Underground Atlanta sale likely to happen by end of MarchBlock building at Underground Atlanta will be preserved (Photo by Kelly Jordan)
By Maria Saporta
After several deadlines have come and gone, Atlanta Mayor Kasim Reed and WRS Realty said they are working to close the sale of Underground Atlanta by the end of March.
“We are just working really hard to bring it to a conclusion,” Reed said Monday morning. Asked if it would happen by the end of March, Reed said: “We are working as hard as possible to close by the end of the month.”
Kevin Rogers, development officer of WRS, put it another way, answering they would close “very shortly” before elaborating.
“I would say that it would surprise me if it were not by the end of this month,” Rogers said. “There is literally a stack of legal documents – deeds, easements, covenants – a foot and a half tall. We, the City, our respective attorneys and our financing partners have to make sure they’re all done correctly.
Rogers also responded to several issues that came up last week when the latest conceptual master plan for Underground was released at an Invest Atlanta committee meeting.
“Broadly speaking, the master plan is representative of the direction we’re going,” Rogers said.
When asked about whether Kenny’s Alley would become a parking area, Rogers explained that it currently is envisioned as a shipping and receiving area.
“Kenny’s Alley would likely be redeveloped into both useable rentable space as well as the receiving area for both the upper floor retail, grocery and multifamily,” he said. “They have all got to have a place where trucks could pull in, the receiving area. Those plans would likely change depending on the size of the grocer.”
But Rogers added that WRS is hoping the Masquerade will become a permanent tenant in Kenny’s Alley.
“We want to keep the Masquerade because they’re doing well, provide a unique artistic outlet and run a professional operation,” Rogers said. “Sure, I agree, Kenny’s Alley is cool and has a unique history, but we have got to make it work and function in the modern era. Until Masquerade arrived, it sat basically vacant, along with much of Underground, for years and years. We are going to do everything we can to preserve as much as we can that has the look and feel of the history.”
Rogers also said the intent is to preserve the historic feel of the Underground development.
“We are planning to preserve the entirety of the Block Building as well as those lower Alabama retail facades with unique history to them,” he said. “Underground overall is comprised of construction that occurred in many different eras, much of it in the 1980’s that is simply not functional today so there are a whole lot of layers.
We just have got to make this thing work and function.. We are going to try to save as much as we can of those buildings that are truly unique.”
In the Invest Atlanta committee meeting last week, much of the conversation centered around the 2,189 of new parking units that are being planned as part of the development.
“That doesn’t mean we are going to build 2,200 spaces,” Rogers said, adding that even “if we did build all that parking, it only be about would be 2.1 spaces per 1,000 square feet of development which is substantially less than a more typical suburban project.”
Plus Rogers added that WRS has an incentive to build the minimum parking needed.
“Given that each structure parking space costs about $20,000 to construct, we have zero incentive to build more than we need,” he said. “But we do have to be responsive to the needs and requirements of the future new users and residents.”
And he said that contrary to some criticism of the project, the goal will be to focus on the walkability and the transit access of Underground.
“We very much want the redeveloped Underground to be a place that encourages people to walk around and be very pedestrian-friendly,” Rogers said, adding they will be maintaining the street grid.”
Asked about their negotiations with possible grocery stores, Rogers said a final decision has not yet been made. It could be one with a large footprint or a smaller regional grocer.
“Our job is to cast a very wide net and talk to as many grocers as possible,” he said. “The grocer with the larger footprint we have talked to has created a very unique, one-off fixture plan specifically designed to serve the downtown community. It’s really cool and quite different than their usual merchandising plan.. It’s very tailored to an urban walkable environment. At the same time, it’s our job to be talking to smaller, more regional grocery store operators so that decision has not yet been made.”
Rogers said WRS has agreed to several restrictions, including one that would not permit it to have any single tenant larger than 100,000 square feet. That means larger retailers like IKEA and Costco would not be able to lease space in Underground.
Meanwhile, the price to buy between 11 and 12 acres of Underground real estate has gone from the originally announced price of $25.75 million to $34.6 million.
“It has been adjusted in the wrong direction,” Rogers said.
On that note, Rogers said he wanted to address his experience working with the city of Atlanta – especially in light of the existing corruption case afflicting City Hall.
“My awareness of it is limited to having only read a few articles, but if anyone did something bad, I’m a believer they need to be held accountable,” Rogers said. “Something that saddens me about it is that there’s a suspicious shadow that has seemingly been cast across the entirety of the city apparatus, so I feel bad for all the honest, nose-to-the-grindstone employees of the city.
“In my experience, which has been going on for three years and been with dozens of people at the city under three different COOs, and all those times, I never smelled a whiff of anything untoward,” Rogers added. “All I experienced was them driving a hard bargain on behalf of the taxpayers. And I think they’ve done a fine job of that, taking Underground which was costing the city millions to own, and selling it to private industry for around $35 million.”
In fact, Rogers said: “The folks we dealt with at the city are tough negotiators, but the taxpayers and residents hopefully will find something heartening to hear that we experienced nothing other than hardworking and creative civil servants.”
A.J. Robinson, president of Central Atlanta Progress, was glad to hear the Underground sale would be closing in the near future.
“I’m encouraged that we are coming to the end of the game,” Robinson said, adding there’s still flexibility with the master plan.
“Everybody had different expectations for Underground,” Robinson said. “Perhaps now we can figure out how to work with those different expectations. The market will dictate flexibility.”