A South Carolina development firm said Wednesday it will miss a deadline this week to wrap up its purchase of Underground Atlanta, and Atlanta Mayor Kasim Reed appeared to set an ultimatum to finish the deal by the end of the month.
Kevin Rogers, an executive at WRS Real Estate Investments, told The Atlanta Journal-Constitution his firm won’t meet the closing set for Thursday. He also said both WRS and the city have resolved most most major issues related to the complicated transaction.
WRS has been working to buy Underground from the city since December 2014. The city wants to move the money-losing mall off its books and spur a redevelopment that it hopes will fuel downtown revitalization. A number of groups are scouting the city’s core for redevelopment opportunities, including some that have emerged as potential suitors if WRS can’t close the deal.
In an interview with the Atlanta Business Chronicle posted later Wednesday, Reed said WRS must close its purchase by the end of January.
Reed said the city is moving to close the deal and that WRS is his “first choice,” but he warned in the Chronicle article: “This is the end.”
The AJC first reported last month one of the groups that might move in if WRS fails to close the deal is the U.S. arm of German real estate outfit Newport Holdings, which has hired former executives of Ponce City Market developer Jamestown.
Newport has orchestrated purchases of about 20 downtown buildings near Underground, and at one point was seen as a potential partner with WRS, the AJC previously reported.
Rogers declined to set a new closing date, but he said WRS plans to hold a community engagement meeting with downtown groups Jan. 14. A sale will not be completed before then.
“The law department, the business guys [at City Hall] have been awesome,” Rogers said. “We’ve solved all the major issues,” but he said other technical concerns remain.
Plans to call a special board meeting on Thursday of the Downtown Development Authority for a potential vote on the sale have been shelved, three people with direct knowledge of the situation told the AJC.
Invest Atlanta, the city’s development agency, and the DDA will convey the property to WRS, and an authority board vote is necessary to complete the transaction, one of the people said. They were not authorized to speak publicly about the matter.
It’s unlikely the board will meet to discuss the Underground sale to WRS before its next regularly scheduled meeting Jan. 19, unless another special meeting is called.
A Reed spokeswoman confirmed the mayor’s deadline to finish Underground. She said a special Invest Atlanta board meeting could come soon, though a date hasn’t been identified.
Reed and WRS have said a prior closing scheduled before the end of 2016 was moved to this Thursday to allow for a final New Year’s Eve Peach Drop celebration on the property.
WRS has proposed a $300 million overhaul involving apartments, student housing, a grocery store, a hotel and other retail.
Rogers said the Jan. 14 community meeting will provide a fuller outline of the project. It will be at 10:30 a.m. at Underground, and local residents are invited to attend.
WRS previously said it wanted to start construction in 2016, but the complicated land sale has been delayed by technicalities that include outdated real estate records and complicated easements for MARTA and the rail companies.
The city has gone to great lengths to help seal a deal. Last year, the city and state of Georgia consummated a complicated land swap that saw the city take on state-owned land near Underground, while the state took over the city-owned Bobby Jones Golf Course in Buckhead. The land swap was necessary, Reed has said, to help provide needed parking for the Underground redevelopment.
Last month, the Atlanta City Council approved a controversial plan to “abandon” parts of several downtown streets that would become private property upon completion of the deal.
Rogers said in December the team expects to begin seeking any necessary rezoning and building permits soon after closing. Rogers estimated planning and permitting could take 18 months.
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