Underground Atlanta sale moves closer to finish line

The sale of Underground Atlanta cleared a key hurdle Thursday when a city board approved some technical changes to the sales agreement, including a higher purchase price.

But downtown residents said the city is in a rush to finish the long-simmering sale to a group that hasn’t been responsive to the community.

The unanimous vote by the Downtown Development Authority board was a key step to resolve title issues that have complicated the process of selling Underground for a private redevelopment, Mayor Kasim Reed said.

The price also increased from $26 million to $34.5 million because the transaction now includes streets that the Atlanta City Council recently voted to privatize within Underground, and nearby state land that has been added to the property.

“The Underground transaction … is one of the most complicated real estate transactions that’s been done [in the city’s history],” Reed said. “It’s hard, we’re pushing through and I’m confident it will be done.”

WRS Real Estate Investments, a firm best known for suburban strip malls, has been in negotiations to buy the struggling downtown mall for more than two years. The deal has dragged on and Reed recently set an ultimatum to close the deal by Jan. 31.

WRS has proposed a $300 million overhaul involving apartments, student housing, a grocery store, a hotel and other retail. But few specifics are known.

Asked earlier this week if WRS planned to close the deal by the end of the month, WRS executive Kevin Rogers sent a text stating: “As soon as possible.” He couldn’t be reached Thursday.

Priscilla Smith, a longtime downtown advocate and former executive with the Center for Civic Innovation, said WRS hasn’t engaged with residents and only held its first community meeting on the project last Saturday, after more than two years of negotiations.

She said she fears WRS will be unable to deliver the development they’ve promised.

“From their portfolio it doesn’t look like they can. They develop strip malls,” she said.

The city wants to move the money-losing mall off its books and spur a redevelopment that would 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.

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.

Reed cited the city’s work in finding developers for Turner Field and Ponce City Market as proof his administration can deliver. He said the city hasn’t moved too fast and that hearings at City Hall and Invest Atlanta since December 2014 have allowed for resident input.

“I have a reasonable track record of working on these projects and bringing them to a good close,” he said. “That’s what we’re going to do with Underground, whether that’s with WRS or someone else. There is now enough interest in Underground Atlanta to close a deal with WRS or someone else.”

But Kyle Kessler, a downtown resident and Center for Civic Innovation staffer, said the city and WRS shirked responsibilities to engage with neighbors.

“The two and a half years since this proposal [was announced] there was no presentation to the neighborhood, there was no public meeting until less than a week before the Downtown Development Authority makes a final call on the deal,” he said. “[That’s] not what’s envisioned by city code or state law.”