Underground Atlanta to be sold for $25.75 million to S.C.-based WRS Inc.

By Maria Saporta

Atlanta Mayor Kasim Reed is planning to make an “important economic development announcement” Wednesday morning at 10:30 a.m. – reportedly to announce the sale of Underground Atlanta, according to people close to City Hall.

The buyer is WRS Inc., a real estate investment firm based in Mount Pleasant, S.C. near Charleston. It is thought that the city has the property under contract for $25.75 million. The iconic property that is adjacent to the Five Points MARTA Station.

The plan is to develop the upper levels of the property into a mixed-used complex that includes housing and retail.

“We think it’s ground zero in Atlanta – the zero mile marker truly is right there,” said Scott Smith, president and CEO of WRS Inc., said in a phone interview on Tuesday. “There are 32,000 students a half block away. There are 110,000 people coming downtown everyday. There’s steady income from the government sector down there. The vacancy factor in multifamily is 1.2 percent. With having that many people down there, our whole belief to make Underground successful is that you have to have people there day in and day out.”

Mayor Reed, in an interview with the Atlanta Business Chronicle in late September, said he was in the midst of negotiating a deal with a buyer who would transform Underground Atlanta into a high-density development above ground. At the time, he had expected the announcement would have been made by Dec. 1.

He said the buyer, which he did not disclose at the time, would be making a total investment of between $100 million and $250 million in the development.

“The vision is to turn Underground into a residential living room,” Reed said, adding that the developers planned to “keep most” of what is now known as Underground. “It would have a different feel. When you get to Five Points, it should look and feel completely different than it does today.”

During the interview, the mayor said the project would not be geared toward Georgia State University, and that it would be a “higher end” development than one targeted toward students.

The press briefing will be held in the Mayor’s Ceremonial Office.

Maria Saporta, Editor, is a longtime Atlanta business, civic and urban affairs journalist with a deep knowledge of our city, our region and state.  Since 2008, she has written a weekly column and news stories for the Atlanta Business Chronicle. Prior to that, she spent 27 years with The Atlanta Journal-Constitution, becoming its business columnist in 1991. Maria received her Master’s degree in urban studies from Georgia State and her Bachelor’s degree in journalism from Boston University. Maria was born in Atlanta to European parents and has two young adult children.

8 replies
  1. Burroughston Broch says:

    I t will be interesting to learn (1) how much of the purchase price will be left after the remaining bonds are retired and (2) what other inducements were given to the purchaser. This may be similar to IBM recently paying $1.5 billion to Global Foundries to take IBM’s old chip fab plants off their hands.Report

  2. atlman says:

    Burroughston Broch
    Despite your hopes otherwise, a recent update by Tom Pendered shows that Atlanta will actually make several million off the deal, in addition to no longer having to pay the last two loan payments on the property. This will be yet another deal that brings more residents, businesses and revenue into Atlanta. And the new development will mean an increased police presence in the vicinity also.
    So Fort McPherson has a buyer, Turner Field has a buyer (Georgia State) and Underground has a buyer. All that remains is the Civic Center. After those are done, addressing a big chunk of the infrastructure backlog will be well on its way. Add that to practically rescuing MARTA to the point where now the state GOP leaders now want to force their way into it as well as getting the pensions issue under control incidentally.Report

  3. Burroughston Broch says:

    atlman Burroughston Broch I will be pleased when the  Underground Atlanta millstone is loosed from the necks of the City’s taxpayers. It has been a financial drain for years. It should have been sold years ago.
    Why do you expect the Underground sale to bring increased police presence in the vicinity? There is little to none now, as the streets around 5 Points Station show.Report

  4. Guest says:

    You have no idea what you are talking about. The City is paying $8.8 million to buy out Dan O’Leary’s lease, so the City is basically making nothing on the Underground deal. Fort Mac is also being given away for a dime to one of Reed’s buddies.  Turner Field is not “done”, despite your “Kool-Aid” assertions. By the way, Reed lost the Thrashers and the Braves on his watch, if you did not notice. The BeltLine TAD is insolvent, and cry-baby Reed refuses to accept that absolute failure on his watch. Pay APS Reed, or go to jail. Actually, rumors are flying that Reed will soon be indicted by Sally Yates over the Hartsfield shenanigans.

    $250 million of at least a $1 billion infrastructure backlog is hardly a “big chunk”.  What has this Mayor been doing the last 5 years, besides getting people pregnant, going on Meet the Press and taking multiple boondoggle trips around the world as if he is some self-appointed ambassador? 
    Atlanta’s very own Idi Amin. And don’t forget his first name, Muhammad!Report

  5. atlman says:

    @Guest atlman
    1. The city is paying $8.8 million to buy out the lease? That is fine. It still leaves $1.2 million plus not having to pay the $3 million annual tax/maintenance/security costs, as well as getting private development down there instead of crime and blight. Win for the city.
    2. The Turner Field decision is not “done” only because the Braves have not yet officially abandoned it yet because they want to wait until the new Cobb County stadium is done. When the Braves make their intentions to leave Turner Field official on Tuesday, the deal with Georgia State and private developers gets announced on Thursday. 
    3. Reed lost the Braves? Good. It was far better than giving up 1/3 of a billion of taxpayer money to an out of state private corporation that still would not have made any firm commitments to stay downtown long term. And the Thrashers? Yeah. Their leaving left a huge hole in the economic and cultural picture of Atlanta, didn’t it? 
    4. The Beltline TAD is insolvent? Prove it. You can’t, because it isn’t. The truth is that the Beltline is in much better financial and managerial shape than the failing corrupt basket case that it was Reed was elected.
    5. Fort Mac is being given away? Or does it have an actual buyer now despite not having one for eight years despite 2 mayors, the state and the feds desperately looking for one? The only other proposal for Fort Mac was to relocate the State Patrol Academy down there (shuffling jobs around instead of creating new ones) and giving a tiny fraction of the property to a phantom film company with no projects, assets or even a website. Reed was able to get Perry to abandon his original plan to build his studio in Douglas County and locate in Atlanta instead. 
    6. Getting pregnant … you mean Bristol Palin? The difference is that Reed is married to the mother of his child while Palin never did marry her baby’s father (and never will and still hasn’t married ANYBODY). 
    7. Rumors are flying that Sally Yates will investigate Reed over Hartsfield? Yeah, sure. Never mind the fact that unlike previous Atlanta mayors, Reed is barely involved in Hartsfield. So you can keep dreaming. 
    8. $250 million out of $1 billion is a big chunk. It is a quarter of it, and will generate revenue for future mayors to pay the rest of it. Atlanta’s infrastructure has been a problem for decades, and Jackson, Young, Campbell and Franklin (except for the sewers) all punted the problem. By dumping unviable assets to developers (to create tax revenue), increasing the size of the police force (to lure homeowners and businesses) and taking on a portion of the infrastructure problem now, Reed makes it easier for the next mayor to finish the job. 
    Basically, you are just another Jim Crow type who is upset that a black man has more wealth and power than you will ever attain. He gets to travel overseas, you can’t afford to. He gets to be on TV, you have never accomplished anything worthy of TV coverage. Too bad. Should have worked harder and made better choices in life. But instead you resent (nonwhite) people who did.Report

  6. Burroughston Broch says:

    @atlman  ” $250 million out of $1 billion is a big chunk. It is a quarter of it, and will generate revenue for future mayors to pay the rest of it.”
    Please explain in detail how issuing bonds and repairing $250 million of decayed infrastructure will generate revenue for future mayors to pay the rest of it. Amortization of $250 million in bonds will cost $25-$30 million per year.Report


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