Atlantic Station

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The transformation is far from complete, but the refurbished site of a former steel mill in Midtown is poised to reopen next month as a fledgling mini-city called Atlantic Station.

RENEE HANNANS/AJC

(ENLARGE)

Workers in Atlantic Station's office tower will have this view of the residential area when the building opens next month. Many condo owners bought their units sight unseen.

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SouthTrust Bank will shift its main office from a prestigious Peachtree Street high-rise to a new 21-story tower in Atlantic Station. Dignitaries will cut a ceremonial ribbon to officially open the signature yellow 17th Street bridge, built above the Downtown Connector specifically for the development.

By June, hundreds of residents will be unpacking boxes in new condos they purchased sight unseen because they're still being built.

Despite all this, the level of excitement over the opening of Atlantic Station is almost underwhelming. Maybe that's because it's in a city that's serious about self-promotion.

Sure, Atlantic Station is big. Fine, it's one of the nation's premier examples of reclaiming abandoned industrial land. And, OK, Harvard University has invited the developer to visit next month and explain how he pulled it off.

But this is Atlanta, after all. An Olympic city. Home of Coca-Cola. Cradle of the civil rights movement. Birthplace of CNN. Not to mention home of a baseball team famed for winning all summer and losing in October.

And Atlantic Station, after all, is almost old hat.

Since 1999, hundreds of thousands of commuters zooming past it on the Downtown Connector have seen ant-sized workers toiling away. The project is almost two years behind its scheduled opening date of mid-2002. Even now, the earliest the shops and big movie theater could open is summer 2005.

Jim Jacoby has stopped trying to explain away the delays and criticisms. The developer who dreamed up Atlantic Station in 1996 seems at peace, hands folded as he sits on a metal bench overlooking a lake where fountains soon will play with water in front of the new condominiums.

"Even I'm amazed when I come out here and see what we've done through a true public-private effort," Jacoby says, going on to list the accomplishments he sees.

"We'll have a national model for brownfield redevelopment," he says. "Hopefully we'll help with Atlanta's tourism and convention business by giving people more to do at night. We've increased the tax base of the property, and we'll create $500 million in [taxable] sales a year. We're creating jobs even now, the largest construction project in Georgia with 3,000 workers. And we'll offer a quality lifestyle, with housing affordable for senior and students, in intown Atlanta."

But what about the delays? And how about that retail?

"I would have liked for it to open sooner," Jacoby says. "But we're taking our time to do it right. Eight years really isn't that long."

Jacoby remains upbeat about the retail. He says, as he has before, that it takes time to create a mix of tenants that will be mutually supportive and not cannibalistic. It also takes a critical mass to justify construction of a retail and entertainment center. Jacoby says Atlantic Station is at that point.

But, in fact, the project has sputtered.

Deviation from plan

Glossy renderings dispensed freely in 1999 that show multiple high-rise office towers are nearly forgotten. Plans for a fourth hotel have been dropped, although the three hotels still in the blueprint are to provide the same number of rooms. References to opening in mid-2002 have disappeared.

Since the project was unveiled, the original development team fell apart, sending Jacoby scrounging for new partners. The retail market sagged, and few companies wanted new stores. The global economy has stalled, terrorists attacked the United States, and the nation waged two wars.

And the whole thing is going to be a whole lot harder to build than it appeared during the heady days of the booming 1990s economy.

Nonetheless, the project has moved forward. But it's now on a timeline that seems to reach into a distance as far as that which can be seen from the top of Atlantic Station's lone office tower.

Jacoby found new partners to build the residences, Lane Co. and Beazer Homes. When no likely suitor emerged for the office and retail components, Atlantic Station became its own developer. The firm is a joint venture of Jacoby and his chief investor, AIG Global Real Estate Investment Corp., an affiliate of the AIG insurance giant.

Overcoming hardship is part of the game in high-risk development. Mixed-use projects have been notoriously tricky creatures because the development system is geared for traditional single-use projects, says Stephen Macauley, an Atlanta developer who specializes in mixed use.

"Everything in the process of development, from land planning to design, permitting through construction, financing, everything is formatted to support conventional development," Macauley says. "Layered on that, at every level of governmental approval, is a staff and bureaucracy that is unaccustomed to mixed-use developments. So there's the additional process of everybody getting up to speed."

Add to those challenges a tainted site that has to be cleaned, and projects like Atlantic Station become a huge challenge. Old industrial complexes typically don't have roads to connect to their neighbors because they weren't needed. Utilities can be hopelessly out of date. To help pay for upgrades, government is all but required to offer incentives to offset the higher cost of development.

But brownfield projects are becoming popular in cities across the country, says Jane Snoddy Smith, a lawyer in Austin, Texas, with the international law firm of Fulbright & Jaworski. Smith once worked in Atlanta at Alston & Bird and now represents national investors and developers, with an emphasis on retail and brownfield redevelopment.

"Two things are generating the interest in brownfields," Smith says. "There's a scarcity of infill land, and a brownfield that's lying fallow is big enough to do something with. And when you have a population on the site, since it's a live/work project, it's going to be a success because you've got a captive market."

This summer will tell whether Wall Street accepts Atlantic Station's growth projections.

The developers hope investors will buy about $100 million in bonds backed by the success of the development, meaning the contracts for retail, housing and office tenants that have agreed to locate at Atlantic Station. The money would reimburse the developer for a portion of the estimated $200 million it has invested in cleaning the site and installing roads and utilities. This would be the second bond issue for a project always envisioned to have multiple issues to pay for infrastructure improvements.

Atlanta, as the public partner in the project, would issue the bonds on behalf of the private developer. Taxpayers are not on the hook for the debt because it is to be repaid with the property taxes that rise as the development becomes more valuable. This type of financing is common across the country, although it only recently has been embraced in Georgia.

Heavy anticipation

None of these aspects of developing Atlantic Station can come soon enough for two women buying condos in the mini-city. Both describe their homes as dreams come true.

Lisa McCard is in the midst of changing her life, and her condo is central to her efforts.

"I believe in smart-growth principles and not adding to sprawl and traffic," McCard says. "My strong goal is to live and work in the same place. I'm thinking about not having a car. Theoretically, that will be possible at Atlantic Station, with the bus connection to MARTA's Arts Center station."

McCard moved to Atlanta less than two years ago and is working her way through graduate school at Georgia Tech in the urban planning program. Another part of her dream is getting a job at Atlantic Station, where one of her professors, Brian Leary, was hired after he got his master's from Tech and wrote a paper on the potential of retooling the old steel site.

"We joke about it all the time," McCard says. "But a lot has changed for me since I left South Georgia. I've always wanted to live in Atlantic Station, so buying a condo there really is a big dream coming true for me."

For Robin Hensley, moving to Atlantic Station in May is her return to Atlanta's urban core.

Hensley is that rare creature, an Atlanta native born at Piedmont Hospital. In 1980, she bought a condo near the Atlanta Civic Center and spent five years pioneering the downtown lifestyle. Following a move to the Sandy Springs area, Hensley sold that home last fall and is counting the days until she moves to her condo. It's located just three blocks from office space she rented for her business.

Hensley isn't worried that Atlantic Station is a construction site. She says she doesn't cook, so she doesn't need a nearby grocery store. She says friends are already calling for invitations to visit, especially on theater nights when she expects to resume her famous champagne-and-dessert parties. She got her first glimpse of her condo yesterday.

"People think I'm crazy to have bought something sight unseen, but life is full of risk," she says. "Sometimes you just have to jump in a leap of faith."

Jacoby would appreciate Hensley's outlook. His own daredevil leap landed him in clover as soft as a dream.