On paper the old General Motors plant site in Doraville seems almost too good to be true for developers. It’s just off busy highways and close to a MARTA line, and the owner is eager to sell.
But so far the hopeful suitors who’ve dreamed up plans for the 165-acre site just inside I-285 have been jolted by the reality of the property’s challenges. A high asking price, environmental questions, a soft office market and dim prospects for taxpayer funding of their plans has soured them all.
That last sticking point has already surfaced for developer Egbert Perry, who recently expressed interest in redeveloping what is at once metro Atlanta’s most vexing and most tantalizing property. He said he views public money, perhaps through a special tax district, as key to the success of any project at the site.
“It’s nothing that is abnormal in my view. It’s crucial,” he said.
That prospect doesn’t sit well with some local officials, who said there’s no appetite - let alone spare funding - for using city or county coffers to help with the overhaul.
“The only thing that’s going to work fast at the GM site is someone with deep pockets and a willingness to do something really different,” said DeKalb County Commissioner Elaine Boyer, whose district includes the plant.
The GM plant came to the market amid the economic downturn of late 2008. Yet GM made clear it was willing to hold onto its jewel until the right buyer hurdles the obstacles, making the plant one of two properties it left out of its 2009 bankruptcy filing.
GM is believed to be seeking $60 million for the site - a price tag that has not budged even as property values in DeKalb plunged 30 percent since the plant closed.
Some who have kicked the tires think it could also cost between $5 million and more than $20 million for needed environmental fixes, from tearing down sprawling industrial complexes to cleaning up heavy metals and toxins left behind from the messy business of making vehicles for 60 years.
And unlike other developments across metro Atlanta, there’s no ready source of public funding or stimulus dollars for a developer to lean on. Similar projects, such as the redevelopment of a derelict steel mill in midtown into Atlantic Station, have been hurried along by a special zone called a tax allocation district.
“It has a lot of potential but it has a lot of challenges,” said Perry. “If it was easy, it would have already been done.”
Over the years, developers have come with grandiose visions of the property, ranging from a proposal for a mixed-use project centered on a casino to a vision of a suburban home for the Atlanta Falcons.
Four companies were initially interested in the site, and GM eventually narrowed its choice to an Orlando-based firm called New Broad Street Cos. But the DeKalb County Commission - left out of informational meetings and negotiations - rejected using $36 million in stimulus money to buy the site and foregoing another $18 million in taxes to start development. The firm pulled its offer in 2010.
Other suitors who scouted the property came away with the feeling that such a large-scale redevelopment couldn’t be done without some sort of taxpayer assistance.
“It absolutely should be positioned to receive public funds for infrastructure and utilities - even though that may not be popular,” said Scott Taylor, president of Carter, a commercial real estate firm that recently considered pursuing the property.
Today the site is asprawling eyesore on the edge of Spaghetti Junction that has cost millions of dollars in lost tax revenue. The loss has been more acute in Doraville, where officials have hoped for years for a redevelopment that would create a new city center and civic indentity decades after highways and the MARTA line divided the town.
“We’ve been very patient and our vision from the get-go has been a job-based development,” said Donna Pittman, mayor of the city of 11,000. “At the top of the priority list is to provide jobs. We are very enthusiastic that the time for that kind of project is coming.”
Any developer’s challenge is to have a profitable plan that wins buy-in from the city, which has the final say on zoning issues.
Perry said he’s confident he can reach a deal with GM, but he noted that the negotiations are still fluid. GM said in a statement it has selected a developer but would not say who it is.
Perry heads The Integral Group, the local firm that’s also part of teams redeveloping Fort McPherson, the massive former Army base near East Point, and trying to turn a vast section of downtown Atlanta into a new transit hub.
Any successful plan for the GM site will likely be less dense than Atlantic Station, probably the metro area’s best-known example of industrial site redevelopment. Doraville officials have signed off on a master plan that allows no more than 2,000 new residential units in whatever is developed.
Perry said his vision includes office, retail and residential, with amenities such as a community sports field. He said he has an equity partner lined up for the project, but beyond that he offered few details.
“We’re so early in the process,” he said. “It’s not as if I’m breaking ground tomorrow. It’s a long-term project and it’s time consuming. You have to go in with flexibility in mind.”
Charles Whatley, DeKalb’s economic development director, said the challenge is figuring out what could work in the complex market and seeing if investors will back up that idea with the cash to get it going.
“It’s like piecing together a jigsaw puzzle,” he said. “But you don’t know what the final picture looks like.”
Residents, meanwhile, are holding out hope that the vacant plant can one day be a vibrant new city center.
“We need something to call ‘Doraville,’” said Chris Avers, an inventory manager for the CDC who has lived in the city for 14 years. “Somebody has to be willing to pay to buy the site and come in and look at our plan. I’m not jumping up and down and throwing parties until we know that will happen.”
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