The pending sale of Underground Atlanta to a South Carolina developer will be delayed again, people familiar with the matter told The Atlanta Journal-Constitution.
The planned closing had been slated for Thursday after being moved from last week. It’s unclear how long the delay might last.
An executive with Underground buyer WRS Real Estate Investments said the firm plans to hold a community engagement meeting with downtown groups Jan. 14 and a sale will not be completed before that time.
The city wants to sell Underground to move the money-losing mall off its books. The complex is a key part of future downtown revitalization and a number of groups are now scouting the city’s core looking for redevelopment opportunities.
WRS executive Kevin Rogers said the city and the developer have worked through a number of complicated land issues and still must resolve other details before a closing can be finished.
“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 are the authorities that will convey the property from the city to WRS, and a DDA board vote is necessary to complete the transaction, one of the individuals said. The people were not authorized to speak publicly about the matter.
It is likely the board will not meet to discuss the Underground sale to WRS before its next regularly scheduled meeting Jan. 19.
Rogers declined to put a firm date on a deal, but said it would happen “as soon as possible.”
Mayor Kasim 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.
Rogers had said last month his company would complete the sale soon after New Year’s Day.
Messages left Tuesday and Wednesday with Reed’s representatives were not immediately returned.
Negotiations are ongoing and the delay reflects the complexities of the downtown property, which is bisected by bridges and rail lines.
WRS has been engaged in negotiations with the city for more than two years to buy the struggling downtown mall. The company has proposed a $300 million overhaul involving apartments, student housing, a grocery store, a hotel and other retail.
Rogers said the community meeting will provide a fuller outline of what WRS wants to build. It will be held Jan. 14 at 10:30 a.m., at Underground and local residents are invited to attend.
Matt Vogt, a spokesman for Invest Atlanta and the Downtown Development Authority, said no meetings have been scheduled this week, and the next opportunity for authority business to go before the board is the regular monthly meeting on Jan. 19.
The long-simmering deal with WRS was announced in December 2014, and the company had 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 also 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.
And just 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.
WRS released renderings last year showing a grocery store, high-rise student housing, a hotel and apartments over a retail core at Underground. But Rogers said in December the development plans remain in flux, and the team expects to begin the process of seeking any necessary rezoning and building permits soon after closing.
Rogers estimated at the time planning and permitting could take 18 months.
Other development firms have emerged as potential suitors if WRS can’t close the deal. In December, the AJC reported one of them is the U.S. arm of German development and investment firm Newport Holdings that counts among its leadership two former executives of Jamestown, the group behind Ponce City Market.
Newport is the sole investor behind the pending or completed sales of about 20 downtown buildings that were previously identified as ones targeted by WRS to expand the Underground footprint.
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