The former TVA Credit Union Building, located at the corner of Gay Street and Wall Avenue is finally getting the make-over that it deserved. A great example of a good use for its era, the building has long occupied a spot that needed to be activated. Simultaneous to its best use shifting because of the surge in downtown development over the last decade, banking also changed dramatically, requiring far less physical space. This led to the relocation of the TVA Credit Union to 31 Market Square, in July of 2020.
After a false start with a potential sale, the building was eventually purchased, in a deal brokered by Will Sims and Oliver Smith, by Avi and Ilana Zenatti, owners of several downtown properties, as well as Kopita. They have entered a 99-year lease with HD Patel, CEO of Ephant Group. The group is in the process of internal demolition to make way for a multi-use project they hope to open in the spring of 2023. I sat down with Mr. Patel to learn more about his plans.
The Ephant Group includes twenty-two properties in the area, mostly hotels which are under various flags, including Hampton Inns, Comfort Suites, Holiday Inn Express, Marriotts and Hilton, mostly in East Tennessee and eight properties are in the pipeline. The group is shifting focus a bit to hotels either without a flag or only backed by a flag. The first to come online with the new emphasis is Allegory in Gatlinburg.
Their focus is also shifting from the suburban market to the urban market, or the “secondary market to the primary market,” hence the interest in downtown properties. HD said there is more creativity in finding a building and making something special than there is in opening another branded hotel that is much like the last hotel. “Life is too short to only do one thing.” He also said that the market has shifted to boutique hotels.
The new hotel will be an independent hotel called The Sky-Lite Hotel, referencing the massive sky light at the center of the building, and he feels it fits the era of the building. He’s divided the project into those components and sees them as four separate projects. “The building has four elements, the basement, the first floor, the second and third floors, and the rooftop.”
The first floor will be divided into two restaurants and the hotel lobby. One restaurant will face Gay Street on the north side, while the other restaurant will address Wall Avenue. He’s not ready to announce the restaurants, but they are local, and he feels people will be pleased. His original intention was to operate a coffee shop himself, but he was approached by restaurant owners who he thought could bring more to the project.
The hotel and the restaurants will reflect the character and age of the building, built in the 1980’s, with a colorful and fun vibe. The hotel will offer valet parking on Gay Street. An entrance between the two restaurants will lead guests to the check-in on the western side of the atrium, which will remain open. The second and third floors will ring the atrium with two rooms all the way around, for a total of sixty-five rooms.
“I want to create a landmark on Gay Street.” He was approached by a chain restaurant, and he turned them down, even though the deal would have been very lucrative. He said he doesn’t want the restaurants or anything about the project to resemble anything already available downtown. He’s studied the market to see what is missing and he thinks this will help fill some of the gaps.
He wants the rooftop to equally as fun as the rest of the project and he wants it to be different from any other rooftop experience currently available in the downtown market. He wants a high-energy, fun atmosphere. It will be more urban, with hip-hop and other music. He said the rooftop is perfect for what he has in mind. He’s in talks with Aaron Thompson and Jessica King, owners of Brother Wolf and Osteria Stella to own and operate a business there. Like the restaurants on the first floor, it will be a separate business.
The plans for the basement are not set and that will be a project for after the rest of the building has been completed. Demolition is underway and HD expects the build-out to start in February, with a March 2023 target for opening the restaurants and the hotel.
He’s very excited about downtown and is looking for other opportunities. He’s already made a couple of moves I’ll tell you about soon. For now, he says he has been helped by a number of people and he feels very blessed. Of the TVA project, he says, “It is going to be a legacy project.”