GM plant site will need a new suitor

It sounds like a real estate developer's dream: A single,  large, exquisitely-located patch of land with a willing seller,  just begging to be transformed into something special.

Not surprisingly, the former General Motors automobile plant site in Doraville has attracted its share of prominent suitors and inspired a trove of grand visions for its redevelopment: A new home for the Atlanta Falcons, a casino, Atlantic Station north.

Now, though, after many months and much to-do, there is no developer, no standout plan, and plenty of questions about its future.

The good news, development executives agree, is that the 165-acre tract is too valuable and has too much potential to lie dormant forever. But, they add, don't expect anything soon. Given the lack of financing available and the current lack of public money, redevelopment could take years.

"The site is likely to sit for a while," said Andy Feinour, senior vice president for Carter, a commercial real estate firm.

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Recently, DeKalb County commissioners decided against putting up taxpayer funds to help New Broad Street, the Florida firm that wanted to develop the northeast perimeter site into something comparable to Atlantic Station in Midtown. That project called for the county to use $36 million in federal stimulus bonds and $18 million in property taxes to cover interest.

GM said this week the site is still for sale, but the company doesn’t have a back-up plan in the wake of the New Broad Street deal's collapse.

GM also said it wasn’t ready to drop its $60 million price, even while admitting it could take years before it finds another “appropriate developer to partner with.”

Developers say the price is too high, especially without public financial help, and is a major sticking point.

Originally, four companies were interested in the site of the former General Motors Doraville Assembly facility, which closed in 2008. Jacoby Development, which started Atlantic Station and recently bought the former Ford plant in Hapeville, quickly dropped out of the running.

That left The Sembler Co. of St. Petersburg, Fla., New Broad Street Cos. of Orlando and Hines of Houston.

GM initially chose New Broad Street, but the firm's request for $36 million in stimulus bonds and $18 million in county tax funds made county commissioners uncomfortable.

Development industry observers suggest those firms and others could become interested again, particularly as time passes, and if GM lowers its price and some governmental body agrees to provide aid to the project.

Even though it’s at one of Atlanta’s busiest freeway intersections -- the famous Spaghetti Junction where Interstate 85 meets I-285 -- and near MARTA, the site will need major investment to fulfill its potential. And it would be several years before any revenue-generating buildings open.

That, said Feinour, will require "patient financing," something in short supply.

DeKalb’s goal is to restore the 4,000 jobs lost when the automobile factory closed and boost the property's  value on the tax rolls.

Feinour suggested that one way to bring jobs en masse to the project would be to attract a major corporation to the site. That would largely fill the need for a significant office component and stimulate additional retail and residential development.

While DeKalb County won't invest in the GM site for the foreseeable future, the land is no less desirable, several real estate professionals said. They add that although the timing seems poor given the state of the economy, launching the project now could make sense.

That's because it probably will take five years or more before any of the offices, shops or residences are ready for occupancy. By then, the economy should have improved, with increased demand for what it would offer.

"At first, I thought it was horrible timing. But you have to take into account that it's not going to all happen at once. It could be phased in," said Eugene James, director of MetroStudy, a residential market research and consulting firm. With demolition, environmental work, delays and construction, he said, it could be deep into the decade before buildings open.

"It's not the time to be coming out of the ground," but it is the time "to be sowing the fields for redevelopment because it isn't going to happen (quickly)," said Brian Leary, a key player in the development of Atlantic Station. Leary, president and CEO of Atlanta BeltLine Inc., said it took six years for Atlantic Station to get its first tenants, and eight years before its grand opening.

Finding financing to start the Doraville project remains a problem, however.

Dean McNaughton, senior director with Cushman & Wakefield, said, "The residential market is very soft. Retail is very soft. The office market is very soft. And it's a big piece of property." Plus, banks aren't readily lending for new construction.

Still, "If they get something going and are the first to deliver a product in a new up-cycle ... "

He added, "The location's not going to change and it's a good location. And a good piece of property."

"It may be," Leary said, "one of the most viable sites in the country."

Big projects like Doraville, he said, require public-private partnerships. "At some point, the public sector has to have skin in the game," he said, with the payoff coming in new property taxes.

Leary also said he thinks the Doraville site is most suitable for mixed-used development.

But whatever the ultimate use, it's critical that the developers get it right.

"These big things," he said, "don't come around very often."

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