|
Atlanta Journal-Constitution - April 28, 2010 - by Leon Stafford
< < BACK TO PRESS ROOM
From the window of his ninth floor office at the Southern Company headquarters, Hal Barry sees the potential of Ivan Allen Boulevard every day.
The downtown street, created over the past five years by stitching together Jones Avenue and Simpson and Alexander streets, was seen as the new heart of central Atlanta.
It has all the ingredients for success. It's been widened into a four-lane boulevard; there's quick access from the interstate; and it leads to some of the city's biggest attractions -- the Georgia Aquarium, the World of Coca-Cola and Centennial Olympic Park and the planned Center for Human and Civil Rights.
But since about late 2008, development has ground to a halt. A Hard Rock hotel planned near the street has been put on hold, some of the retail space built along the boulevard remains empty and condo projects have been shelved.
Hardest hit, perhaps, is Barry's Allen Plaza, an eight-block project that flanks Ivan Allen and encompasses several side streets. With the glass towers that now house Southern Co. and Ernst & Young looming over the Downtown Connector, and a W Hotel standing nearby, the veteran developer's project has already given a sleek new look to the north end of downtown.
Whether his vision will ever be fully realized is an open question, however.
The property for a 46-story office tower that would have been Allen Plaza's tallest building -- and the tallest built downtown in years -- avoided foreclosure earlier this year. The building that houses the W was almost auctioned off last month. Barry said he is working a deal with the financial institution advertising the auction, Capri Select Income II, a fund of Capri Capital Partners.
The fate of several other buildings in the development -- including apartments, more office space and a possible downtown grocery store -- are up in the air.
That will change, Barry said, if three things happen: banks lend to developers, there are more tenants and the city invests more in economic development.
"This will turn," he said. "The concept is right. The location is right."
Barry has been in real estate and development for more than 35 years. He has negotiated deals from Cumberland Mall to Perimeter Center and helped assemble the land for what became the Georgia Pacific building downtown. His most recent project is the 29-story Pinnacle tower in Nashville.
"We've just been through one of the toughest economic disasters ever, even worse than the Depression of the '30s," says Barry.
While others have received federal help -- homeowners with tax credits and banks with a taxpayer-funded bailouts -- builders have received no help, he said.
"They haven't done a damn thing to help us through this thing," he said. "It's really been tough."
It wasn't supposed to be this way. When the city announced in 2004 its intention to name the combined surface streets for Ivan Allen, Atlanta's mayor from 1962 to 1970, planners hailed the widening as a developers' bonanza.
"We envisioned (Ivan Allen) as a whole new neighborhood that was grounded in residences and mixed use," said Jennifer Ball, vice president for planning at Central Atlanta Progress.
The area then was dubbed "Centennial Hill," and early buildings included condo projects -- Centennial Tower on Centennial Olympic Park Drive and Centennial House on Ivan Allen.
The Georgia Aquarium also drove infrastructure improvements, Ball said. Part of the negotiations to locate the fish tank downtown -- it was once considered for Atlantic Station -- hinged on making access to the area easier.
Soon others saw the promise.
"The future growth of Atlanta is not going to continue to be suburban sprawl," Barry said as he surveyed Ivan Allen on a recent afternoon from his office, which overlooks the eastern edge of the boulevard. "Atlanta is changing to an urban city."
That's what convinced him and others to plan developments along and near Ivan Allen. Barry's company, Barry Real Estate, assembled the largest number of tracts, building Southern Company's headquarters, luring the eatery French American Brasserie from Buckhead, and creating a campus-like feel for Ernst & Young and the W.
Other developers planned a pirate museum, a condo tower and the Hard Rock hotel.
"Fixing Ivan Allen opened the eyes of a lot of people who wouldn't have ever considered that area," said Paul Breslin, managing partner of Panther Hospitality, which has been working on the deal to bring the Hard Rock to Atlanta.
He said prior to the improvements -- which cost about $30 million and were paid for with funds from the state and CAP -- the different streets were darker, weedy and off-putting.
"Today it's pretty, it's well-lit and it's safe," he said. "That hasn't always been the case. When you make these kinds of significant infrastructure commitments, they become the impetus for development."
The wall Ivan Allen hit is a scenario that has played out all over the city. But industry leaders say it has been especially hard for downtown because the area still lags the rest of Atlanta in residential and retail opportunities. Despite increases over the years in downtown homeownership, the area is still regarded as an office center that closes after 6 p.m.
Ivan Allen was going to help reverse that, Barry said. In addition to the more than 70 condos he built atop the W Hotel, he planned hundreds more residences, both in condos and in an apartment that was to be built by Atlanta-based Post Properties.
In addition, Novare Group built Twelve Centennial Park, an Ivan Allen project at the corner of West Peachtree that offers more than 500 condos.
To be sure, the aim of creating a new live-work hot spot downtown has not gone entirely unfulfilled.
"There’s no doubt the center ( of downtown) has shifted a good bit," said Mike Elting, executive managing director and regional manager of Cushman & Wakefield in Atlanta. Their offices are at 55 Ivan Allen Plaza.
"When I first moved to town 35 years ago, Five Points used to be the center," Elting said. "The clear catalyst for downtown has got to be Centennial (Olympic) Park and what all has gone there and what is going in there. That’s where the (Ivan Allen) project comes in—its closeness to Centennial Park and the highways."
At one point, Barry even interested the Publix grocery store chain to build a 40,000-square-foot store in the area, he said. It was going to be at the bottom of one of the buildings and would have been key to bringing other retail downtown. He does not believe that such a large store could happen now.
Phil Skinner, a partner at Arnall Golden Gregory in Atlanta, said when this ends is anybody's guess.
“It seems to me that the pace of commercial real estate foreclosures has picked up,” he said. “It seems lenders were trying to decide what to do last year. Now some reluctance has gone away.”
For borrowers still in trouble, “Lenders can make the decision to foreclose and do whatever is next with the property. Now, time is just up.”
Bob Peterson, chairman and chief executive officer of Atlanta-based Carter, said there are many similar situations to large scale projects like Barry's, including Ben Carter’s on again-off again Streets of Buckhead project.
“Many good properties will be held up and slow to recover in the environment we are in today particularly because of supply. There’s too much supply and too little demand,” said Peterson, who has been in the business more than 35 years.
He said a lender or financial partner may feel that change is needed, that another sponsor or developer may need to come in and finish a project.
“We’re all replaceable. Other visionaries, opportunists and entrepreneurs can step into the situation.”
Barry is optimistic. He said Allen Plaza will be completed because Atlanta is becoming more urban.
"We've gone pretty much as far out as we can without commuter trains," he said.
But only time will tell whether he will be part of that urbanization of downtown and the Allen Plaza project.
"Whether we as a company will continue to be involved ... I don't know," said Barry. "But I can tell you that is certainly the intention (to stay with it)."
< < BACK TO PRESS ROOM
|
Press Room
PAUL'S NEW HORWATH HTL SITE