2008 Delayed/Canceled Projects

[whoDean]

Its unfortunate, but with the economic climate as it is, we're going to hear of more and more developers pull out of projects. This is a thread to discuss the ramifications.

[whoDean]

Hotel builder backs out of big Buckead project

By KEVIN DUFFY
The Atlanta Journal-Constitution
Published on: 01/17/08
Barry Hotel Partners has pulled out of the Streets of Buckhead project, the $1.2 billion luxury redevelopment that promises to transform several city blocks where rowdy partygoers used to usher in the morning.

Barry was to build the 1 Hotel and Residences on the northeast corner of Pharr and Peachtree roads and the Hotel Monaco on the southwest corner, the site of the former Three Dollar Cafe.


But now Ben Carter, the Streets of Buckhead developer, said he plans to develop the 1 Hotel and another yet-to-be-announced hotel, but not the Hotel Monaco.

The Hotel Monaco site instead will have a 300,000-square-foot office tower and 80,000 square feet of retail, Carter said.

"Retail and hotel are so intertwined that I've decided I'm going to develop the hotel myself," said Carter, an Atlanta native who helped develop the Mall of Georgia in Buford. "I can control design and schedule. The hotel development schedule was getting in the way of retail.

"No one has the passion for the project that I have, and two developers are harder than one, so we made the decision to part on friendly terms."

Chris Schoen, CEO of Barry Real Estate Cos., said "the project Ben's doing is really complicated, and there are so many issues of coordination. ... Ben ended up making the decision he needed to do two of the hotels himself."

The Streets of Buckhead is under construction in an area that used to be home to nightspots such as Tongue & Groove, Uranus and Lulu's Bait Shack. But after outbreaks of violence, the city cracked down, making arrests and forcing bars to close earlier. Businesses suffered, and properties became ripe for purchase.

Carter said the subprime loan crisis, which has rocked the housing market and is starting to affect some commercial projects in other parts of the country, has not slowed the Streets of Buckhead.

"Our equity is in place right now," he said. "We're currently in the market finalizing the financing for our hotels."

High-end projects are less vulnerable to the subprime fallout, said Marvin Cosgray, president of Buckhead Community Bank, a group of eight local banks.

"These kinds of projects are still strong and doing well," Cosgray said.

Buckhead development remains energized, said Geoff Friedman, president of AFCO Realty, a commercial real estate firm.

"Buckhead is as healthy an urban market as there is in the U.S., without a doubt, for commercial," Friedman said.

Paul Breslin, managing partner of the consulting firm Panther Hospitality, said: "With that project, if anything it might be delayed, but I can't imagine it being completely rejected. There is nothing I know of in the market that would cause it to be denied."

Construction of the Rosewood, St. Regis and W hotels attest to what's been a strong high-dollar hotel market, said Mark Woodworth, executive vice president of PKF Consulting, an Atlanta firm that tracks the health of hoteliers. But the industry, he added, is starting to see softer demand.

"We haven't been concerned about any economic downturn, but what we are seeing is a correction," Woodworth said. "This year ... will still be good, just not great."

Sam Massell, president of the Buckhead Coalition, said "nothing's coming to a stop, but there are adjustments taking place. Buckhead is one of the few [hotel] markets that does well even on the weekends."

Other announced plans for the Streets of Buckhead include an apartment tower by Wood Partners and about 80 retailers. The retail and restaurant components will total about 385,000 square feet, Carter said.

Mark Randall, a director with Wood Partners, said the 350 apartments are still on track.

As for the two hotels still planned, Carter said the unnamed "international brand" will have 100 rooms and 35 condominiums, and 1 Hotel and Residences will have 175 rooms and 32 condos.

Businesses will begin opening at the Streets of Buckhead in November 2009, Carter said.

"It's a story that will evolve and change over time," said Philip Skinner, a partner in the commercial real estate practice group at Arnall Golden Gregory. "It's an endurance race and not a sprint."

[smArTaLlone]

:previous: This is just sounds like Ben Carter deciding to develop the hotel himself.

[mayhem]

Yeah if you read into that article Carter is developing 1 Hotel on his own and changing Hotel Monaco into a 300k SqFt office tower with retail.

[whoDean]

Sembler is downsizing their Briarcliff/N.Druid Hills project:

Sembler spokesman Angelo Fuster said the project is being scaled back in every aspect and Sembler has plans to go forward with the project whether or not it gets the school property it wants.

“We are going to reduce the housing aspect from 3700 units to a little over 2000,” he explained. “We are going to reduce the commercial section from 1.5 million square feet to about 900,000 square feet, the office plans will reduce from 300,000 square feet to about 150,000 square feet and will have one hotel instead of two.”

Fuster attributed the downturn in the economy and specifically the housing market as one of the reasons for scaling back the project, which is still larger than Town Brookhaven, another Sembler mixed use project currently under construction in DeKalb and a few miles away from the Druid Hills property.

[mayhem]

Hopefully Sembler can't afford to build his strip mall in Atlantic Station.

[Behind_Phips]

Yeah if you read into that article Carter is developing 1 Hotel on his own and changing Hotel Monaco into a 300k SqFt office tower with retail.

That parcel where Three Dollar Cafe was in the original plan to be a 300K office, 200 room hotel and 36K of retail. Now 38OK office and 80K retail. My opinion is all of the retail should be on the same side of the road. But that is just me.

[mayhem]

That parcel where Three Dollar Cafe was in the original plan to be a 300K office, 200 room hotel and 36K of retail. Now 38OK office and 80K retail. My opinion is all of the retail should be on the same side of the road. But that is just me.

I did not know office was part of the original plan. That would have been quite a large tower! However, "The Hotel Monaco site instead will have a 300,000-square-foot office tower" - not 380k. Why shouldn't retail line both sides of Peachtree? It would be counterproductive to not have active street uses on all frontages and parcels.

[Behind_Phips]

I did not know office was part of the original plan. That would have been quite a large tower! However, "The Hotel Monaco site instead will have a 300,000-square-foot office tower" - not 380k. Why shouldn't retail line both sides of Peachtree? It would be counterproductive to not have active street uses on all frontages and parcels.

The tower is supposed to be 20 stories. Retail - do you want to cross Peachtree? Road pizza anyone?

[cabasse]

The tower is supposed to be 20 stories. Retail - do you want to cross Peachtree? Road pizza anyone?

they need old ladies in wheelchairs/walkers to stop traffic for people crossing peachtree st...

[Dragonheart8588]

they need old ladies in wheelchairs/walkers to stop traffic for people crossing peachtree st...

Are you suggesting that we use them as speed bumps. That's horrible. ;) J/k.

[smArTaLlone]

Hopefully Sembler can't afford to build his strip mall in Atlantic Station.

They already scrapped the strip mall completely and are developing a new site plan. According to a Sembler representative, bringing the retail up to 14th Street is the goal of the new plan.

[Terminus]

They already scrapped the strip mall completely and are developing a new site plan. According to a Sembler representative, bringing the retail up to 14th Street is the goal of the new plan.

Let's just hope it's not more of that 20 foot deep "liner" retail they did at Lindbergh. That only goes so far towards achieving a dynamic street life, and then only if you also put on-street parking on the street. It should be more of a measure to fill in gaps between deeper stores.

[Andrea]

they need old ladies in wheelchairs/walkers to stop traffic for people crossing peachtree st...

We oldsters have our rights, too!!! The next time you get stuck in a traffic jam on Peachtree, it's probably just me motoring across the street in my Hoveround (http://www.youtube.com/watch?v=-GWZp1U2iS4).

[Behind_Phips]

We oldsters have our rights, too!!! The next time you get stuck in a traffic jam on Peachtree, it's probably just me motoring across the street in my Hoveround (http://www.youtube.com/watch?v=-GWZp1U2iS4).

Andrea,

Before the SoB is finished, I am urging you to get the Life Alert.

http://www.vital-linkinc.com/images/vital-link-peace-of-mind.jpg

http://www.vital-linkinc.com/images/jadenecklace-tn.jpg

http://www.smays.com/photos/uncategorized/2007/11/07/help200.jpg

[Andrea]

Andrea,

Before the SoB is finished, I am urging you to get the Life Alert.


<Settles back with good book and waits patiently for Father Time to correct all inequities.>

:yes:

[Andrea]

Let's just hope it's not more of that 20 foot deep "liner" retail they did at Lindbergh. That only goes so far towards achieving a dynamic street life, and then only if you also put on-street parking on the street. It should be more of a measure to fill in gaps between deeper stores.

Terminus, I completely agree. However, it's a very challenging situation when it comes to thoroughfares like Sidney Marcus.

[JoLeMaMa]

Has the 2nd part of 12CP been delayed or cancelled?

[SteveD]

I've not heard cancelled, but most certainly delayed, by virtue of it not being under construction at this moment.

[CityFan]

Novare lately opened a sales office in the front of 12 TCP. It seems to me they plan a mid to long term in propery sales in this location.

[CB SONO]

Lets not forget the clearing at the corner of Peachtree and North... What has become of the "Premiere at Fox Center?":shrug:

[whoDean]

CityPlace at Buckhead project on hold till market recovers

By JULIE B. HAIRSTON
The Atlanta Journal-Constitution
Published on: 02/02/08
The dismal housing market has prompted a Miami developer and their Atlanta partner to delay the launch of an ambitious Buckhead condo.

CityPlace at Buckhead, spearheaded by the Related Companies in partnership with Cousins Properties, will be delayed until the housing market recovers, a Related executive said Friday.

"Right now, the market is telling us it's not time to start construction," said Lee Hodges, vice president and director of operations for Related's Atlanta Division.

With buyer demand at a trickle, the Buckhead condo market currently contains enough supply to require as much as two years to absorb, Hodges said.

"It's just time to sit. In addition to demand, the banks are saying they're not lending any money," Hodges said.

The project's information center will remain open. Hodges gave no specific date as to when the company might consider starting construction

Experts are saying the current slump in housing sales is likely to persist through 2008.

Hodges said CityPlace will restart its development process when the market recovers.

"We are ready to go. Our building permit is good. Our building is designed," Hodges said. "When the market says go, we're ready to go."

First announced in March 2006, CityPlace is planned for an 18-acre tract on Roxboro Road near Lenox Square. It was Related's first Atlanta project.

The 29-story tower was the first of nine Related projected for the site at build-out. Cousins, which has partnered with Related in Miami, became a partner in CityPlace last year. The companies also plan to partner on two condo towers in Terminus at Peachtree and Piedmont.

[SteveD]

Sign of the times....

[whoDean]

Condo developer Novare Group Inc. is pulling back its Buckhead ambitions.

Novare recently sold its 1.1-acre site near The Roxy Theatre, where it had planned to build a 250-unit high-rise condo tower with 32,000 square feet of specialty retail shops and a 10,000-square-foot restaurant, according to a March 2007 filing with state planners.

Over the past year, Atlanta's appetite for condos and other residential properties went south as the housing market slumped.

Novare President Jim Borders expects "very little if any new condominium starts in '08 and likely '09 as developers face a difficult environment for capital and construction costs. During this period, we expect to see attractive pricing and low interest rates continue to drive market demand until the current supply of homes is absorbed."
Robin Loudermilk repurchased the site -- a parking lot at the southwest corner of Irby and Roswell roads -- March 31 from Novare. It was an $8 million transaction.

"They decided [a condo tower] was not the right thing to do," said Loudermilk, a real estate developer and president and chief operating officer of Atlanta-based Aaron Rents Inc. (NYSE: RNT).

"While we were successful with Wood Partners in completing our sales at Realm in Buckhead, we simply could not get to a construction cost on the Roxy site that would allow for a similar price point," Borders said. "We offered the property back to Charlie [Loudermilk] and Robin, who will be able to use the site in connection with the Roxy renovation, which will be great for Buckhead. We wish them the absolute best in that."

Loudermilk's preliminary plans call for a 15- to 18-story, 270-room hotel.

[Andrea]

Lets not forget the clearing at the corner of Peachtree and North... What has become of the "Premiere at Fox Center?":shrug:

What a fiasco. Every time I pass that corner I grit my teeth. Once again, we've allowed what was a celebrated -- not to mention completely functional -- historic building and turned it into a vacant lot.

:(

[ThrashATL]

What a fiasco. Every time I pass that corner I grit my teeth. Once again, we've allowed what was a celebrated -- not to mention completely functional -- historic building and turned it into a vacant lot.

:(

That's the "hurry up and wait" syndrome. Shows how development isn't really as long range as it appears.

[CB SONO]

What a fiasco. Every time I pass that corner I grit my teeth. Once again, we've allowed what was a celebrated -- not to mention completely functional -- historic building and turned it into a vacant lot.

:(

I completely agree. There was no reason to rip that building down.

[Andrea]

If the money spent getting rid of the building had been spent on sprucing it up, 615 Peachtree would today be a lively, bustling and urbane jewel on the Midtown/Downtown scene. We could be proud of recognizing our city's renowned mid-century architecture, and making it part of our reborn urban landscape

Instead of creating a mud hole surrounded by chain link fence, and a forlorn no-man's land on one of the most important corners in the city.

Yep, that's smart growth for you.

[BabydaddyATL]

Question?

Why do developers keep up the fences after construction is delayed or cancelled? Why not grade the land and plant grass seed. I drove by Wieland's fantasy project a couple of days ago and it looks like a complete mess. Not to mention, it is right in front of one of Atlanta's prime museums.

[netdragon]

They are still going forward with Riverwood II in Cumberland, the Aberdeen in Vinings, and other mixed-use developments in the Cumberland/Vinings/Smyrna area.

Question?

Why do developers keep up the fences after construction is delayed or cancelled? Why not grade the land and plant grass seed. I drove by Wieland's fantasy project a couple of days ago and it looks like a complete mess. Not to mention, it is right in front of one of Atlanta's prime museums.

Probably can't open it up for liability reasons. Though they should probably plant seed and put up more attractive fences if it's going to sit there vacant for a while.

[wxjay]

They are still going forward with Riverwood II in Cumberland, the Aberdeen in Vinings, and other mixed-use developments in the Cumberland/Vinings/Smyrna area. I hope that the grocery store labeled in the renderings for Riverwood will be a Whole Foods or a Trader Joe's. This market is underserviced for those types of grocery stores.

[CityFan]

The following link is to the article about fate of Skyline at Lindberg:
http://atlanta.bizjournals.com/atlanta/stories/2008/05/19/story9.html

[Chris Creech]

The following link is to the article about fate of Skyline at Lindberg:
http://atlanta.bizjournals.com/atlanta/stories/2008/05/19/story9.html

Bad enough to have an empty lot next door from a canceled project - but kinda sad to be stuck with a 4 story hulk of an unfinished building. That's going to really hurt that area.

[whoDean]

Auctions used to fight condo bloat

By KEVIN DUFFY
The Atlanta Journal-Constitution
Published on: 05/29/08

Other communities have used auctions to fight condo bloat. Now it's Atlanta's turn.

The developer of Tribute Lofts, the contemporary condominium complex at Boulevard and Freedom Parkway, plans to auction 40 units June 22 at the Omni Hotel downtown. The event comes less than a year after Tribute Lofts opened.

"This is not a distress or foreclosure sale — it's simply a new way to market our homes," said Greg Wohl, who with his brother, Brian, developed Tribute Lofts. "The market is in a sort of paralysis. Our goal is to get the buyers off the fence."

He compared it to an art or car auction, but in this case the proceeds will pay off a construction loan.

Atlanta is awash in unsold condos. At last year's sales rate it would take about four years to exhaust the supply, according to Atlanta research firm Haddow & Co.

Tribute Lofts has 147 condos, 68 of which have sold, with four more under contract, Wohl said. Last summer, the Wohls said their project was 70 percent sold, but that included under-contract units that didn't close.

Auctioning a big block of condos is not unprecedented in Atlanta. In late 2006, 58 units at the View@Chastain were auctioned, some at a 45 percent discount.

That "wasn't a huge success," said David Tufts, founder of the Condo Store and now president of the Marketing Directors, another condo sales firm.

Accelerated Marketing Partners, based in Boston and Danville, Calif., will conduct the Tribute Lofts auction. It sold condos in Orlando and Jacksonville for Wood Partners, the company behind the delayed Trump Tower project in Midtown. Next week, Accelerated Marketing will auction condos in Arizona for Atlanta-based Trammell Crow Residential.

Jim Kau, assistant professor of real estate at the University of Georgia's Terry College of Business, said an auction signals distress.

"When houses and condos are selling, you don't see auctions," Kau said. "It's usually a sign of desperation. The Atlanta market is completely overbuilt."

Condo prices probably will continue to tumble, he said, regardless of the auction. "I expect the same decline in Atlanta as prices in Miami," Kau said.

The minimum bids for the one- and two-bedroom units at Tribute Lofts represent steep discounts, ranging from 34 percent to 54.5 percent. Determined bidders, however, can quickly turn a screaming bargain into a modest deal.

In March, 30 units at Wood Partners' Solaire condo building in Orlando sold at auction for roughly 20 percent less than the original asking prices. That's the same discount some Atlanta condo buyers are getting now, Tufts said.

Solaire supposedly had sold out in a matter of weeks, but in fact 80 percent of the buyers were investors, many of whom walked away from their contracts. That left Wood Partners with dozens of units, some of which it decided to sell all at once to realize a quick profit.

The Solaire auction took 90 minutes and grossed just under $10 million. It took place in a falling market, so "from our standpoint, it went well," said Charles Barrus, a Wood Partners development director in Florida.

Tufts said the Tribute Lofts auction might trigger a pause in Atlanta's meager condo sales as prospective buyers wait to see what happens. If it goes well, he said, it might start a trend.

"A lot of eyes will be on it," Tufts said. "There's a lot of interest at selling at a higher velocity rate right now."

[Beehan]

Great find on the Tribute auction article... I hope the auction goes well and gets people off the fence! Buy low and sell high, my friends! It only gets better from here as demand catches up with supply while the planned developments are on hold!

[Fiorenza]

Yes, but how low will it go?

[Beehan]

I guess that's the real question! But when the 2br/2ba single family homes in the area are selling for around $400k or the high $300s, it would be really surprising to see brand new 2br/2ba condos dip into the low 300s or 200s, wouldn't it? Especially with so many young professionals predicted to move into the city, traffic will continue to get worse... hopefully awareness about the environment will continue to increase, and the ability to walk places becomes more and more appealing, not to mention that many of these young professionals are accustomed to dorm/apartment living already and don't feel the need to pay more and live far out just so they can have a yard...

All to say that I don't think the demand is going to disappear, and sure, condo values might continue to go down a bit short-term, but personally I can't wait to jump into the midtown community, and I'm hoping that I can bargain for all the upgrades possible! It's a buyer's market, after all!

Personally, I just can't bring myself to pay close to $400k for a small, 1950s single family home that doesn't even have a garage, that backs up to an interstate, railroad track, busy thoroughfare, or hospital development, to name a few!

[Fiorenza]

Where does the fear leave off and the greed kick in?

[Beehan]

Ahh, more questions! There's nothing to be afraid of! Come on and enjoy the city-livin'! Seriously though, I hope it's not greed that's going to kick in. More likely it'll be a shift from looking exclusively at the investment potential of a condo and instead, understanding that there is some risk involved but that other things, such as scrapping the commute and enjoying the spectacular views and cool midtown culture, are worth it.

[ATLaffinity]

trump seems dead

[BabydaddyATL]

trump seems dead

Hardly - See link below. Also, if the Ritz Carlton signs on to the hotel portion this could further help justify development now.

http://www.bizjournals.com/atlanta/stories/2008/03/17/daily28.html

[Beehan]

Here's an article about why it's ok to buy a condo!

http://realtytimes.com/rtpages/20080220_realtyviewpoint.htm

[Beehan]

I recently heard that the properties planned for the Hines and Cartel developments adjacent to Viewpoint have both been sold back to the previous landowner, not to be developed for at least 5 years.

[gskreet33]

I recently heard that the properties planned for the Hines and Cartel developments adjacent to Viewpoint have both been sold back to the previous landowner, not to be developed for at least 5 years.

Oh no!!! What about phase 9 with 456,234,234 more condo units. All those granite countertops and stainless steel appliances will go to waste.