Virginia-based railroad giant Norfolk Southern is considering relocating its headquarters, and Atlanta is one of several cities said to be on its list of prospects, several people familiar with the matter told The Atlanta Journal-Constitution.
The railroad’s discussions about moving its headquarters coincide with ongoing negotiations by Norfolk Southern to sell downtown land it holds to California developer CIM Group for the proposed redevelopment of the Gulch.
The land sale is considered critical to Gulch redevelopment as well as for Norfolk Southern to proceed with its relocation plans. But the railroad is said to favor other sites in the Atlanta area, and not the Gulch, for a possible future campus.
Landing the headquarters of Norfolk Southern, said to include more than 1,000 jobs, would be a major win for the Atlanta region. In the past 10 years, metro Atlanta has wooed other Fortune 500 headquarters, including financial technology company NCR and homebuilder PulteGroup.
Norfolk Southern has a regional campus in Midtown it recently expanded, and the company has more than 4,700 employees in the state, according to its website.
For the past few years, Norfolk Southern has been in real estate discussions with the city, state leaders, CIM and the Atlanta Hawks for the proposed massive mixed-use development between the Five Points MARTA station and Mercedes-Benz Stadium. In 2017, Norfolk Southern sold its former office complex along Ted Turner Drive to an affiliate of CIM for a planned mix of lofts, shops and restaurants.
The remaining Norfolk Southern land and land held by the city and state are vital to the CIM project.
The land sale discussions with Norfolk Southern evolved to include a potential headquarters relocation to Atlanta, two people familiar with the matter told the AJC. They declined to be named citing the sensitive negotiations.
Representatives of Norfolk Southern, CIM and Mayor Keisha Lance Bottoms’ office did not immediately respond to messages seeking comment. A Georgia Department of Economic Development spokeswoman declined to comment.
In recent days, Gov. Nathan Deal and Atlanta Hawks lead owner Tony Ressler, whose team is a partner in the deal with CIM, have pressed the Atlanta City Council to support a potential 10-figure incentive package for the complicated project.
“We’re hopeful that the City Council will go forward with the Gulch development, and we think great things will happen when that occurs,” Deal said earlier this week.
Deal’s top aide Chris Riley visited City Hall last week to push the project, and state recruiters have pitched the site to other major companies.
A Norfolk Southern relocation from Norfolk, Va., is not a foregone conclusion, one of the people stressed.
The Atlanta Business Chronicle first reported Norfolk Southern’s interest in Atlanta on Friday. The newspaper said the railroad was looking at the Gulch for its future headquarters.
But if the railroad picks Atlanta, the Gulch is not considered the leading contender to land Norfolk Southern’s headquarters, two of the people told the AJC.
Redevelopment of the Gulch is contingent on construction of a massive $500 million platform over the downtown rail lines. The platform, which would create 12 to 15 new city blocks, could take up to four years to build. New office space in the Gulch could take another three years to construct.
A seven-year wait might not fit Norfolk Southern’s timing, two of the people said. Norfolk Southern also has scouted other sites in metro Atlanta, two of the people said.
Negotiations to redevelop the Gulch have occurred behind the scenes for the past few years, but burst into public view last month when the AJC first reported talks for a potential $1 billion-plus public financing package for CIM and its partners.
Atlanta City Council is expected to debate several pieces of legislation involving the Gulch, including a potential 10-figure incentive package, and votes on the matters could come later this month.
Several members of the council have expressed concern about the scope of the incentive package and the impact to future budgets, and it’s unclear if the incentives will pass in their current form.
Tech giant Amazon scouted the Gulch in March as part of its evaluation of cities for its second headquarters project, which the company said could create 50,000 jobs.
CIM wants to build a mini-city that could grow to more than 9 million square feet of office space, 1,000 residences, 1,500 hotel rooms and 1 million square feet of retail space.
CIM has outlined development scenarios ranging from 4 million square feet to 12 million square feet in total that would likely take a decade to build.
Documents obtained by the AJC have shown public financing could climb to $1.75 billion if the project meets its full potential of an estimated $5 billion in new construction. Some observers have said the true incentive package could eclipse $2 billion, as projections released to date appear to low-ball property valuations.
Under the proposed structure, CIM and partners would fund construction of the platform, and as parcels are developed would recoup their investment from sales and property tax growth over several decades.
Ressler, whose brother Richard is a founder of CIM, said in a recent interview he did not know what Amazon’s plans are, but the development partners will proceed whether Amazon picks Atlanta or not.