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Wed March 19, 2014
City To Sell Underground Atlanta
UPDATED 6:30 PM: Atlanta Mayor Kasim Reed Wednesday said the City of Atlanta plans to sell Underground Atlanta, the downtown shopping center once envisioned to be a lynchpin in the area’s development.
The City Council voted unanimously Monday to allow Mayor Kasim Reed to spend up to $8.8 million to buy the shopping center out of an 88-year lease. More than 70 years remain on that agreement.
Reed said the move is necessary in order to eventually sell the building to a private company for development. As for the lease agreement, Reed said that deal should close this month.
“What we know from the all of the folks whom we’ve talked to who are experts in this space is that we need to control the property 100 percent because people aren’t going to come in and make significant investments unless they can drive the train,” Reed said.
The city owns the property, but it’s being leased and operated by real estate developer Dan O’Leary.
Reed says the city is losing about $8 million a year to pay off bonds from Underground’s most recent renovation.
While the mayor said he said he doesn’t have a prospective buyer in mind, he said some interest for Underground has sprung out of other discussions about plans to develop Turner Field after the Braves depart in 2017.
“We’ve been meeting with so many developers that other conversations really have grown out of that interest,” Reed said.
Current tenants will have a year after the deal to move out.
Reed said the Underground Atlanta would not likely be turned over to nearby Georgia State University, saying the idea was not to reacquire the property for the school. However, the mayor didn’t completely rule out that possibility of the school being involved in some way with plans for the property.
“What I want to do is bring the University energy into the heart of the city,” Reed said. “If you look at the sheer number of young people moving into this city, we need to address them. And having Georgia State in our downtown and the Atlanta University Center in our downtown, if we put the right product in the middle of it, I think we’re going to move.”
Asked what he envisioned for the current building, he said something along the lines of the development of East City Hall, now the soon-to-open Ponce City Market.
Councilman Kwanza Hall, whose district used to include Underground Atlanta prior to redistricting, agreed.
“It should stand on its own for all Atlantans, and not be a place that has a limited market, as it does right now,” Hall said.
But Underground Atlanta has gone through significant revisions in the past without much success, and has continued to be a financial drain.
A.J. Robinson, who heads the group Central Atlanta Progress, said with growing interest in downtown real estate, now is a good time for the city to sell off the property.
“Can we aspire to a better vision – a bigger vision?” said Robinson. “I think with the cycle changing and all the interest in urban real estate around and in downtown Atlanta, that it’s a good time to see what can come up with it.”
Reed said the city has been in talks with current owner O’Leary, and that those discussions have been going well.
O’Leary did not respond to interview requests before airtime.