Photo Gallery Downtown Chattanooga hotel, condominiums in $88 million project View 6 Photos

The developers of a Westin Hotel in downtown Chattanooga say they plan to spend about $88 million on that project, new condominiums, a high-end restaurant, office space and other work in a three-block area.

Defoor Brothers Development also is helping fund a sizable streetscaping project near the Pine Street and M.L. King Boulevard hotel to create a festival atmosphere, though some business operators on Chestnut Street are concerned the 800 block will close to cars for up to 15 weeks.

The investment, one of the biggest ever downtown, will transform the area around the 261-room Westin that's under construction in the landmark Gold Building, said Byron Defoor, a principal in the local group with brother Ken Defoor.

"It's like a city icon," Byron Defoor said about the John Portman-designed former BlueCross BlueShield of Tennessee headquarters the group bought in 2010. He said 18,000 square feet of convention space will be added to the 10-story structure the brothers decided to improve rather than tear down.

A Shula's Steak House is to open across from the 10-story hotel in the former Gilman Paint headquarters building at Pine and Eighth, Byron Defoor said.

Also, 18 condominiums will go into that building's top three floors with the one- and two-bedroom units ranging from $280,000 to $640,000 each, he said.

In addition, the brothers bought the former Pioneer Bank Building at Eighth and Chestnut and moved their offices into the structure, along with a pair of related companies, the developer said.

He said the streetscaping will include cobblestone-like pavers and potentially offer a fountain at Eighth and Chestnut where weekend markets and other events can be held.

"We have big plans for the common areas," said Defoor, adding they're looking at routinely offering a 30-second fireworks show and releasing doves from a nearby building to mark the beginning of weekend activities in the area. "We want to make it very family-oriented."

Kim White, who heads the nonprofit downtown redevelopment group River City Co., said the Defoors have crafted plans for the area for a long time.

"They don't do anything small," she said. "They had been out in the suburbs. When they drank the downtown Kool-Aid, they drank it big-time."

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White said the work will "totally transform the energy and vibrancy" of that part of downtown, which she noted is a major central city gateway and has lagged in the years since BlueCross moved across U.S. 27 to Cameron Hill.

She said the Defoors' plans fit with the city's proposed $10 million remake of the M.L. King district, including a major overhaul of Miller Park.

The Defoors have a long history of development in the county, ranging from offices to condos to the Embassy Suites hotel in East Brainerd. They're also developing the Waterside lifestyle center where the hotel sits, joining recently with an Atlanta company to spur new retail and housing there.

Byron Defoor said the Westin is to open next spring along with the restaurant, which is aimed at appealing to hotel clientele. Defoor Brothers and local real estate broker Fletcher Bright Co. plan to kickoff a WTCI-TV fundraiser at the end of September when the streetscaping is to be complete.

Blythe Bailey, administrator for the Chattanooga Department of Transportation, said the city plans to handle the streetscaping of Eighth Street to Chestnut and potentially to Broad Street. He didn't immediately know the cost, though the Defoors are spending about $850,000.

"More people are moving downtown. There are a lot of things happening," Bailey said. "These projects get more use of a street. We're not modifying how it works but it feels more like a plaza."

Larry Jackson of Figgy's Sandwich Shop on Chestnut said the work may slow down business.

"I have a lot of foot traffic. Some people drive up," he said. "Right now, I'm holding my breath. It's not going to be positive on the retailers down here now."

Don Elsea of Financial Management Network, also on Chestnut, said his business plans to move in about 30 days to another location.

"It's going to be tough on businesses" in the short term, though it might help bring more tourists to the street.

Bailey said the city is trying to minimize inconvenience. Defoor Brothers, which owns the Chestnut building where many of the business are located on the street, is trying to move non-retail ventures elsewhere. Ultimately, they want to fill that space with restaurants and other retailers which may fit the street better after the hotel and condominiums open, Byron Defoor said.

Contact staff writer Mike Pare at mpare@timesfreepress.com or 423-757-6318.