The developer of the Streets of Buckhead project – a massive redevelopment stalled by the economic downturn – said he will close on $200 million in new funding in mid-July.
Construction on the project should resume immediately after that, developer Ben Carter told The Atlanta Journal-Constitution on Thursday.
Carter didn't name the lender but said it is a U.S. firm that can put up the amount needed to finish the project. He said the firm has been involved in retail property along Chicago's retail magnet, Michigan Avenue.
The luxury retail development should open for business in November 2011, he said. Carter originally said the project would open in late 2009.
The partially built shopping destination is near the intersection of Peachtree and Roswell roads. Carter paid top dollar to piece together part of the Buckhead Village that for years was a raucous party district.
The Streets of Buckhead is designed for high-end retail, restaurants, apartments and other amenities. Carter previously announced leases with Hermes, which already is open in a temporary location on the site, and jeweler Van Cleef & Arpels, among others.
Carter said Thursday he also has letters of intent from several large new tenants, including a movie theater with a bar and restaurant, a high-end bowling alley and an event facility for a local catering company. He also signed new restaurants, said Carter, who has termed the project the "Rodeo Drive of the South." He did not name the tenants.
“I’m very relieved,” he said. “You always have doubts, but sometimes, when you have doubts you figure out why you’re having doubts and that leads to ways to finding solutions.”
Carter wasn’t the only one with doubts. Local business owners, home owners, real estate executives and boosters feared that if Carter couldn’t make it work, the site could sit empty for years, a symbol of the real estate bust. Or, they feared, it might be sold to someone with a different vision.
“It was hurting some surrounding businesses because of its unsightliness and difficulty for pedestrian movement,” said Sam Massell, president of the Buckhead Coalition. “But throughout the time, like the cup half full, I have seen a building half built. If you look at it optimistically you realize there was something wonderful going on there, it had just been delayed.”
Kevin Ellis, manager of Irish pub Fado, which relocated to Buckhead Avenue to make way for Streets of Buckhead, said his business is sound.
But he called the unifinished project a distraction and disheartening.
“I don’t like to use the cranes as a landmark. It was a dream, and hopefully that dream will come true,” he said.
Kris Cooper, managing director of retail capital markets for real estate firm Jones Lang LaSalle, said the situation with Streets of Buckhead had become known nationally.
“Everyone from around the country wants to know what’s going on with (it)," said Cooper, who just returned from a retail real estate convention in Las Vegas. “Atlanta took some hits in terms of retail real estate, so this should help that. It doesn’t cure it, but it helps.”
Progress on the Streets of Buckhead stalled in early 2009 as Carter sought to renegotiate costs with his general contractor after the economy tanked.
Then he had trouble getting financing to complete construction.
Carter already had a traditionally structured land loan for $170 million from Bank of America and $150 million in other funding from CBRE Investors. Carter and three partners invested $20 million of their own money, Carter said.
But he said in January that he needed more money to finish.
His existing lenders agreed that the new money would take the first position in being paid back, Carter said.
"That was key to getting the new capital,” he said.
Carter said that with the new letters of intent from tenants, the first phase of the project – about 375,000 square feet of retail, restaurant and entertainment space – is 70 percent leased.
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