By Maria Saporta
As published in the Atlanta Business Chronicle on Aug. 5, 2016
A game of musical chairs is underway in downtown Atlanta as United Way of Greater Atlanta is getting closer to selling its office tower.
United Way said it is “extremely likely” that it will move its offices next door to the Loudermilk Center in the space that will be vacated by the Atlanta Regional Commission.
Atlanta Business Chronicle reported on its website Aug. 2 that the ARC is planning to move its offices to Peachtree Center’s International Tower and have its public conference facility located in a visible location on the center’s plaza on Peachtree Street.
The shuffling of office spaces was spurred by United Way’s decision earlier this year to market its entire 4-acre property by Georgia State University to the development community. That included the Robert W. Woodruff Volunteer Service building along Edgewood Avenue, the Loudermilk Center, a surface parking lot and a multi-level garage on the block.
United Way received seven formal offers from developers interested in acquiring the property — especially the Volunteer Service tower — which originally was the Hartford Insurance Tower, built in 1962.
Tim Pakenham, United Way’s chief operating officer, said the organization has narrowed the field to three finalists, who have notable real estate experience and development credentials.
“All three solutions and offers that came in involved retrofitting this building for student housing to serve Georgia State University,” said Pakenham, adding that all three offers are “attractive” enough to proceed with a sale. “It’s likely we will sell the building to one of the three finalists at a price we deem is suitable.”
Although the offers from the three finalists are different, Pakenham said none of them would include the Loudermilk Center and the parking garage.
That paved the way for the Atlanta Regional Commission and United Way to coordinate their efforts on a solution that would serve both regional organizations.
The ARC decided to explore its options to relocate its offices, and it has been in the downtown market for the past several months. It just signed a letter of intent with Peachtree Center on Aug. 1 for 41,000 square feet in the International Tower and 9,000 square feet for conference facilities overlooking the center’s iconic street-level plaza.
ARC said it will take between 10 and 12 months to finish out the new space and move from the Loudermilk Center.
Pakenham said United Way now will begin working on space planning for its 206 employees to move into the office floors of the Loudermilk Center. If all goes well, it intends to move into the Loudermilk Center during the fourth quarter of next year.
United Way will continue to own the Loudermilk Center and operate it as the community meeting facility it is today. Numerous nonprofits, government agencies and organizations regularly meet in its conference facilities, including the Rotary Club of Atlanta and the Atlanta Kiwanis Club.
“As a community partner, we have been sensitive to that all along,” Pakenham said. “An effort we made with ARC was to leave undisturbed the public nature of the Loudermilk Center. We will retain ownership of the parking garage, and we will lease some of the spaces to the developer of the student housing.”
It is not yet known whether the surface parking lot will be part of the sale given that the three finalists have different proposals.
“We haven’t yet picked the horse we’re riding on,” Pakenham said. “If we retain ownership of it (the parking lot), we have no specific plans for it. We just know owning it is better than not owning it.”
But the game of musical chairs will continue because United Way has a total of 37 tenants in the tower.
One of the largest is the YMCA of Metro Atlanta. Ed Munster, the YMCA’s president and CEO, told Atlanta Business Chronicle that the Y will need to find alternative space. “Tenants have been notified and are exploring options for space somewhere else. This is exactly where we are. We have no definitive plans yet,” Munster wrote.
“Some of our tenants have told us they’re moving,” Pakenham said, adding that the tower likely will continue to have tenants through the fall of 2017. “Consistent with our mission, we are trying to be as good a community partner as we can with our tenants. We worked it out with ARC, and we plan to work with all the other tenants as well. That process has begun.”
But Pakenham added that United Way really didn’t have much of a choice. It has been located in the tower since 1975, and the 54-year-old building needs extensive renovation.
“Our motivation was not to try to pocket some money,” Pakenham said. “We just don’t have the resources to fund what needs to be done to this building.”
United Way expects to select its preferred finalist in the next few weeks.