Staff file photo / The Clemons building holds 54 apartments and has an entrance on West Eighth Street.

ABOUT THE BUILDING The Clemons building at 730 Chestnut St. was raised in 1918. It was long known as the Clemons Bros. furniture manufacturing and sales building.

A 100-year-old downtown Chattanooga office building updated just two years into apartments likely will be turned into a boutique hotel by its new owner in a multimillion- dollar project.

"There's a high likelihood," said Philip Bates, managing partner of Irvine, Calf.-based TMC Group, about transforming the 54-unit apartment complex known as The Clemons Lofts into a hotel.

Bates said the real estate company is looking at putting 80 to 100 rooms into the six-story, brick building at the corner of Chestnut and West Eighth streets.

Residents of the apartment building have been notified that their leases won't be renewed, he said, adding the company is working with local groups to find other living arrangements for some people.

"First we need to handle things on the residential front. When people's leases expire, we'll start to renovate the units and convert them," Bates said.

He said work could start on the transformation in late summer with an opening of the hotel early next year. Bates said it's too early to say if the hotel will be affiliated with a brand or to discuss room rates.

But, company officials like the building's location on the edge of what has been dubbed the "West Village" — a several block area anchored by the new Westin hotel along with eateries and shops.

"We see a lot of synergy there," he said. "There's more and more energy in that area."

David Keo, who has lived in The Clemons for about six months, said Friday he received a notice related to his lease, but he's not worried because he has been looking for a house anyway.

Keo said he understands the reasoning behind the hotel, citing the building's location about a block away from the Westin.

"There's a lot of events going on," he said.

On weekends, the streets near the hotel close for a laser light show and there's live music, food trucks and beverage vendors.

"We're hoping to add to it," Bates said.

He said plans are to keep commercial space on the building's ground floor.

"We're working with local tenants to have a cool offering there," Bates said.

Keeli Crewe of the area61 art gallery said she's negotiating to lease space in the building.

She said the gallery closed its location on the Southside with the intention of moving to that part of downtown.

Melinda Thomas of Epic Optical, which is located on Eighth Street in The Clemons, said the office plans to remain.

"We really like the building," she said, though it attracts people who live in the apartments as patients.

Bates said that TMC Group likes the Chattanooga market and the building, which it acquired in February for $10 million.

"It's one of the most charming buildings we've seen," he said about the structure that holds original brick, floors, and columns.

Another boutique hotel, The Edwin, by Chattanooga-based Vision Hospitality Group is expected to open soon with 90 rooms near the Walnut Street Bridge. Also, the Moxy, a four-story, 102-room boutique hotel, is under construction at King and Market streets.

Bates said the company is working on another project in downtown Nashville where it hopes to open a boutique hotel.

"We buy and we're long-term holders," he said. "We go into cities where we see long-term potential."

TMC Group bought the structure from locally based ViaNova Development. That company started in the fall 2014 on the building and completed it in 2016, coming in under its $7.5 million budget, officials said.

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