Big dreams on hold for Atlanta's Memorial Drive

But the deep recession that began in late 2007 scuttled most of those dreams, turning the Memorial corridor into a stark symbol of Atlanta’s real estate boom and bust. The 2008 tornado that ravaged downtown and then blew along Memorial, damaging several buildings and ripping up markers at historic Oakland Cemetery, seemed like an exclamation point.

Now the road is pocked with weedy patches and abandoned, graffiti-covered buildings -- places where developers had planned mixed-use projects with names like Reynoldstown Station and Cabbagetown Gateway. Much of the property is for sale at depressed prices, but little activity is taking place as potential developers wait -- and wait -- for a turnaround.

How tough is it? Consider 841 Memorial, a 1-acre vacant lot less than a block from the right-of-way for the planned Beltline project.

An investment group bought the property February 2007 -- near the top of the market -- for $1.5 million. It’s now for sale with an asking price of $995,000, but agent Travis Garland said he’s had no decent offers.

“Essentially, the people who are buying land are kind of sharks; they want to buy things at 30 cents on the dollar,” said Garland, of Anders Commercial Properties.

Jim Brooks, part of a team that owns a 1.3-acre parcel on Memorial near Oakland Cemetery, said banks are simply not lending money on raw land purchases, further depressing the market. Brooks and his partners are holding on to their property, but for now they’ve shelved plans to build a 5-story, 100-unit condo with ground-level retail on Memorial near Hill Street.

“We’re just taking -- as are many people -- a wait-and-see attitude,” he said.

Brooks and other real estate professionals working in the area remain bullish, saying the corridor is terrific for both housing and retail projects.

It’s close to downtown and Midtown, they say, making it attractive for young professionals looking to avoid long commutes. And it’s also sandwiched between hip, trendy neighborhoods like Grant Park and Cabbagetown, greatly boosting the odds of an eventual overhaul.

“While it was one of the hottest markets before the real estate crisis, it’s probably going to be one of the first things to come back,” said Stephen Franco, part of a group that owns a former auto parts warehouse.

Tentative signs of a rebound are surfacing, particularly along Memorial’s more established western leg in Grant Park. A restaurant and bar is set to open soon across from Oakland Cemetery in a mixed-use complex called The Jane, where five of eight live-work units have been leased in the past few months, said real estate broker Jeff Pollack.

Still, a trip down the corridor reveals projects in various stages of distress.

At the corner of Memorial and Pearl, several large concrete slabs rest on a 1-acre site. They are foundations for what would have been a 23-unit condo-retail complex called Cabbagetown Gateway.

The developer, unable to secure a construction loan, has tried to sell the property for two years. The listing says “all reasonable offers will be considered.”

Across the street is a closed dairy plant that includes a bottling factory and adjacent office building -- a sprawling 10-acre parcel damaged in the tornado and partially covered in graffiti.

Banker and developer Brand Morgan had the 10-acre tract under contract two years ago for about $10 million, with plans to build up to 350 apartments and a Publix. But Morgan said he backed out when Publix decided the market was too uncertain to support a new store there.

Morgan is relieved the project never got off the ground, figuring he would have lost money given how fast the economy deteriorated. The project is still for sale.

“In hindsight, we were fortunate not to have started a $40 million development right before the real estate crash that we are experiencing now,” he said.

Perhaps no developers have been as frustrated as the team building Triumph Lofts, a 30-unit condo complex set in a former motorcycle parts warehouse down the block from the dairy.

Triumph was about 95 percent complete in August 2008, with several units under contract, when lender Integrity Bank of Alpharetta failed. Developers say they asked for the final draw on their loan -- some $200,000 -- just weeks before regulators seized the bank.

The Federal Deposit Insurance Corp., which took over the loan, declined requests to provide the last bit of cash, said Lou Foah, part of the development team, leaving the project in limbo for the past 17 months.

The loan eventually was bundled with about $3 billion in others and sold in January to an investment team. Foah said he and his partner are in talks with the new owners about reworking loan terms so the project can finally be finished.

On the same block, Stephen Franco and three business partners are leasing space in a former auto parts warehouse that it bought in 2007 for $7.8 million. The group’s original plan called for demolishing the warehouse, building a retail strip and selling four of the five acres to Alliance Residential, which wanted to build about 300 apartments.

But the real estate crash put those plans on hold. The tornado, meanwhile, ripped up part of the warehouse’s roof.

Walking about the property on a recent morning, Franco says the cavernous warehouse space would make a great home for a restaurant, offices and even a recording studio.

Franco and his partners are current on their loan but don’t have money to build out the space for potential tenants, making leasing tough. Bank loans are hard to get, he said, and the wishes the city’s economic development arm would come through with low-interest loans.

“Everyone says this is a great concept, a great idea for the area,” Franco said. “They key is how do you launch something like this?”

The group recently signed its first tenant, FA Seeds, a company that makes a range of metal and furniture polishes. FA Seeds is taking 14,000 square feet at the back of the property.