By Maria Saporta
The City of Atlanta is moving forward with plans to sell City Hall East to Jamestown Properties.
Atlanta Mayor Kasim Reed broke the news at a community “town hall” meeting Thursday evening at the Inman Middle School.
“We signed a letter of intent with Jamestown this afternoon for City Hall East,” Reed told those attending the Alliance for Intown Neighbors at the tail end of the session.
The letter of intent calls for Jamestown Properties to pay the city $15.5 million for the property. The agreement will go before the Atlanta City Council for approvals in the next couple of weeks.
One person familiar with the negotiations said that a number of policy issues will need to be changed in order to make the deal work. Also, as a condition of the sale, the project will need to receive federal historic tax credits in order to make the numbers work.
It the project jumps over those hurdles, then the sale is supposed to close by the end of year.
City Hall East originally was built as a Sears mail order warehouse and department store between Ponce de Leon Avenue and North Avenue in 1926.
Then Atlanta Mayor Maynard Jackson arranged for the city to purchase the vacant structure in 1991 for $12 million. At the time, Jackson called it the “deal of the century.”
The City moved several of its operations and departments to the building, but it ended up being a costly structure to maintain. Also, the basement would flood during rainstorms because the building had been built over a line of natural springs that included the now paved-over Ponce de Leon Springs (also once considered Atlanta’s Fountain of Youth, hence the name of the avenue).
Finally, as a way to stem the costs of operating the building and as a way to get new revenue into the City’s coffers, City Hall East was put on the market and then Atlanta Mayor Shirley Franklin sought proposals from various developers.
Then in 2005, the City reached an agreement to sell the 1.2 million square foot building to Gwinnett developer Emory Morsberger for $27 million.
But when the economy started to go South, those projects plans were put on hold. And about 18 months ago, Morsberger entered into conversations with Jamestown about becoming a partner in the project.
As Morsberger had envisioned the mixed-use development, it would have been dominated by residences — condos and apartments. But when the housing market tanked, Jamestown has since revised the project proposal to place more emphasis on retail.
The City also is building out the Fourth Ward Park just south of City Hall East. It has a large water reservoir that will capture most of the storm water in the area and help prevent future flooding in the building’s basement. Both the park and City Hall East are strategically located on the Northeast section of the Atlanta Beltline.
When Reed let it slip out that he had signed a new letter of intent to sell City Hall East, representatives from the various intown neighborhoods broke out in applause.