An extensive renovation of the deteriorating Jaycee Tower will go forward after the City Council on Tuesday approved a 41-year tax abatement.
A number of Jaycee Tower residents in support of the move were at the council session.
Penn Lindsay of Wishrock Development told the council that the long tax break was necessary to cover the length of a 40-year loan for the project.
He said the group is buying the 18-story tower from the Jaycee Foundation for $3.6 million and plans to spend $6 million to fully renovate it for continued use by senior citizens.
The property has never paid taxes. Under the proposal, it will begin to pay county school taxes.
Mr. Lindsay said at least 80 percent of the units will be available to those making 60 percent or less of the area median income.
Rents would be $695 per month for studios and $880 for one-bedroom. The two-bedrooms would actually be cheaper at $800 per month he said, the way the project is set up.
Mr. Lindsay said the tower, which was built along with a second high-rise by the Jaycees in the late 1960s, now has 60 vacant units and most washers and dryers do not work. There are a number of other needed upgrades, he said.
The plan is to convert the current 190 units to 175.
Current residents will not have to move out, but can stay on during the remodeling.
He said he expects that the first floor will be done first, then move up to other floors in succession.
The roof will be fixed and all windows replaced. Each room will get new HVAC units. There will be a medical room added, and a resident program manager will be hired.
The group plans to get housing tax credits as well as the PILOT (payment in lieu of taxes).
The Chattanooga Housing Authority is cooperating in the venture and will hold title to the property, while leasing it to Wishrock.
Attorney Joe Conner earlier said the Jaycee organization did great work for many years, but finally disbanded. He said the Jaycee Foundation is all that is left of the group.
He said the foundation has been trying for a number of years to find a buyer.
Attorney Conner said the $3.6 million sales price is just enough to pay off debts owed by the Jaycee Foundation.
The PILOT goes for 11 years followed by three 10-year renewals. The renewals would be automatic unless the company has defaulted.
Wishrock is in 11 states and is working to add five more, including Tennessee. This would be the first project in Tennessee.