bend Mental Health Institute in Chattanooga could be in store for a $276.52 million transformation. The Institute was photographed on Nov. 16, 2021.

Tennessee state officials say they are committed to replacing the 61-year-old mental hospital on Moccasin Bend with a larger, more modern treatment facility to help address the growing mental health needs in the 52 counties served by the state facility.

But where exactly the state's new 200-bed mental hospital in Chattanooga will be built is yet to be determined.

Gov. Bill Lee has proposed in his budget plan to use part of the state's share of federal American Rescue Plan funds to build a $276.5 million mental health hospital in what will be one of the largest state building investments ever in Chattanooga.

Tennessee has previously rebuilt similar mental health hospitals in Memphis and Bolivar, but in Chattanooga at the urging of Mayor Tim Kelly and local lawmakers the state has agreed to consider alternative sites.

"We do believe there may be a more cost-effective way to do this, but we have not settled on the final way we are going to do that," Tennessee Mental Health and Substance Abuse Commissioner Maria Williams told reporters Friday after meeting with legislative and mental health leaders.

The city of Chattanooga has proposed three different sites for a new mental health hospital to be built on and has offered to participate with the state in a leaseback arrangement to cut the costs of building and operating such a facility. The city has offered its own 12-acre parcel adjacent to the city's Wellness Center on 11th Street as well as proposing the former Buster Brown facility at 2001 N. Chamberlain Ave. and a site next to some city property owned by Grace Media at 1511 Citico Ave.

The proposed sites are closer to Chattanooga's major hospitals and medical facilities and are along public transit routes. Relocating the psychiatric hospital also would free up the historic riverfront property to help complete the historic Moccasin Bend National Archaeological District.

The new mental health hospital would expand the number of beds from 165 to 200 and provide bigger spaces and security for the assessment and treatment of different mental health populations.

Williams said the state's previous moves away from institutionalizing so many mental health patients have helped, but the number of people with mental health problems of all sorts continues to grow.

"This [new hospital) is much needed," House Speaker Cameron Sexton said after touring Moccasin Bend on Friday. "We have a mental health crisis in America and we need to have more capacity and a better operational unit."

During the pandemic, Williams said reported instances of substance abuse, anxiety and depression rose 45%.

"I've been in the Legislature for eight years talking about the need to deal with Moccasin Bend, and I'm excited that at this point I really think we're making progress to make a meaningful change that will impact the lives of people in these counties," state Rep. Patsy Hazlewood said Friday.

Hazlewood, the chair of the House Finance, Ways and Means Committee, said she is still undecided on the best location for the new hospital.

"If we can go somewhere else for less cost for the taxpayers, that would certainly go a long way in our decision making," Hazlewood said.

Contact Dave Flessner at or at 423-757-6340. Follow him on Twitter @dflessner1.