Goodbye, Sears building. Adios, City Hall East. Hello, Ponce City Market.
The new owners of City Hall East, a historic structure in Atlanta near Midtown, are planning an organic garden, a "green" roof top and a foodie market akin to the Ferry Building in San Francisco or Pike Place Market in Seattle. They also plan to shed the names the building has been called, as far back as 1926, to rebrand it as Ponce City Market.
Plans call for hundreds of residential units, 2,000 internal parking spaces, loft-style, upscale offices, retailers -- possibly national chains -- and a foodie destination with “farm to table” vendors and local restaurants. The North Avenue side of the building could have an organic farm to supply the market.
Still, no new tenants were announced Monday as Mayor Kasim Reed and executives with Jamestown Properties celebrated the long-awaited sale at a news conference atop the brick building.
Nonetheless, if everything comes to pass, it will be a big change for the hulking building that for years sat mostly empty along one of Atlanta’s busiest arteries, Ponce de Leon Avenue. Jamestown is paying Atlanta $27 million to buy the building and plans to spend $180 million redeveloping it for an early 2014 reopening. The project will benefit from opportunity zone tax credits through the Atlanta Development Authority and other tax credits from the U.S. Department of the Interior.
One immediate change will be the demolition of the existing parking deck along Glen Iris Drive.
The giant structure was built in 1926 as a Sears, Roebuck & Co. department store and was expanded to 2 million square feet for a mail order warehouse and offices. (That is about four super Walmarts larger in square footage than the Bank of America Plaza, Atlanta’s tallest skyscraper.)
Sears closed its retail store in 1979 and warehouse operations in the mid-1980s. Then-Atlanta Mayor Maynard Jackson bought the building in 1990 for $12 million, calling it the “deal of the century.” Renovation costs and the lack of expected rental income rankled City Council members. Operational costs soared to about $1.5 million annually, and until this sale, Atlanta was spending $60,000 a month to minimally maintain the building after moving out in 2010.
Reed said Atlanta had hoped to “spark a renaissance in this neighborhood.” A retail center that includes a Whole Foods was built -- and still thrives -- across the street.
“But change happened slower here,” Reed said of the former Sears building. “We only occupied a tiny portion of this great structure. And the renaissance of City Hall East never really came. Now 20 years later, it's time to let private enterprise reclaim this glorious building.”
He expects $1 billion in positive economic impact over two years.
Atlanta had hoped to sell the building years ago to another developer, but the recession, lack of financing and the housing bust stalled that deal.
Jamestown, with headquarters in Atlanta and Cologne, Germany, has its own capital and experience rehabbing historic buildings. A local example is the White Provisions complex in west Atlanta. Others are Warehouse Row in Chattanooga and Chelsea Market in New York City.
A project like redeveloping City Hall East is “exactly what we really like to focus on,” said Matt Bronfman, a managing director of Jamestown.
To be sure, demand is not strong for new housing, retail or office space, with vacancy rates near historic highs in metro Atlanta. But Michael Phillips, also a managing director of Jamestown, said fancy “loft” office space in Atlanta is scarce.
Anna Foote, a board member of the Atlanta Development Authority and a resident of nearby Poncey-Highland, was pleased with Jamestown’s plans. She said the neighborhood was concerned about a project with heavy traffic, but she said her fears were allayed in the planning process.
Said Foote: “This is a classic example of how to do it all right.”
Ponce City Market: New start for historic site
Formerly known as: Sears building, City Hall East
Opened: 1926 as a Sears, Roebucks & Co. flagship store.
Size: 2 million square feet, larger than almost 11 super Walmarts combined and bigger than Bank of America Plaza.
Heritage: Lore says Spanish explorer Hernando De Soto found rejuvenating springs there in the 1500s.
History: Atlantans drank spring water there until it became an amusement park.
Atlanta: Bought the building for $12 million in 1990.
Parking: A parking deck will be demolished, with 2,000 parking spaces to go inside the structure.
What few know: The building sits atop an original sewer line.
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