By David Pendered
The lifespan of commercial buildings now seems to be about 30 years in metro Atlanta, judging from two redevelopment projects in Atlanta and one under review in Peachtree Corners.
For starters, the Georgia Dome is to be demolished less than 30 years after it was completed, in 1992. Demolition is to be complete by the end of 2017, by which time the Atlanta Falcons are to have taken nest in the Mercedes-Benz Stadium next door.
The Georgia-Pacific building, completed in 1982, is in line for up to $150 million in renovations funded by bonds to be issued by Invest Atlanta, the city’s development arm.
Finally, the Peachtree Corners City Council has hired a consultant to devise strategies to redevelop privately owned apartment complexes that date to the 1990s. Some apartments in the area are even older, dating to the 1980s.
Each of these projects has been described by its advocates as an effort to keep up with the times. Atlanta Mayor Kasim Reed said of the Georgia-Pacific project:
- “The renovations will modernize the company’s offices, making Georgia-Pacific more attractive to younger, tech-savvy workers, and will also support our goals of making Atlanta a top-tier city for sustainability through water and energy conservation efforts.”
Georgia-Pacific plans to reconfigure 23 of the 52 floors in its headquarters building in Downtown Atlanta. Company officials said the renovation was a major factor in its decision to keep 2,600 employees in Atlanta and to add up to 600 jobs, according to a statement issued by Reed’s office.
So much has been communicated about the demolition of the Georgia Dome and construction of a new stadium for the Atlanta Falcons that there’s little need to elaborate. Suffice to say that the dome, built for about $214 million, didn’t provide the pizzazz expected from the new $1.4 billion Mercedes-Benz Stadium.
The Peachtree Corners project stems from the city council’s decision to freshen up one of the new city’s major corridors – Holcomb Bridge Road.
The apartment complexes that flank the road provide affordable housing, mostly to tenants described by a city report as young, racially diverse, comparatively low income, and without children.
Monthly rental rates average $886 a month, according to a consultants’ report the council adopted on Dec. 15, 2015.
The average household income in the Holcomb Bridge study area is $36,673, compared to citywide average of $60,040. Forty-nine percent of households in the study area earn less than $35,000 a year, according to the report conducted by Lord Aeck Sargent, with Bleakly Advisory Group and Stantec Consulting.
One problem facing the city council is that owners of these apartment complexes may have little interest in changing their business model. Occupancy rates were 96 percent in 2015, according to the consultants’ report that went on to observe:
- “Despite public perception, [the apartment complexes] are performing quite well from an economic perspective. … Given these economic trends, incentivizing the redevelopment of select residential areas will require a more strategic approach and collaboration between public and private sectors.”
In addition, prices are rising for some of these apartment complexes. The Domain was purchased in January by a Florida-based company for $39,950,000. The prior owner netted a 26 percent profit, or $8.2 million, based on its purchase price in 2008 of $31,750,000, according to Gwinnett County tax records.
The council has engaged Bleakly Advisory Group to conduct further study, according to legislation the council adopted March 15. For a payment not to exceed $18,000, Bleakly is to examine three topics:
- “Analyze the Economics of Redevelopment for Four Existing Apartment Projects
- “Test Potential Regulatory and Incentive Policies for Targeted Redevelopment
- “Suggest A Range of Alternative City Policies to Support Targeted Redevelopment of Multifamily Properties.”
A statement released by the city described the project in these terms:
- “The City Council selected Bleakley Advisory Group to study the redevelopment of existing apartment properties which have outlived their economic usefulness and have become areas of lagging property values. The study will analyze the feasibility of transitioning the properties into either new housing or other land uses.”