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B. Allen Casey, Jr. did a double-take when he spotted the tiny article in a Chattanooga newspaper in 1971. “Southern Railway is now taking bids to demolish the old Terminal Station. The lowest bid to come in so far is $100,000.”

Casey, a real estate developer who had been toying with the idea of building a new downtown hotel, headed for the neglected train station.

Sizing up the depot, which opened on a cold December day in 1909 and closed in the summer of 1970, Casey found buildings laced with cobwebs, boarded-up windows and doors. But he saw something else.

“I said, `Gee, this would make a fantastic entertainment complex,’ ” he said. “I didn’t know it had the highest free-standing dome in the world; I didn’t know the history behind it all. I just knew that I’d never seen a brick arch like that before. Immediately I thought of the song `Chattanooga Choo-Choo,’ and I wanted to save the building right then and there.”

Casey finagled a meeting in Washington D.C. with the president of Southern Railway. He was given only five minutes to make his sales pitch.

“I’d like to save you $100,000,” he began. “If you’ll give me the old Terminal Station, you won’t have to demolish it. And I’ll pay you the appraised value of the 24 acres around it. I want to build a hotel and restaurant there and call it the Chattanooga Choo-Choo.”

Without hesitation, the railroad executive reached across his desk, buzzed his secretary and summoned his vice presidents.

“Gentlemen,” he said, raising an index finger. “This is going to be the greatest public relations strategy we’ve had in a long time. One week ago, we dynamited Birmingham’s beautiful railroad station (in Alabama), and here on my desk are 80 letters condemning Southern Railway. I want you to give Mr. Casey whatever he needs.”

In less than a month, local investors spearheaded by Casey raised $2.5 million in private funding.

Then they acquired a matching bank loan, and restoration began on what was once the city’s main passenger terminal.

The 85-foot dome in the main lobby, hidden for a decade by a false ceiling erected to cut heating costs, was refurbished in rich golds and soft yellows.

The complex was named for one of the city’s first trains (though, by some accounts, there was never a train or rail line called the Chattanooga Choo-Choo). A new hotel was built, and plans were drawn up for a Southern-style gourmet restaurant.

But one thing wasn’t right. A feasibility study showed that the 100-room hotel under construction needed more space to accommodate the expected number of visitors.

“We didn’t want to add another floor,” Casey remembered. “So I called the railroad again and said, `You got any old railroad cars for sale?’ “

Casey started buying abandoned sleepers from stations in Pennsylvania, Ohio and Indiana.

All but one of the 24 cars cost $5,000 each; another $5,000 each was allotted for brake parts and other repairs. The prize vehicle, discovered at an Indiana rail yard and purchased for $10,000, was the Wabash Cannonball club car, which once traversed the line between Cincinnati and Chicago.

The train cars were gutted and divided in two with soundproof petitions, and the 48 rooms were furnished with brass beds, marble baths and red velvet curtains. On opening day in 1973, the cars were unveiled, each bearing a plaque with the name of one of the 24 Choo-Choo investors.

“One man said if I’d told him he was gonna have a railroad car named after him, he’d have given me another $100,000,” Casey said with a laugh.

The Chattanooga Choo-Choo was an instant success. The first year, more than 1 million visitors, many lured by the prospect of sleeping in a vintage rail car, swarmed to the attraction.

“It was 100 percent occupancy every single weekend,” Casey said. “People were calling six months in advance trying to get a train car. So it was just one of those lucky flukes that caught on, and it has made the complex a very profitable and strong company.”

Over the years, the Choo-Choo has drawn a number of high-profile guests, including President Gerald Ford, the pop-singing duo The Carpenters, fitness guru Richard Simmons, comedian Bob Hope and dancer Mikhail Baryshnikov. Eccentric pianist Liberace insisted on staying in one of the 10-by-40-foot cars instead of the spacious presidential suite.

One February day, an ice storm froze the plumbing in the uninsulated sleeper cars. But a pair of newlyweds was determined to tough it out.

“Sorry, but it’s just too cold,” the Choo-Choo managers argued. “We can’t let you do it.”

“But we’ve just got to stay there,” the young woman pleaded. “This is our honeymoon. We came here instead of going on a cruise because my husband loves trains. We don’t care how cold it is.”

An hour later, the couple returned to the check-in desk and asked, “You still got that warm room?”

“We didn’t know whether they had had a fight,” Casey said with a laugh, “or if they were freezing to death.”

Today, there is still a long waiting list for the sleepers.

“Tourists with several children will tell us they’ll bring sleeping bags and sleep on the floor just to get to stay in a rail car,” said Choo-Choo marketing director Julie Dodson. “People do it just for the experience.”

One reason is that the vintage vehicles give guests a taste of a turn-of-the-century era, when traveling by private rail car was a luxury rerserved for the rich. In this setting, it’s not hard to imagine the heyday of Terminal Station.

By the time the $1.5 million depot was erected on the site of the former Stanton House (a swanky, five-story hotel with “a bathroom on every floor”) in 1909, Chattanooga had outgrown several train stations.

“Within a comparatively short while, Chattanooga can boast of one of the handsomest terminal passenger stations to be found in this section of the country,” declared an article in the Aug. 31, 1907, Chattanooga Star.

Terminal Station was constructed of steel and concrete and buttressed by huge arches made of expensive, 28-pound bricks. The gilded lobby featured a dome, skylight and exceptionally high ceiling with brass chandeliers, all designed by famed New York architect Donn Barber.

Unlike the stations in nearby Birmingham and Atlanta, this one was built on one level, with no stairs needed to reach the 50 or so trains arriving daily from Chicago, Cincinnati, New Orleans, Washington D.C. and other cities east of the Mississippi River.

For decades, crowds filled the spacious lobby and gaslight-lit concourses. For many travelers, including Presidents Woodrow Wilson, Teddy Roosevelt and Franklin D. Roosevelt, the station was an introduction to Chattanooga.

By the 1960s, however, auto and air travel had eclipsed the railways. The Birmingham Special made its last run through Chattanooga Aug. 11, 1970, and Terminal Station was shut down.

Ten years ago, board members were unable to renegotiate a high-interest loan incurred to pay for expansions in the early 1980s. When the bank demanded repayment in full, the Choo-Choo filed for Chapter 11 bankruptcy and stockholders voted to bring in a new management team.

The complex was acquired by an investment group who renovated it and modernized the rail cars.

“The gold wallpaper and red velvet curtains were pretty tacky,” Dodson said. “When this management first took over, we totally gutted all rail cars and replaced the furniture because it looked like early bordello. It had to be updated.”

Despite the somewhat cramped space, lack of closets and unassuming decor, many guests still prefer the rail cars to the larger rooms and amenities of the Choo-Choo’s Holiday Inn.

According to Dodson: “We get comments like, `It was just like being on an old train; the only difference was that we didn’t move. We just imagined the clickety-clack of the rails.’ “

For information, call 800-872-2529 or visit the Choo-Choo’s Web site at www.choochoo.com.

LETTING THE GOOD TIMES ROLL

The melodically challenged need not apply at the Chattanooga Choo-Choo’s most popular restaurant, The Station House. Here, a dozen or so waiters croon ballads, belt out rock ‘n’ roll and bring down the house with gospel.

“I think people are surprised when they go in there ’cause they think the waiters are going to come around and do karaoke or mime the words,” said Julie Dodson, the Choo-Choo’s marketing director. “And when they hear these people, they’re just bowled over.”

The Station House, in the rail station’s baggage room, is billed as “the only family showroom of its kind in the South.”

For an elegant contrast, guests can relax in the Old World-style ambiance of Dinner on the Diner, a vintage Victorian dining car overlooking the award-winning rose garden in the former train yard. Frosted globe lamps, fresh flowers, china, crystal and starched linens serve as a gilded-age backdrop for dishes freshly prepared by chef Michael Jenkins. Specialties include Maine lobster bisque, maple brandied breast of duck with mashed sweet potatoes and pan-seared New Zealand rack of lamb with Creole mustard. (The menu changes every eight to 10 weeks.) Jenkins relies on gourmet vegetables and herbs from the “secret” garden behind the Holiday Inn.

The Choo-Choo, which was placed on the National Register of Historic Places in 1973, offers three other restaurants–The Gardens, a full-service eatery with a view of tulips, roses and geraniums; the Silver Diner, a ’50s pizza car; and Cafe Espresso, a 1930s-style coffee and sandwich shop.

In 1997, the formal rose bed became the third in Tennessee to be designated an All American Rose Selection Garden. A copper-roofed gazebo stands over 500 varieties of roses, including the Choo-Choo Centennial, a miniature selection commemorating the anniversary of the first train to pass through Chattanooga in 1880. There is also a water garden, a butterfly garden and a moonlight garden with roses, perennials and annuals in shades of white.

In the Model Railroad Museum, a 3,000-square-foot display features 1,000 tiny freight cars re-creating Chattanooga’s railroad history.

Visitors who would rather stay on the move can ride the Choo-Choo’s open-air trolley, built in 1920 for use on Canal Street in New Orleans. Homer Summers, who worked in the railroad business for almost four decades, has operated the red-and-yellow streetcar for seven years.

“I enjoy this more than any job I’ve ever had and hope to be there for years to come,” says Summers, 81. “I’m dealing with youngsters who perhaps have never seen a streetcar, much less ridden one.”