Atlanta’s civic center could soon have a new owner.
A Texas real estate group entered into final negotiations Thursday to buy Atlanta’s money-losing performing arts center, which it plans to raze and replace with a blend of residences, shops, offices and a park that would transform a stretch of Piedmont Avenue.
Houston-based Weingarten Realty’s plans remain in flux, but a resolution approved by the board of Atlanta’s economic development agency describes a nearly $300 million redevelopment.
The resolution set the purchase price at $30 million, far less than some city leaders originally desired. Atlanta Mayor Kasim Reed said $30 million is higher than Weingarten’s initial offer, but didn’t say whether the city is closing the deal at that price.
“I don’t want to put handcuffs on their conversation. I know that’s the minimum that the city will accept as a part of the negotiations,” he said.
The disclosed purchase price is lower than the roughly $40 million Atlanta Councilman Andre Dickens previously said the city was seeking.
Weeks to months of additional negotiations and due diligence are expected before a sale is completed.
Reed and other local leaders have said city properties such as the civic center and Underground Atlanta, which is under contract to a South Carolina developer, will contribute to the revitalization of downtown. City Hall has sought to sell financially under-performing properties to free up cash without a tax increase to pay the debt service on a $250 million infrastructure bond program, which voters approved earlier this year.
Rick Carson, vice president and senior regional director for Weingarten in metro Atlanta, said the company is excited by the nearly 20-acre site’s potential. Downtown development is marching north, Midtown’s growth is starting to move south, and the verve of the Beltline, Old Fourth Ward and Ponce City Market area lies not far to the east.
“We feel like this will become a major part of that growth,” Carson said.
The Invest Atlanta resolution outlined a project with more than 380 apartments, 20 townhouses, nearly a quarter-million square feet each of office and retail space, a grocer and 250 condominiums.
Many of those details are still in development, Carson said, but a park that will be an events center for the project also is planned.
“This particular deal fell right into our wheelhouse in the types of projects we like to undertake,” Carson said.
Invest Atlanta CEO Craig Richard said the Weingarten plan will connect to the surrounding neighborhoods and was the plan that most closely matched desires expressed to Invest Atlanta by area residents.
The civic center area, Carson said, has a shortage of “necessity-based retail,” such as drug stores, specialty retail and restaurants that the project will seek to fill. No retailers have committed yet, but Carson said interest in the project has been strong.
The mayor said he hopes Weingarten will include a performing arts component. Weingarten executive Bill Coats said that is being considered, but nothing has been finalized.
Reed said Weingarten’s original plans consisted of an apartment complex, but that he didn’t believe that type of development was critical given the amount of construction in the area.
“And candidly, because of where we are financially, there was no real urgency to do these transactions,” he said.
After Weingarten returned with a higher offer and new renderings to include a mixed-use development, the city decided to move forward, Reed said.
Weingarten is a publicly-traded real estate investment trust best known as a retail developer and landlord. Its projects in Georgia include grocery-store anchored shopping centers such as Reynolds Crossing in Norcross and Perimeter Village, a Wal-Mart-anchored center in Dunwoody.
The civic center was built in 1967 and its theater seats 4,600. It has played host to the Atlanta Opera and touring Broadway shows, and the campus was once home to the SciTrek museum. In recent years, the site has been popular as a filming location, including serving as the set of “Family Feud.”
Comedian Steve Harvey, the host of “Family Feud,” reportedly was part of a team that tried to buy the site, though the city hasn’t identified other suitors.
A 2012 study of the property anticipated it was on track to lose $400,000 annually through 2017. A sale to a private developer would generate new property tax revenue.
In January, a Reed deputy said Invest Atlanta had as many as eight bids for the property, but that all were too low.
Invest Atlanta boardmember Julian Bene said he has mixed feelings about the deal, though he supported it in Thursday’s vote.
“I think $30 million is really disappointing relative to the low-40s that folks had been hoping for,” he said.
Bene said there was little appetite for shelving the project until the real estate market improves. The site has some challenges that could have affected its sale price, he said, such as well-documented flooding. He also thinks the nearby Peachtree-Pine shelter, which Reed wants to close and replace with a fire station, could have held down property values.
Bene supported moving forward with Weingarten, he said, in order to stimulate development in the area.
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