KING STREET LOT NEEDS FAIR PRICE
It appears a potential $60,000 loss by the city of Chattanooga on a parking lot in the burgeoning Southside won’t be the last word on the property.
The Chattanooga Downtown Redevelopment Corp. (CDRC) agreed Monday to accept a proposal by developer Hiren Desai for slightly more than a half-acre parking lot at 1200 King St., which the city bought a decade ago for $195,000, but the board agreed to negotiate a contract with the developer based on the property’s fair-market value and not on its assessed value — and what Desai had bid — of $134,700.
“We don’t even know what the final price and the lease agreement would be,” said Stacy Richardson, a CDRC board member and chief of staff for Chattanooga Mayor Andy Berke. “Just because we approve this today doesn’t mean the property is sold.”
Desai and co-developer Jimmy White want to turn their adjacent six-story storage building into a commercial development that could include upper-floor apartments, a microbrewery and other first-floor commercial lease space. The parking lot also would be adjacent, on the other side, to a four-story, 108-room hotel that Desai and White plan to build on property they already own at the corner of King and Market streets.
In January, Desai told the Times Free Press, he hoped the city would lease him the parking lot for a nominal feel. At the time, he said he had told city officials, “If you don’t give it to us, we’ll just keep it as a storage building.”
In other words, the storage building wouldn’t generate jobs, development costs and any taxes that would come out of that development.
Currently, much of the parking lot is used by city employees of the Development Resource Center across King Street from the lot. Desai’s original offer had the city, after the sale of the lot to him, leasing parking spaces on the site back from him for $140,000 for three years.
The next step in the process, officials said, will be to get an appraisal for the property, so its fair-market value may be determined. Only then can a sale price and/or parking lease for the property be completed. And that deal must be approved by the CDRC.
While we would like to see the block better utilized with the planned hotel and the commercially developed storage building, we don’t want the city to take a big loss on the property and then have to lease back parking from the new owners of the parcel. But it appears for now, at least, that future taxes on the property and the negotiated price on the fair-market value of the land will keep the deal from being as questionable as it first appeared it might be.