By Douglas Sams and Maria Saporta
Published in the Atlanta Business Chronicle on Friday, August 31, 2012
Prominent Atlanta developer and civic leader Egbert Perry is leading a team that could acquire and redevelop the former General Motors Co. plant in Doraville — almost two years after a similar effort collapsed.
Perry is among several developers that have considered the project, including Houston-based Hines, St. Petersburg, Fla.-based The Sembler Co. and Orlando, Fla.-based New Broad Street Cos.
However, he is the most well-connected locally. Perry is CEO of the Atlanta-based real estate company The Integral Group LLC, a developer of urban mixed-use projects. He is also chairman of downtown business organization Central Atlanta Progress and a board member of mortgage giant Fannie Mae. He also served as a director of Federal Reserve Bank of Atlanta.
Perry confirmed his interest in the project to Atlanta Business Chronicle, and people familiar with the process say he and his team have emerged as the frontrunners to purchase the 167-acre site.
A General Motors spokeswoman would confirm only that the world’s largest automaker has identified a developer.
“We have looked at it,” confirmed Perry, who added that Integral has been eyeing the site for about a year. “We are just one developer of several that have looked at it, and we are part of a team with other members. There’s a lot of work still to be done before we and GM know if this is a deal that we both want to do.”
Burrell Ellis, CEO of DeKalb County, said GM officials suggest they are close to an agreement.
“We believe a deal is imminent,” Ellis said in a telephone interview Aug. 29. “I have been aware that there are a number of development teams that have come to our offices to talk about the site. I’m also aware that GM has indicated to us that they are close to striking a deal with one of those developers, but they haven’t been specific about who it is.”
Perry did say he is working with other development firms, but he declined to reveal the team that could redevelop the GM site.
Integral is working with Cleveland-based real estate company Forest City Enterprises and Atlanta-based Cousins Properties Inc. on two other regional projects: The redevelopment of Fort McPherson, the 488-acre former U.S. Army base midway between downtown and Hartsfield-Jackson Atlanta International Airport; and the redevelopment of “The Gulch,” a collection of blighted parking lots near CNN Center and Philips Arena set to become the home of a multimodal passenger terminal.
Integral remains in the due diligence stage on the GM site. General Motors is asking $60 million for it.
“It is a very attractive site,” Ellis said. “The largest impediment seemed to be that GM was overpricing the site. It’s been difficult to get to a ‘yes’ with some of the developers that GM has been negotiating with.”
Another major issue could involve the environmental cleanup of the site, which operated for 60 years as an automobile plant. “Until you get in there, you don’t know what you’re going to find,” Ellis said of how extensive the environmental cleanup might be.
“To get to closing, it’s going to take a collaborative effort between the city of Doraville, DeKalb County, the state and the federal governments,” Ellis said.
In the past, General Motors has worked to reduce levels of the gasoline additive and known carcinogen benzene in the soil within a small area of the assembly plant. It is unclear if more issues would emerge after demolition.
“The site is pretty old and, as you would expect, has its challenges,” Perry said. “This was a manufacturing plant and we are investigating the environmental issues. Depending on what we find out, that will determine whether we want to move to the next step.”
Still, it appears that a deal is close.
“We think that GM would like to make a conditional decision in a month or two,” Perry said. “Our due diligence has been more intense in the last few months.”
Integral’s pursuit of the GM site comes nearly two years after DeKalb County commissioners rejected a proposal to redevelop the plant using $35 million in federal stimulus funding.
New Broad Street Cos. had planned the project, whose supporters said it would stimulate $360 million in new wages during much of the next decade.
That rejection of the project underscored a few important things about the GM plant: It’s one of the Southeast’s most visible, most intriguing — and most complex — redevelopment opportunities.
It boasts a prime location near the convergence of interstates 85 and 285, a MARTA line and Peachtree Road, and it’s adjacent to DeKalb Peachtree Airport. Those characteristics make it a magnet for developers of transit-oriented projects.
“We want to see the site redeveloped, and we want to see it redeveloped as quickly as possible because of the jobs, the environmental cleanup, the expanded tax base and the overall economic impact for the region,” Ellis said. “It’s even more important now in light of the failure of the transportation referendum.”
Its complexities include delicate political relationships between Ellis and the DeKalb County Commission and between the county and Doraville.
Perry, though, may have the local credibility, deep connections and the political acumen to create a consensus on the project.
Perry has been a pioneer in Atlanta’s urban development. He is chairman of Atlanta Life Financial Group, a 107-year-old African-American-owned company.
He took over as chairman of Central Atlanta Progress in March 2011, and he has been involved in infrastructure projects, including the Atlanta Streetcar.
Ellis praised both the firm and Perry, though he didn’t suggest that Integral is the frontrunner. “Integral is a strong firm with a high capacity and a reputation for doing quality projects,” Ellis said. “They’ve been developing on their own and in relationships with other strong partners.”
General Motors considers the Doraville plant one of its most valuable real estate holdings. It has sold several of the assembly plants it shuttered in the past few years. Several have been redeveloped.
A Wilmington, Del., plant was sold to Fisker Automotive to make electric cars.
A Baltimore assembly plant became a $150 million business park.
The only two plants that GM has closed but still owns are in Sleepy Hollow, N.Y., and Doraville. GM is using CBRE Inc. to market the property.
“We want to create a viable asset for the community that can replace the assembly plant,” said Ryndee Carney, a GM spokeswoman. “For all properties like this, ideally we can establish a mixed-use project.”