I was rooting for the Germans. Lots of Atlantans were.
The firm Newport, an amalgam of money of several wealthy families from Deutschland, had for some crazy reason taken a liking to what’s been an impossible task for us locals: Renovating Atlanta’s South Downtown.
Somehow, they saw possibility in an area written off by as sketchy and forlorn. Their gamble — at least $155 million ― was courageous, bold and perhaps foolhardy. Or maybe just ahead of its time.
But their big bet crapped out.
Newport’s investors had stopped funding their venture and last week announced they’re pulling up stakes and are selling their mini-real estate empire here, some 53 buildings and six acres of surface parking. I’m told it’s at a loss.
Their hoped-for purchaser is Atlanta firm Braden Fellman, which fixes up old buildings.
Newport’s journey started in July 2016, when a young development exec took two investors from Hamburg to the intersection of Broad and Mitchell streets and showed them opportunity.
Just two blocks south of Five Points, the historical center of a major American city, the intersection was just some old buildings that Atlanta had not bothered to knock down and a few businesses trying to eke out a living. Broad Street was a collection of old, gaudily painted buildings and a hangout for folks existing on the other side of the law.
The prospectors, noticing the proximity to the new Mercedes Benz Stadium, asked: How many of the buildings can we buy? Probably all of them, they were told.
So they pretty much did. The idea was that if they controlled like 9 square blocks, then they could implement their restorative vision.
Sounds like a plan, right?
Newport’s CEO Olaf Kunkat, who stood at that corner in 2016, answered that question in a recent news release: “Our vision was right but out timing was off, and we have the highest hopes that South Downtown will continue becoming a cool, historic, downtown neighborhood that Atlanta deserves.”
He added that “market changes coming out of COVID, prolonged war in Europe and recent rise in interest rates “ led the investors to “reprioritize capital investments.” That is, scram.
I went to Broad and Mitchell on Wednesday and found Adam Crawford speaking with Stuart Jackson, a longtime resident there.
Crawford, 28, runs Cat Eye Creative, a studio known for some art showings, mini-concerts and events. An event the previous weekend brought in 200 paying patrons. He started as a pop-up space nearby and moved to that corner in January, 2021.
Crawford was always unsure about his future at the corner. The developers last year announced they were building an apartment tower across the street. But Newport always said there was a place in their vision for small entrepreneurs to give the area some cultural flavor.
“They were always, ‘We will find a place for you. There will be restaurants and a coffee shop and stores,’ " he said. “They had a Monopoly game plan. You get Park Place, then Boardwalk.”
Across the street is Aziz Palas, who has run Sunrise Fragrance for 23 years. I spoke with him in 2018 after then-Councilwoman Cleta Winslow bashed the area in a council meeting.
“I’m ashamed of how we look; south of Marietta Street looks like holy hell,” Winslow said at the time.
Palas agreed with that assessment.
“Last year, it was like the wild, Wild West,” he said in 2018. “We had two gunmen running down the street shooting it out.”
Just hours after our conversation, there was a drive-by shooting on Broad Street, wounding three people. The next day, a trail of blood ran up the street.
This week, Palas was sad to hear of Newport’s retreat. “They came in and cleaned up everything,” he said. “There’s no one lying on the sidewalks. No feces. No drug needles.”
Jackson, the longtime resident whose condo overlooks Broad Street, has called 911 many times on criminal activities there. But since Newport has entered the picture, that activity has slowed down dramatically. Newport closed several businesses on Broad, he said, adding, “They wanted to keep it empty, get people to change their habits.”
Newport often talked about “patience” in their investment and looking at the long-term. The company at first looked to redevelop the block on Peachtree Street just south of Five Points but shifted to working on Hotel Row on Mitchell Street because of the progress around the nearby Gulch project.
“They had patience through significant market shifts; they endured and they endured,” Newport’s senior vice president April Stammel told me as we did a quick walking tour this week of developed lofts and work spaces on Hotel Row.
Across the street is the massive building at 222 Mitchell, which Newport hoped to fill with offices. Worked there stopped four months ago. The idea now is to pivot toward residential.
Emory Morsberger, an Atlanta area developer, bought that same building in 2003 with a plan for apartments but was left bleeding after the 2008 financial crisis.
“We saw great potential for apartments and condos there,” he said. “But we thought we were 20 years too early.”
South Downtown, always a generation away.