Atlanta icon-turned-eyesore Underground Atlanta is about to undergo another reinvention. Will the third time be the charm? T. Scott Smith, president and CEO of WRS, Inc., a South Carolina-based developer, is betting it will.
Having put a $25.75 million contract on the 12-acre property in December, WRS has revealed plans to transform Underground Atlanta into a $350-400 million redevelopment with a residential focus. Some 250,000-260,000 square feet of retail space will be developed on the bottom level of Underground, with approximately 1,000 multi-family residential units on top.
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Residential, Retail, and a Dose of Character
Some key elements of the project are:
- A high-rise residential tower on Peachtree and Wall streets
- A residential tower—currently slated to be a hotel—at the corner of Pryor and Upper Alabama streets
- A residential development built above a grocery store along Upper Alabama between Central Avenue and almost to Pryor Street.
Smith hopes that the building above the grocery store will house apartments, but ultimately individual residential developers will decide what those buildings will be. (WRS will serve as the master developer for the project.) A new “parking bridge” over the MARTA tracks will connect the grocery store with an existing parking lot that WRS does not (yet) own.
Smith plans to preserve the historic integrity of Underground while developing the new buildings on top. He hopes that the below-ground retail space will help to convey the Underground’s unique character by including art galleries, restaurants, entertainment venues, and one-of-a-kind shops.
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Will Groceries Be the Game-Changer?
The street-level grocery store underpinning a multi-family building could be the key to this development’s success. The store—which Smith asserts will not be a discount retailer like Walmart— is planned to be about 65,000 square feet. Kroger and possibly Publix are among the top contenders, says an article in the Atlanta Business Chronicle, especially as Kroger looks to expand its downtown presence.
The presence of a grocery store could go a long way toward luring the residential base WRS seeks for Underground Atlanta. There is no full grocery store within a 1.5-mile radius of the site, despite its central location near MARTA’s Five Points station. Meanwhile, Georgia State continues to expand its enrollment, and the number of students who live downtown is growing. These students tend to prize the live-work-play environment and close access to public transit that the revitalized Underground will offer. The proximity of the Atlanta BeltLine may further add to the development’s appeal.
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Preserving History
Yet another potential draw for students and others desiring the character of in-town life is Underground Atlanta’s singular structure and history. Underground was created in the late 1800s when the city built raised streets to cross over train tracks at the center of the city. A number of viaducts cover the storefronts below, lending the area its unique two-level structure. In the 1960s, Underground was a collection of night clubs and bars with a booming night life, thanks to the fact that Fulton County’s liquor laws were more permissive than surrounding counties’ regulations. But then construction of the East-West MARTA line made access more difficult and took up some of Underground’s space, according to an article on www.peachpundit.com, and DeKalb County decided to allow liquor service by the drink. Underground began to languish.
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Then, in 1989, Underground re-opened as a $142 million, tourist-oriented development by the Rouse Company, which hoped to replicate other attractions like Baltimore’s Harborplace. But the effort never really took off, and the development’s ownership eventually reverted to the City of Atlanta. Today, the city loses $8 million annually on Underground, the New York Times reports.
Current Status
As of July 3, according to an article in the Atlanta Business Chronicle, WRS had completed engineering work on the Underground Atlanta site to determine where to locate the high-rise buildings. Smith anticipates that planning and design of the project’s various components will take place throughout 2015 and 2016 and that construction will commence by early 2017. The project will be fully developed within four to five years, he believes.
High Hopes
This third iteration of Underground Atlanta may prove comparable to the highly successful Ponce City Market and Krog Street Market developments, says A.J. Robinson, president of Central Atlanta Progress. If the development can attract the right retailers and a critical mass of residents, Robinson’s hopes may be well within reach.
Blog contributed by Andy Roberts, Associate, with Cresa Atlanta. Andy has a passion for developing custom real estate strategies and is an expert in the Downtown submarket. For questions or more information, contact Andy at 404-446-1866 or aroberts@cresa.com.