Hartsfield-Jackson’s long-awaited hotel project canceled by developer

Hartsfield-Jackson International Airport’s long-delayed hotel project has been officially canceled by the developer, the airport’s top official said Wednesday.

The years-long vision for a hotel just steps away from the domestic terminal was conceived about eight years ago under former Atlanta Mayor Kasim Reed’s administration. Planning started in 2014, and Reed held a press conference at the airport in 2016 announcing that construction of the hotel would be complete in 2020.

But plans for the hotel and surrounding development have been in limbo for years and the pandemic did developers no favors, disrupting global travel and the appetite of financiers to support it.

Major airports across the globe — including Denver, Vancouver and Boston have hotels on campus. And Atlanta’s project was intended to become part of a broader “airport city” development with commercial office space, a gas station and more hotels on 26.5 acres of airport property, designed to boost Hartsfield-Jackson’s revenues.

Now, it has become one of the airport’s major public-private projects that ultimately failed, along with a recently canceled effort to build a composting and recycling facility at the airport.

On Wednesday, Atlanta airport general manager Balram Bheodari said the hotel development is off.

The project’s demise came not during an attention-grabbing press conference, but in a disclosure to the City Council during a committee meeting as Bheodari explained why a sanitary sewage relocation project was no longer necessary.

Bheodari said there are no penalties to the developer for canceling the project. Majestic did not immediately respond to requests for comment.

For the hotel project, Hartsfield-Jackson underwent a lengthy contracting process and in 2016 awarded a 50-year lease to a joint venture of developer Majestic Realty Co., real estate firm Carter and GPM Investments LLC. At the time, airport officials said the project could amount to a $600 million private investment.

The developers tapped Atlanta-based Portman Architects as designer for the proposed 11-story, 440-room hotel.

Original plans were for an InterContinental hotel, then in 2019 developers announced a deal with Hilton.

But the project didn’t get off the ground. Construction never started, and instead there were years of delays and concept changes.

In preparing for the hotel, the airport has lost out on parking revenue — and drove more frustrations for travelers — because in 2019 it closed the airport’s West economy lot next to the terminal to make way for construction.

Bheodari said the airport has enlisted a consultant to explore other options for the land where the hotels, mixed-use development and gas station were supposed to be built.

He said the airport will also consider reopening part of the West economy airport parking lot for the busy holiday travel period and as the airport embarks on a multiyear overhaul of its parking decks.

The idea for a hotel next to the terminal at Hartsfield-Jackson was initially proposed in 2014 by the airport’s then-manager Miguel Southwell, who saw it as a convenient option for travelers who get stranded when their flights are canceled. Developers also envisioned the hotel hosting meetings and conferences.

In 2017, the airport agreed to a $500,000 annual discount on rent to Majestic as a concession for reducing space for the hotel by a couple of acres. In 2019, the hotel was redesigned with an expected opening date of 2022.

Then, the pandemic drove an historic 60% decline in passenger traffic at Hartsfield-Jackson in 2020. One of the sectors hit hardest has been corporate travel — which would have been a key market for the hotel and mixed-use development at the airport.

In 2020, Majestic asked for an extension of a due diligence period to allow it more time to address the impact of the COVID-19 pandemic on the hospitality, travel and financial industries.

Last fall, the airport and Majestic scaled back the project, abandoning plans for a mixed-use development and gas station. The airport also last year agreed to delay the start of the lease until July 2022, and if the developer could not get financing for the project by then, it could terminate the deal.

The airport had hoped the hotel project would demonstrate the commercial benefits of a public-private partnership to drive revenue and add amenities for travelers by developing airport land.

But such efforts have proved challenging. Hartsfield-Jackson’s long-envisioned composting and recycling facility it called Green Acres has also been canceled, because it could not get approval from the Federal Aviation Administration for the development on airport property, Bheodari said. Compost carries with it the risk of attracting wildlife such as birds that could become a hazard to aircraft taking off and landing.