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A Nashville developer is planning $40 million in new residential and retail space in one of the largest new projects to date in Chattanooga's hot East Main Street corridor.

Miken Development has bought an 8-acre site at 1601 Holtzclaw Ave. that formerly held a Rock-Tenn facility, said company owner Michael Kenner.

Plans are to put up 120 for-sale residential units and 30,000 square feet of retail space, he said. Work is to start in the spring with plans to deliver the first units by year's end, the developer said.

"Our goal is to come in and do a cool art-centric focused community," Kenner said, noting the site backs up to the Montague Sculpture Park. Kenner said he'd like to see another entrance to the sculpture garden from his property.

The company plans to reuse current vacant structures on the site, he said. The first phase calls for building two-bedroom lofts from 1,400- to 1,600 square feet in size with price points between the upper $200,000s to high $300,000 range, Kenner said.

"We want to take an old abandoned factory and turn it into something new," he said.

At the same time, Kenner said, he plans to meet soon with the city to discuss creating "workforce housing."

"We'll be meeting with city officials in a couple of weeks," he said.

Chattanooga real estate agent Sarah Brogdon said the project will breathe new life into that part of the city, which is located just outside of downtown's core.

"It's going to be really cool," she said, noting the property has been vacant for several years.

Brogdon, of the Brogdon|Horsman team with Real Estate Partners Chattanooga, said she expects the residential project designed by HK Architects to appeal to millennials and young professionals.

"Millennials don't want to live in the suburbs," she said. "They want to be in the mix."

Amy Donahue, director of marketing and communications for the downtown redevelopment group River City Co., said the easier to develop areas around the central city have seen new projects.

"We're at the point now that the easier neighborhoods to transition have happened," she said. "Now, they've got to look at other projects."

Kenner said plans are in motion to rebrand the part of the city that includes his project into the Park Central neighborhood. The first phase of his development will be called the Park Central Lofts.

A second phase calls for building flats and studios and later the construction of townhomes, he said.

Kenner said the red-brick buildings at the site date to the 1930s and he termed the structures "in beautiful shape."

He said his company is the fourth largest in-fill development company in Nashville, though this is his first project in Chattanooga.

"We're looking to develop a nice pipeline in Chattanooga," Kenner said.

The East Main Street area from Central Avenue to Dodds Avenue is seeing an number of new developments with more planned.

Brogdon said many people don't want to sit in traffic for 45 minutes while commuting to work.

"They want to be close to their offices, close to downtown to where the action is."

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.