Developers are creating a modern vision for Atlanta's old downtown – Atlanta Business Chronicle – Atlanta Business Chronicle

A former railroad terminus in downtown Atlanta is the site of a 50-acre development, a possible link between the city’s industrial past and its high-tech future.
illustration by Brooke Timmons | ACBJ; Getty Images, Byron E. Small | ABC
In 2015, billionaire entrepreneur Tony Ressler had just made the decision to buy the Atlanta Hawks and was leaving the team’s arena.
Walking toward his SUV, he turned to Hawks CEO Steve Koonin.
“What’s that?” Ressler asked, looking toward a collection of parking lots 40 feet below the city’s old viaducts.
“That’s ‘The Gulch,'” Koonin said.
“What happens in The Gulch?”
“Nothing. … Nobody’s figured out how to develop it.”
Ressler paused, processing the idea of a void sitting in downtown for decades. Now, it was outside the arena where the team he just bought will play 41 home games every year.
“We’re going to build LA Live right there,” Ressler said.
Then, he got into his SUV and drove away.
“That was pretty much it,” Koonin said.
Emerging signs
Today, the transformation of Ressler’s Hawks into a playoff contender has moved faster than the revitalization of these 50 acres of downtown Atlanta rail-lines and parking lots into something like LA Live, a $3 billion mixed-use project surrounding Staples Center (soon renamed Arena), where superstar LeBron James plays for the LA Lakers, one of most powerful brands in pro sports.
In Atlanta, three years after the City Council approved almost $1.9 billion in public subsidies for The Gulch, developers have yet to break ground on the first of possibly 20 towers filled with offices, hotel rooms, apartments, stores and restaurants. The project has navigated legal challenges, the COVID-19 pandemic, and a deal with the city still that needs to be ironed out.
But, signs are emerging of how the revitalization could alter the growth of this historic district, known as South Downtown.
Consider that this past year one of the railroad buildings overlooking The Gulch was converted to more than 100 loft apartments. The units leased in just 30 days, averaging from $1,400 to $1,500 per unit. Those are healthy rents for this area, and probably high enough to convince construction lenders to finance more development.
A new apartment tower in The Gulch is expected to break ground next year. Another planned office tower in The Gulch will now be developed as apartments. And, developers are eyeing similar apartment projects nearby.
A South Downtown skyline with multiple apartment towers under construction at once is unusual. Consider this: Since 2000, this part of central business district has added about 162 new apartment units every year. Over that same period, Midtown has averaged over 500.
They like the grittiness
To grasp the scope of the transformation of The Gulch from acres of dirt and rail into a sparkling mini city, you need Brian McGowan, former president and CEO of Invest Atlanta and Atlanta BeltLine Inc. Now, as president of Centennial Yards Co., he has returned to Atlanta after working in the economic development circles of Seattle’s Big Tech scene. One of his most important jobs: pitching companies the opportunity to relocate to The Gulch, now rebranded as Centennial Yards.
“Not all companies want to be in an environment like Midtown. Some like the grittiness of downtowns,” McGowan said from the 22nd floor of the 101 Marietta Street tower, where the offices of Centennial Yards Co. overlook The Gulch.
McGowan has a point. The Gulch was the No. 1 choice for Amazon when it was touring Atlanta for its HQ2 project.
“The mentality of these large tech companies is different from the way Atlanta Fortune 500 companies operate,” McGowan said. “They grow exponentially. They’ll grow to 40,000 people, then 60,000, then 80,000. Over the past 15 years, Amazon went from zero employees to planning for 80,000 in the Puget Sound region.”
In Atlanta, just minutes north of The Gulch in Midtown, companies including Google and Microsoft have announced thousands of jobs. Midtown has Technology Square, an eight-block innovation district created by the Georgia Institute of Technology and anchored by the Coda tower. It’s where global tech firm Cisco Systems Inc. just said it will put 700-new jobs.
Going after a major tech company is part of the big swing McGowan and his team are taking at The Gulch. The project got approval from the city to build about 9.4 million square feet of office space. For perspective, that’s roughly the amount developers added to Midtown over the past 15 years.
McGowan said The Gulch could land something like HQ2 or Microsoft’s planned campus on the city’s Westside, or it could lure multiple tech companies.
For now, the area around The Gulch is a federal district of some 1,200 government employees. The Gulch serves as their parking lot.
From his office, though, McGowan can look out and imagine an innovation district with thousands of tech jobs interwoven with the campus of Georgia State University and Atlanta University Center and Georgia Tech — both about a mile away.
“This could be a new version of Tech Square,” McGowan said.
‘A hole in our city’
What’s blocking progress is a pending deal with the city of Atlanta. It includes property swaps in The Gulch and easements and community benefits agreements. The deal is so complex it might involve every major law firm in the city.
Another challenge is brand recognition. McGowan wants everyone to understand the potential of Centennial Yards. But, when he’s out in the community talking about the project, most of his peers haven’t heard of it.
“They still know it as The Gulch,” he said.
A half-hour north of downtown on Interstate 75, another Atlanta sports team and its prized mixed-use development just enjoyed the national stage. The Battery was a showcase for the Braves and Cobb County during the World Series. Overhead shots showed a sparkly Battery at Truist Park, as Fox Sports’ Joe Buck praised the project.
“The Battery didn’t get hits or play defense,” Koonin said. “But, it was a player in that experience.”
McGowan also watched the series and said “The Battery looked awesome.” It was also a reminder of what’s at stake for the city’s historic commercial district.
“Right now when you fly over downtown Atlanta, we have a big hole in the heart of our city,” McGowan said.
They’re taking ‘enormous risks’
He understands the reasons for that. About a decade ago, he had just joined Invest Atlanta, the economic development arm for the city, when Atlanta real estate company Cousins Properties Inc. was leading a development group prepared to turn The Gulch into a transit hub.
Few companies have more experience developing complex projects than Cousins Properties, started by Atlanta visionary developer and philanthropist Tom Cousins. Yet, even its proposal fell through.
“It’s enormously complicated, enormously expensive,” McGowan said. “There’s a reason it’s been a hole in the ground for a long time.”
The direction of Centennial Yards is heavily influenced by Ressler and his brother, Richard, a co-founder of Los Angeles real estate owner and developer CIM Group. Combined, their investment groups already spent hundreds of millions of dollars on reimagining The Gulch, a project with a projected value of $5 billion.
McGowan called it the largest project in the Southeast and probably among the top-five largest in the country.
However, the current emptiness of The Gulch is a reminder about South Downtown’s lack of housing and amenities. Yes, Centennial Yards will add value to the Hawks, McGowan said. A proposed 800,000 square feet of retail will help form an entertainment district where Hawks fans can go have drinks and hang out before and after games, much like Braves fans do at The Battery.
But, McGowan said, the Resslers are also adding value to downtown.
“Tony and Richard have been willing to take on enormous risks,” he said.
‘Their mouths drop’
A theme of the redevelopment is connections.
It’s about connecting Centennial Yards to the street grid of downtown’s tree-canopied sidewalks and cafes within the Fairlie Poplar district, as it “was always meant to be,” McGowan said.
It’s about connecting Fairlie Poplar and Centennial Yards to Georgia State University, Georgia Tech and the Atlanta University Center, something Koonin is excited about. When they are meeting with Fortune 100 companies whose executives realize they could locate their companies among 50,000 Georgia State, HBCU and Georgia Tech students, “their mouths drop,” Koonin said. “That’s talent that isn’t going to Seattle, Portland and Silicon Valley.”
A ‘special place’
The redevelopment is also about connecting with other projects in South Downtown. A few steps away from the Gulch is the revitalization of historic 222 Mitchell Street, the hulking data processing center and executive offices of former financial giant Nations Bank. The property stands across from Hotel Row, a block of former hotels that German real estate company Newport is renovating, along with 222 Mitchell.
Centennial Yards also intends to link the neighborhoods and districts of South Downtown cut off by the 50-acre hole in the city. Today, it’s not easy to take a walk from historic Fairlie Poplar to Castleberry Hill, a neighborhood with roots in the 1800s.
“I don’t know of any place in America where you have such a high concentration of African American business ownership,” said Jerome Russell, a longtime Atlanta business and civic leader known for the H.J. Russell Center for Innovation and Entrepreneurship.
“This is a special place that we are incubating here,” Russell said.
He also underscores another connection Centennial Yards wants to make — one with Atlanta’s diversity. Hawks owner Ressler leads an investment group with about a 40% stake in the project. Many of those investors are Black, reflecting the project’s focus on equity and inclusion. McGowan said that “was important to Tony and Richard from the beginning.
Five voices answer: “What is The Gulch going to look like in 10 years?”
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