If the CNN Center redo needs public funding, here’s what it could look like
Few places are more synonymous with Atlanta than the former CNN Center in downtown.
The icon, which was left vacant by CNN’s exodus in early 2024, is already undergoing a high-profile renovation effort and rebranding as “The Center,” stylized as “The CTR.” Developer CP Group is preparing to debut its revamped atrium and food hall in June.
But even bigger plans have started to dominate headlines.
A report last week by Atlanta News First unveiled an early-stage proposal for Atlanta and Fulton County to become financially invested in the property, describing it as a potential acquisition. The news rippled through real estate and government circles, catching elected officials by surprise and raising questions about whether the city and county might buy all or part of the landmark.
The answer isn’t so simple and highlights the complicated financial mechanisms that developers in Georgia use when recruiting public investment for private projects.
“As a developer, you always need money,” Lynn McKee, the director of the commercial real estate program at Georgia State University’s Robinson College of Business, told The Atlanta Journal-Constitution. “If you bring in partners … one of those partners certainly could be a public entity. That’s done all through the city.”
The AJC last month broke the news that CP Group aims to pursue plans to convert two of the complex’s office towers into apartments and a hotel. It said those plans will come into form after the World Cup this summer, adding that a request for public incentives of some kind was likely.
CP Group confirmed to the AJC that preliminary talks have started regarding those plans, including the proposal detailed in the Atlanta News First report.
“Public-private partnerships have long been a common tool in downtown Atlanta and play a meaningful role in driving economic development across the city,” the statement said. “We’ve had very preliminary conversations with public and private stakeholders around potential partnership structures, which is typical for projects of this scale.”
What is this plan?
The Atlanta News First report details one potential avenue for a public-private partnership, specifically a method of how CP Group could quickly raise money for its conversion efforts.
The plan centers on the Atlanta Fulton County Recreation Authority, which owns State Farm Arena and Zoo Atlanta, issuing $200 million in bonds tied to the former CNN Center. The broad strokes of the plan were unveiled in a memo obtained by Atlanta News First, which says CP Group would invest $200 million to $300 million of its own capital.
The Feb. 16 memo was written by the authority’s Executive Director Kerry Stewart. The authority declined to provide it to the AJC, citing state law that allows economic development secrets to be exempt from records requests.
“I’m not aware that the Recreation Authority released this document,” the authority’s attorney, Doug Selby, told the AJC. “This is clearly not subject to disclosure at this time.”
The authority also declined interview requests and declined to answer a list of questions from the AJC.
Two individuals with knowledge of the proposal, but who are not authorized to comment, told the AJC the plan isn’t a traditional real estate sale. It wouldn’t result in the city and county owning The Center in the way it owns other properties.
They also confirmed it is not structured as a bond-for-title deal, which is a unique real estate transaction in Georgia designed to provide a property tax break. In those cases, the bonds are not the sort that are sold to investors on the open market and are sort of a legal mechanism to impart a tax break.
In Georgia, various government authorities have the power to issue bonds.
The two individuals with knowledge said it is a sale-leaseback agreement in which the authority would acquire The Center property while immediately leasing it back to CP Group. The ownership structure would then allow the authority to issue $200 million in nonrecourse bonds to raise capital for the conversion effort.
There are multiple ways those bonds could be repaid — such as solely through revenue generated by the project or through a payment in lieu of taxes agreement. But those options are still being discussed and wouldn’t place taxpayers on the hook, the individuals told the AJC.
The memo obtained by Atlanta News First said the agreement could involve the Westside Tax Allocation District pledging 100% of the project’s tax increment to debt service on the bonds. A TAD is an area where property tax revenue growth is allocated to pay for infrastructure within its boundaries.
Atlanta Mayor Andre Dickens is currently advocating for extending all of the city’s TADs, a potentially $5 billion effort.
McKee said this type of structure makes more sense than a traditional sale, especially given how much money CP Group said it will invest in the property.
“You don’t do that (contribute $200-300 million) unless you’re a partner,” he said. “Or unless you still own it and you’re essentially getting this subsidy to make it work.”
CP Group, a Florida-based real estate firm, paid nearly $145 million to acquire the property in 2021 through a joint venture with Rialto Capital Management. It has since invested millions more into the property, redoing entrances and preparing the food hall and atrium to open before the World Cup.
‘One of multiple scenarios’
The Atlanta News First report was the first time many city and county leaders heard of this potential plan.
Fulton County Commission Chairman Robb Pitts said he learned of it when asked by the Atlanta News First reporter for comment. He is on the board of the recreation authority, which he said last week has yet to be briefed on this.
“I was kind of shocked when I heard about it,” he told the AJC. “I had no advanced information, no knowledge or anything about it.”
Dickens declined to comment to the AJC, but Atlanta News First reported he was made aware of the memo. City Councilmember Jason Dozier, who represents downtown, said he hasn’t seen the memo and wants to reassure residents that nothing has been finalized.
“What was reported was one of multiple scenarios being considered, but the conversations are extremely early,” he told the AJC in a statement.
It’s also unlikely that this proposal is the only government subsidy, financing assistance or public partnership that CP Group seeks. The developer will have the option to ask for property tax breaks, which can often present millions of dollars in savings, and housing tax credits designed to ensure that some of the units will be reserved for qualified renters at below market-rate rents.
Chris Eachus, founding partner at the property’s owner CP Group, told the AJC those options were on the table when unveiling the apartment and hotel plans last month.
“Most of the buildings that surround this project are all public-private partnerships,” he said. “When you start looking at uses outside of retail that we’re designing, the economic gap is wide enough, especially on multifamily, that you need (public) participation.”
Tax break requests would need to go through either Invest Atlanta, the city’s economic development arm, or the Development Authority of Fulton County. The Atlanta Housing Authority would likely be involved in any residential subsidies, if requested.
Invest Atlanta declined to comment, and Atlanta Housing did not respond to a request for comment. Kwanza Hall, the chairman of DAFC, also known as Develop Fulton, said the former CNN Center is “one of the most compelling economic development opportunities of this decade.”
“While I cannot speak to active conversations or prospective partners, the intrinsic value of this site, including its visibility, connectivity, and cultural significance, remains unmatched,” he added.
The project’s potential, regardless of how its financing and government partnership are structured, is apparent to McKee as well. Despite its age and the logistical challenges of office conversion projects, the millions of visitors and tourists who pass through downtown make The Center’s property incredibly valuable.
He said the discussion of public investment also needs to center on what public good will be returned. That could be tax revenue, affordable housing or public infrastructure, but there should be some tangible return, McKee said.
About the Author
Zachary Hansen, a Georgia native, covers economic development and commercial real estate for the AJC. He's been with the newspaper since 2018 and enjoys diving into complex stories that affect people's lives.
