Mayor Kasim Reed says the sale of Underground Atlanta to a South Carolina developer “represents a new day” in the history of the long-struggling shopping center and for downtown Atlanta.
“It’s sometimes easy to forget that Underground Atlanta was once a thriving center for entertainment, dining and nightlife. It also happens to be the place where the city of Atlanta started,” Reed said during a Wednesday news conference regarding the sale. “Today represents a new day. Underground Atlanta will once again attract consistent and diverse patronage.”
The Atlanta Journal-Constitution reported on Tuesday that Mount Pleasant-based firm WRS Inc. is under contract to purchase the nearly 12-acre underground site for $25.8 million.
Developer T. Scott Smith plans to convert the beleaguered downtown center into a mixed-use development with a grocery anchor and apartment homes.
The city and WRS anticipate closing on the deal in mid-2015, Smith said, with construction to begin by 2016. The developer said he expects a total investment of $150 million to $200 million.
Reed said the proceeds of the sale will pay off the $8.8 million the Atlanta City Council approved in March to buy out CV Underground, which has 72 years left on its lease to manage the site, and pay off the remaining two years of bond debt.
Reed has said selling the property will free up the city’s debt capacity as he prepares to ask voters to approve an infrastructure bond worth up to $250 million in March.
The mayor said the city isn’t offering incentives on the sale, such as lease purchase bonds.
“You all saw Underground. It was never going to change. It was never going to have (hundreds of millions in investment) and the city was never going to put that much money in it again,” he said.
WRS is “committed to making Underground Atlanta a place people can live and shop every day, instead of a place they visit once in awhile,” the mayor added.
» FLASHBACK FOTOS: Underground Atlanta's history
Smith said his firm was drawn to Underground for its location in the heart of the city and proximity to Georgia State University and nearby government offices.
He plans to give the Underground a face-lift and dramatically change the shops on street level, he said. WRS is now undergoing structural engineering reviews to determine how many shops and apartment units can be built above-ground. The developer did not name the grocer anchoring the project.
Smith said he was well aware of Underground’s reputation when his firm contemplated the property. The project enjoyed great success in the late 1960s and 1970s as a hub for nightlife, and later saw brief popularity when it was reborn as an underground mall in the late 1980s.
But in recent years Underground has fallen behind as development moved to other parts of the city. Locals, many of whom associate the center with petty crime and panhandling, rarely visit the spot outside of its annual Peach Drop. Still, Underground remains a tourist destination, with as many as 12 million visitors a year, Reed said.
Smith said he believes a well-executed development amid a national trend of returning to cities will attract locals back to Underground.
“You can go in every major city in the country right now and you see this happening. I think the trend, if that’s what it is, is people want to be back downtown. People want to be able to walk where they want to shop. People want to walk where they want to go” he said. “We have an awful lot of people in Atlanta. I don’t think we’re going to have any problem attracting people.”
Reed said the city is in talks with MARTA about development plans around the transit authority’s Five Points station. The mayor said he also plans to step up police presence in the area and continue cracking down on panhandling.
“We’re just not going to tolerate panhandling, and it’s a process,” Reed said. “But we believe if you continue to keep crime low, remove panhandlers, build a bigger police force, then more and more capital will flow into the city of Atlanta, and I’ll be able to demonstrate that in short order.”
In addition to the sale of Underground, Reed said he expects to make additional economic development announcements soon.
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