Cookeville council approves first reading of text amendment to allow limited motel-to-multifamily conversions

Cookeville City Council on Thursday approved on first reading Ordinance O260611, a text amendment that would let owners convert existing hotel and motel buildings in the city’s CI (Commercial Industrial) zoning district into long-term multifamily housing through a special-exception review by the Board of Zoning Appeals.

Planning staff described the measure as a narrowly tailored approach that applies only to existing buildings and requires compliance with all building and life-safety codes before occupancy. The ordinance would require participating developments to dedicate a portion of units to affordable housing: at least 20% of units occupied by households earning no more than 50% of area median income (AMI), or alternatively 40% of those units by households at no more than 60% AMI. The draft also permits projects to accept Housing Choice Vouchers and certain project-based vouchers and requires an annual occupancy and rental-rate report to the Community Development Department.

"This ordinance is a text amendment to the city's zoning code that creates a new use called adaptive residential multifamily reuse," Ward of the Planning Division said in his presentation, explaining that the change responds to inquiries about converting older motel properties into long-term housing and is intended to preserve naturally occurring affordable housing while limiting new construction in the CI zone.

Michael Bowie, owner of Homebridge Extended Stay (formerly Fall Creek Inn on Salem Road), testified that his property has operated largely as long-term housing for years and that a multifamily designation would open access to lower-cost financing and allow him to accept vouchers. "If we can now in Cookeville with Putnam County...you are giving hundreds of dollars immediately into these people's pockets," Bowie said, arguing conversion could stabilize the property and materially improve residents' lives. He told council the Fall Creek Inn property has 112 units and said the proposed rent caps and acceptance of vouchers would help households who otherwise cannot afford traditional apartment move-in costs.

Council members pressed staff and the owner about how AMI-based rent caps would map to Cookeville market rents and whether the change would simply reclassify short-term occupants as long-term residents. City finance/tax staff clarified how hotel occupancy and sales taxes interact with continuous stays, noting the city collects occupancy tax on day 1 through day 30 and that sales tax exemptions tied to continuous stays depend on the local rules cited in the hearing. Planning staff emphasized that this measure is a text amendment (not a rezoning) and that each conversion would be considered individually by the Board of Zoning Appeals, which could impose conditions or deny requests.

Several council members said they supported the policy's goals but asked for more concrete financial analysis. One council member asked the proponents to provide a spreadsheet showing how proposed AMI percentages translate into local rents and how financing and tax changes would affect tenants and the owner’s ability to lower rents. "This could be the greatest thing ever, or it could be a disaster," a council member said, urging caution and better numbers before final approval.

The council voted to approve the ordinance on first reading and directed staff and proponents to provide additional data — including rent calculations and financing scenarios — ahead of a second reading so the council can consider possible amendments. The ordinance will return for a subsequent reading and public notice as required by the zoning code process.

What happens next: the ordinance will proceed to a second reading after staff provides the requested financial details and computations; each property seeking conversion would still require a separate special-exception hearing before the Board of Zoning Appeals.

Attribution whitelist for quotes in this article (first reference shown): Chair (speaker 1, SEG 001); Ward, Planning Division (speaker 7, SEG 131); Michael Bowie, owner, Homebridge Extended Stay (speaker 9, SEG 265); City staff—tax/finance (speaker 5, SEG 604).