Tall & Urban News

At the same time as Colony Square, a previous multi-tower development, receives a $278.4 million cash infusion from Holiday Fenoglio Fowler, a long-delayed megadevelopment project proposal – the 16.1-hectare The Gulch – receives Atlanta City Council approval in a tight vote.   
 
HFF Announces $278.4M Financing for Colony Square in Midtown Atlanta 
 
Holliday Fenoglio Fowler, L.P. (HFF) announces the $278.4 million financing of Colony Square, a mixed-use office and retail asset located in the heart of Midtown Atlanta, Georgia. The iconic, 50-year-old destination represents the first mixed-use development in the Southeast and today, it is being reimagined into Midtown’s Living Room – an activated, arts-infused gathering place for the urban neighborhood’s 20,000 residents, 70,000 office workers, 25,000 college students and 6.1 million annual visitors to commune. 
 
The HFF team worked on behalf of the borrower, Lionstone Investments and North American Properties, to secure the loan through Blackstone Mortgage Trust. Loan proceeds were used to retire the existing loan and fund future redevelopment plans for the asset. 
 
Colony Square currently comprises two office buildings (Buildings 100 and 400) totaling 723,470 square feet (67,212 square meters) of office space atop ground floor retail. The redevelopment of the landmark project, which is already underway, will include renovating the existing ground floor retail in Building 100 and 400. The street-level component will feature a collection of unique-to-market retail and chef-driven restaurants, such as Iselle Kitchen + Bar.  
 
The next phase will include the construction of additional office and retail space. The retail component is 79 percent preleased to the highly anticipated food hall and iPic, an experiential movie theater with nine auditoriums, all equipped with 4K digital cinema technology; farm-to-glass cocktails; and a restaurant by three-time James Beard award-winning Chef Sherry Yard. The final phase of construction will include a 100,000-square-foot (9,290-square-meter) office tower (Building 500) with 18,000 square feet (1,672 square meters) of ground floor retail on the northwest corner of the site. 
 
With a highly programmed public realm, streets and merchandise mix, the reimagined Colony Square will feature more than one million square feet (92,903 square meters) of premier office and retail space upon completion in late 2020. The property’s location at the corner of 14th and Peachtree Streets, known in Atlanta as “Main and Main,” is one of the most highly trafficked in the city, exposing the community to more than 25,000 cars and thousands of pedestrians daily. Additionally, Colony Square is located close to the Interstate 75/85 connector and is a short walk from the MARTA Arts Center station. 
 
Atlanta Council Members Greenlight Controversial $5 Billion Gulch Project 
 
Last Monday, 12 November 2018, in a midnight vote before election day, the Atlanta City Council approved a $5 billion proposal to redevelop “The Gulch,” a 40-acre (16.1-hectare) swath of sunken rail yards and parking lots in downtown Atlanta. Thanks to the decision, CIM Group, the Los Angeles-based agency that’s been eyeing the site for some time, will now likely receive a large government subsidy as the sole bidder on the project. 
 
CIM’s big plans for The Gulch came to light in November 2017, when people started speculating the meaning of an impact fee assessment filed with the city that month, which proposed the redevelopment of over 10 million square feet (929,030 square meters) of publicly-owned land next to the Philips Arena. Over time, it became evident that CIM, a company founded by the brother of Atlanta Hawks owner Tony Ressler, was responsible for the filing and wanted to offer The Gulch to the city as part of Atlanta’s bid for Amazon’s HQ2. Despite news that Amazon will not be coming to Atlanta, it seems that CIM’s plans to revitalize The Gulch are still underway. 
 
The scope of the project is nearly unparalleled, comparing only in size to Manhattan’s 28-acre (11-hectare) Hudson Yards neighborhood and CIM’s 27-acres (10.90-hectare) Miami Worldcenter development. Within The Gulch, the developer aims to create 9 million square feet (836,127 square meters) of office space, one million square feet (92,903 square meters) of retail, as well as room for residential and hospitality. The “mini city within the city” will sit atop a podium of parking garages and connect with a new grid of streets and parks. It could include more than a dozen new buildings, completely reshaping the city’s skyline. 
 
Newly-elected Mayor Keisha Lance Bottoms is a large supporter of the project. Leading up to last week’s vote, she started a massive campaign to “Greenlight the Gulch,” asking for the public and the city council to approve the around $1.9 billion subsidy package for the private project. In a tight 8-6 vote, her plan won out. 
 
CIM’s vision for The Gulch includes 1,000 units of residential and 1,500 units of hotel space. (Courtesy CIM Group/Perkins + Will) 
 
Though the government is now on board, many locals aren’t game. Critics of the project say the area should be dedicated to a new transit hub (an idea that started in 2012), while others argue that an increase in luxury housing will raise rents and property taxes in low-income communities near downtown. While Bottoms’s proposal requires CIM to build at least 200 units of affordable housing within The Gulch and invest $28 million into a citywide trust fund for affordable housing, some still hope for a better deal. Many say the process for approvals has been rushed and the public hasn’t gotten enough say. 
 
Since CIM’s plans were unveiled last year, things have moved at an unprecedented speed. Even opponents seem eager to build something in The Gulch, but only if it benefits the city, not the just owners who develop it. Given CIM’s large-scale goals for the site, this will be a fight with the public for decades to come. 
 
For more on this story, go to Arch Paper and Morningstar.