United Way HQ sale could cause waves for nonprofits

By Maria Saporta and Doug Sams
As published in the Atlanta Business Chronicle on March 11, 2016

United Way of Greater Atlanta has selected real estate services firm Colliers International to market its 4-acre downtown campus for a possible sale.

Colliers beat out three other firms, after pitching a proposal to United Way that included the possibility of selling the 18-story tower on the campus and converting it to student housing.

United Way’s plans were first reported on Atlanta Business Chronicle’s website on March 7.

The fate of the campus, which includes the tower, a parking garage and the Loudermilk Conference Center, could have a significant ripple effect for Atlanta’s nonprofit community. The move likely would impact at least 40 nonprofits now housed in the Woodruff Volunteer Center tower, the Atlanta Regional Commission located in the Loudermilk Center and the Rotary Club of Atlanta and the Atlanta Kiwanis Club that meet in the conference center every week.

It also changes the dynamics of what once had been one of Atlanta’s most unique features – the concentration of the nonprofit and foundation community on two adjacent blocks.

Milton Little Jr., president of Atlanta’s United Way, said the board and his staff knew they would have to spend millions of dollars to refurbish the tower. They also questioned whether owning and managing real estate is central to United Way’s philanthropic mission.

Over the years, several of the nonprofits that used to be housed in the tower have moved out on their own – buying buildings or finding other space that better suited their needs.

At the same time, downtown’s real estate market has been heating up thanks to the investment of nearby Georgia State University as well as the trend of millennials and others wanting to live and work in a more urban setting.

“As we have observed all the development around this complex and the gradual reduction in the number of people in the Hurt building, we’ve had to look at our own situation – whether staying in the real estate business was the highest and best use for us,” Little said.

The tower was built in 1962, and Little said United Way would have to spend a considerable amount of money to make it attractive for current and prospective tenants.

Currently the tower is 84 percent leased to a total of 40 nonprofits. The largest user, however, is United Way, which has 60,000 square feet in the building. If United Way has to move, a likely scenario, it would need at least 40,000 square feet for its 200 employees.

The lead tenant in the Loudermilk Center is the Atlanta Regional Commission, which leases about 46,000 square feet on the upper floors. The conference center also is a regional gathering spot for community organizations, nonprofits and business groups.

Little described the process of marketing the campus as a “blank canvas” with many issues still to be resolved.

It’s possible the tower could be sold to a developer, who would turn it into student or faculty housing overlooking Hurt Park. It’s possible United Way could move to the Loudermilk Center and lease from a new owner or keep that property as a community center. It’s also possible someone would have a new plan for the entire block, which also includes a surface parking lot.

Doug Hooker, executive director of the ARC, said it’s hard to know how to proceed because of the many possibilities.

For the ARC, he outlined those as 1) United Way sells the whole campus, and the new owner wants the regional planning agency to stay under its current lease, which runs for nearly 10 more years; 2) United Way sells the entire campus and the new owner wants ARC to leave, and it will need to find new space; or 3) United Way sells the campus with the condition that Loudermilk maintains its current purpose and tenant, which Hooker said is unlikely but possible.

The domino impact of United Way’s move is a stark change from what Atlanta has enjoyed over the last four decades.

Few people understand this better than Russ Hardin, president of the Robert W. Woodruff Foundation and its related family foundations.

Three of those Woodruff-related foundations collectively invested nearly $10 million in that block over the last 41 years.

In 1975, they provided half the money needed to buy the former Hartford Insurance building, constructed in 1962. In 1994, they provided money to build the parking deck, and in 1999, they were the largest donor to build the Loudermilk Center.

The Woodruff Foundation, as well as Atlanta’s other top foundations, were conveniently located diagonally across the street in the Hurt building, providing a ground zero for civic Atlanta.

One could almost see the money and philanthropic ideas for Atlanta crossing back and forth across Edgewood Avenue on a daily basis.

Hardin wistfully remembered when Atlanta’s civic and business power structure was centered around Five Points, where he would run into the city’s movers and shakers at the Peachtree Luncheonette or on the sidewalks.

Then the law firms, the banks and the accounting firms started moving uptown, and the area changed. But the philanthropic and nonprofit community remained based in the Hurt building and the Woodruff Volunteer Center, best known as the United Way building.

The Woodruff Foundation actually did all it could to keep tenants in the United Way building.

“I would say that building was unique to Atlanta,” Hardin said. “We had multiple United Way agencies in one common location. As far as I know, it was distinctive. Other cities want to replicate it.

“What we couldn’t stop was agencies leaving there,” Hardin continued. “We have seen the concept unravel over 20 years. We have never helped folks build a building or move, but they’ve done it anyway. We have fought a losing battle for 20 years. Everybody wanted their own place.”

As much as he longs for the “good old days,” Hardin said he has come to face the modern day reality. The Woodruff Foundation left its home in the Hurt building for the 191 Peachtree Tower, which Hardin said shows how important downtown remains.

“Nonprofits are not the best at owning and managing property,” Hardin said, not faulting United Way for exploring its options. “I think they are making absolutely the right decision. I miss the sense of community we had when the entire business community and the entire nonprofit community were downtown. But things change.”

As for United Way’s future, Little said there are multiple reasons for it to stay downtown, but even that is “wide open.”

Doug Sams covers real estate for the Atlanta Business Chronicle.