The East Ridge City Council on Thursday night approved the rezoning for a $27 million hotel and water park near Interstate 75.
Roshan Amin, the CEO of Dynamic Group, told the council that his development group intends to invest $27 million in the hotel that will fly the Marriott flag. The project, which includes a 25,000 square-foot indoor water park, would generate $10 million a year in taxable revenue and spur new development in the city.
A public hearing on the rezoning at 730 Frawley Road was held prior to the council voting on first reading of the ordinance.
More than a dozen residence who may be affected by the rezoning were in attendance. However, only Jeff Ellis, who lives on a hill above the proposed project, addressed the council.
Mr. Ellis had several requests of the developers that ranged from burying a small stretch of power line that dangles five-feet off the ground on the project site, to possibly installing turn lanes on Ringgold Road to facilitate traffic flow in the area.
Mr. Ellis said that he was concerned about noise coming from the water park and opportunistic criminals breaking into cars at the facilities' parking lot.
Tommy Massingale, who is working in conjunction with the Dynamic Group, told Mr. Ellis that the water park would be an indoor facility and that it was in the best interests of the business to keep noise levels low to accommodate hotel guests. He also said that in addition to the parking lot being monitored by surveillance cameras, it would be patrolled by a security guard.
Vice Mayor Larry Sewell, who was running the meeting as Mayor Brent Lambert was absent, told Mr. Ellis and others in the audience that this ordinance simply rezoned the property. There would be additional opportunities, he said, for public input as the development moves forward.
The vote to rezone was 3-0, as Councilwoman Esther Helton was also absent from the meeting. A second reading of the ordinance is required for the rezoning to be finalized.
The developer planning a Marriott and a water park earlier said the Exit One LLC group was trying to kill the project.
Mr. Amin, in remarks prepared for the council, said that the firm that was given a no-bid contract to develop land around Camp Jordan insisted on terms that made it unfeasible to build the project at that site.
He said the group then found the location on Frawley Road, but he said he was advised that Exit One LLC was also opposing that.
Mr. Amin said, "I was scheduled to speak to the City Council about the details of our project this evening - a Marriott hotel and indoor water park at Ringgold and Frawley Roads - which received zoning approval from the East Ridge Planning Commission a few weeks ago. In just the last two days, however, we have heard that members of the Exit One LLC development group are opposed to my project. In light of this, it seem my time should be spent defending our development team, instead of talking about the details of our project.
"After we heard about the East Ridge/Exit One, LLC project from one of its members, both parties spent several months organizing a development agreement for the construction of a hotel on the Exit One LLC site. After months, both parties came to an agreement to develop a Marriott branded 88-room Towne Place Suites Hotel.
"During the due diligence period, it became apparent that the $800,000 per acre price tag that the Exit One LLC members required was exorbitantly higher than any comparable real estate in the area. This issue was compounded by the terms of the purchase which was structured as a 99-year lease that would increase substantially in 2042 when the Border Region Tax Incentive expires. Additionally, and perhaps most egregiously, over the course of 12 months, Exit One LLC pushed our site location to the absolute rear the overall site, pushing our project much further from the interstate.
"During this extended stalling period, we were able to flesh out some additional ideas to enhance our overall project by bringing an amusement and/or theme park to East Ridge. Our investors and development team loved the idea and we began to push hard for both projects at the Exit One LLC and Exit One II, LLC sites.
"Unfortunately, as we continued to tweak our business plan and engage investors, it became clear that leasing a site at such an exorbitant price was no longer fiscally sound. In short, the lease term, increased construction cost, and the drawn out pre-development period rendered the project impossible. In addition, Exit One members had made it abundantly clear that a hotel was not on the top of their agenda, as it was on ours.
"Since we had already made a commitment to Marriott to develop a Towne Place Suites, my partner in Atlas Land & Development, Tommy Massengale, found a new site at 730 Frawley Road, and we applied for a site change with Marriott, which is now approved. Marriott is supportive of the new location, an increase in the room count to 104 rooms, and the plan of an indoor water park adjacent to the hotel. We are back on track!
"After the new project site was located, we worked hard as a show of good faith with the Exit One LLC members and offered to bring a different hotel, a Marriott FourPoints, to their site. The reality is that I wanted to bring a second new Marriott hotel to East Ridge. The newly re-branded Marriott FourPoint Hotels are absolutely stunning and feature a Lobby Bar, generating additional tax revenue and profit for the Exit One LLC members. However, this proposal was rejected.
"Now I am hearing that they are opposing my project as it exists now. I want to say to the members of the City Council and the citizens of East Ridge that we are doing exactly what a good developer and a good steward to the community should do. We are Tennesseans and we choose to live, work and play in our community. We will create 100 permanent new jobs with this Hotel and Water Park. We will raise the bar for hotels in East Ridge and the entire East Ridge commerce market, which will encourage visitors of Camp Jordan and East Ridge to stay in East Ridge instead of going to Shallowford Road, Ringgold, or downtown Chattanooga to sleep.
"We believe our project offers the City Council an opportunity to bring another big win to East Ridge by saying yes to a developer with a proven track record of delivering. Our project will bring $27 million of investment into the community, throw off $10 million in taxable gross revenue annually, increase property taxes received by the community and create new revenue for convenience stores, gas stations, restaurants, and small business as East Ridge continues to thrive, including the Border Region Tax Incentive to the City from the sales taxes received by the State of Tennessee.
"We want to be in East Ridge. However, if the City Council bows to pressure from Exit One LLC members, and says no to our project, we will be forced to find site options outside of East Ridge.
"We are the developers you want in your community. We have more plans to continue to grow East Ridge the right way. We take action and show results. If the City approves, we intend on commencing the Hotel construction in the summer of 2019 and starting the water park around the same time. The water park could lag about six months behind the hotel, but they are both scheduled to open in 2020.
"We are excited about this opportunity and look forward to adding value to our community. We hope the members of the City Council see the value of what we are planning to do for East Ridge. Up to this point, we have been treated very fairly by the city of East Ridge and its officials. We ask that you consider our project based on the tremendous benefits it will bring to the city, to its people and to the other businesses here."
The East Ridge City Council several years ago obtained idle land near Camp Jordan from TDOT for $130,000. That was transferred to Exit One LLC for the same amount paid by the city for the land, which now holds a Bass Pro Shop and other businesses.
Exit One LLC includes Matt and Ethan Wood and John Healey.
The council passed on first reading an ordinance to rezone the property at 6750 Ringgold Road to C-2 (general commercial) to allow for construction of the new home of Southern Honda Powersports. There was no discussion.
The council passed a resolution to move forward with obtaining a loan and issuing bonds in the amount of $2.3 million. The money will be used for improvements to Camp Jordan Park.
In regard to the city borrowing the money, Councilman Jacky Cagle asked City Attorney Mark Litchford about a state statute that allows citizens to potentially stop the city from taking on too much debt.
City Attorney Litchford cited the statute which allows citizens to circulate a petition requiring 10 percent of the registered voters to sign it within 20 days of the city passing the measure. The petition would then go to the Hamilton County Election Commission and a special election would be held. If the majority of voters cast ballots against borrowing the money, it would stop the action of the city to issue the bonds.
Councilman Cagle said in light of that information, he would vote in favor of the resolution. His fellow councilmen joined him in passing the measure.
The council passed without discussion an ordinance that would permit the city to move forward with the construction of a new communications tower behind the Fire and Police Services Center. The Motorola communications tower would provide public safety officers in East Ridge better coverage on its radios. Cost of the tower is about $900,000.
The council approved on final reading an ordinance that permits narrower lots in a subdivision being built in the 500 block of Frawley Road. The narrower lots will allow the developer, Bharati Desai, to build 40 additional homes in the subdivision.
The council passes a resolution approving a bid by Talley Construction for road resurfacing. The city intends to resurface 18 streets in three phases, said Assistant City Manager Kenny Custer. The cost of the project is not to exceed $705,000.
The Council took no action on a tabled resolution that would commit the city to building a field house at Raymond James Stadium at East Ridge High School. Mr. Custer told the council that football coach Tim James is looking at alternate designs for a multi-use building and is considering new fundraising efforts by the alumni association to help defray costs. The council said it anticipates revisiting the measure in February of 2019.