After last week’s post announcing the new Atlanta Tech Village location in downtown Atlanta, the most common question and refrain that I heard from others is, “Why downtown?” Like many of my fellow Atlantans, I’ve historically avoided downtown, other than going to the occasional corporate or sporting event. Like many downtowns around the country, ours has struggled for many years but was serviceable until Covid hit and dramatically altered the landscape. The last 10+ years in Atlanta have really opened my eyes to how regions of the city can be dramatically upgraded and enhanced, with the two biggest makeovers being Midtown Atlanta and the Beltline. After $10 billion plus of investment in each of those areas, the number of residential units, restaurants, retailers, and overall walkability and livability of those areas have skyrocketed. When friends come to town now, the first thing I want to show them is the incredible development on the Beltline around Ponce City Market and Krog St Market, especially how Atlanta is making important steps for areas of the city to be truly walkable, something that’s always been a nagging challenge for the region.
Now, while the Beltline and Midtown revitalization have achieved extraordinary results, I hadn’t spent any time studying or thinking about downtown Atlanta. On the surface, it seems like downtown Atlanta as a live-work-play region would be a no-brainer infrastructure-wise. There are a large number of subway stations, three interstates that touch it, and miles of dedicated bike lanes. There’s a historic grid laid out in the early 1840s that is walkable, fairly flat, and easy to get around. From an entertainment point of view, it’s the home of the Atlanta Falcons NFL team, the Atlanta United MLS team, and the Atlanta Hawks NBA team. In addition, there are hundreds of concerts and entertainers every year that come through downtown at State Farm Arena, Mercedes-Benz Stadium, the Tabernacle, Rialto, and multiple music venues at Underground Atlanta. Based on the raw number of concerts alone, downtown is easily the live music capital of Atlanta. Finally, the Georgia World Congress Center is the fourth largest convention center in the country, and downtown has over 14,000 hotel rooms along with the 22-acre Centennial Olympic Park, Georgia Aquarium, College Football Hall of Fame, Center for Civil and Human Rights, World of Coca-Cola, and much more. Again, downtown should be a successful, thriving heart of Atlanta.
Only there are a number of challenges that have to be overcome for downtown to live up to its potential. The first challenge is that there are very limited residential options. Downtown was built as the central business district and has 15+ million square feet of office space, and unfortunately, most of it was built between the 1960s and 1980s in the John Portman style such that the buildings are cordoned off from the street in a cloister garden format and create a harsh environment when not inside the structure. Because of these large floor plates, the buildings are not convertible to residential. With the work-from-home and remote work trends, there are a handful of condo and apartment buildings, including some historic ones that have been converted over the years. Going forward, downtown needs to become a residential neighborhood, and thousands of new residential units need to be built or converted from the office buildings conducive to conversion.
The second challenge is that downtown has an overabundance of parking lots and parking decks. There is too much parking. This manifests itself in poor land use where a lack of density hurts the neighborhood. It’s also challenging in that most of these parking decks and parking lots act as a covered land play where there’s no need or impetus to sell because the property values are so low, and only a modest amount of parking rental income will more than cover the annual costs. In addition, many of these parking lots and parking decks have been owned by families for generations, and their basis is so low that they’re better off just not doing anything versus helping contribute to the revitalization of downtown.
The third challenge is the doom loop in the emptying out of the office buildings and how that then translates into the local restaurants, dry cleaners, and other service businesses going out of business. Then, when those buildings are sold at dramatically lower prices, the property taxes decrease, and the city and county have fewer funds to work with to help the neighborhood. This downward spiral continues indefinitely. With 15+ million square feet of office space, it’s hard to see the office market downtown thriving anytime soon. Even if you buy a building at a dramatically lower rate to modernize it and make it attractive for tenants, it’s going to cost $200 dollars per square foot to renovate. If you buy a 100,000 square-foot building for $100 a foot ($10 million), just to make it attractive and make it desirable space, it’s going to cost another $20 million to upgrade it, and now you’re at $300 a foot, and the market will not bear that for many years.
The fourth challenge, and ultimately the number one challenge, is the centralization of homeless services in the region in downtown. This is exacerbated by the unofficial homeless support services that create an environment whereby multiple times a day and in multiple parts of downtown, it looks like a refugee camp with so many people waiting in line for food and general help. It really is heartbreaking. Outside of those periods of time for services, the concentration of homeless services in downtown also results in hundreds, if not thousands, of voluntarily homeless people. A voluntarily homeless person is somebody who refuses services from the faith community, the nonprofits, and the government. Voluntary homelessness is downtown’s most pressing and most obvious issue with no easy solution.
On the momentum side, there are a number of excellent things happening in downtown right now. Number one is Georgia State’s continued investment in the community with the announcement of their Blue Line, similar to a Beltline-type experience. Georgia State is building out a series of paths throughout the urban campus focused on safety, security, eyes on the street, and everything else you would want in a great college experience. Georgia State is the largest university in Georgia.
The second item on the momentum front is the funding of the Stitch, whereby an initial 4.5 acres of current interstate will be covered with a new park right in the northern part of downtown, and that project is scheduled to begin in the next few years. More parks and plazas will spur development in the area.
The third item on the momentum front is the continued investment in government-sponsored affordable housing through 2 Peachtree St. and a number of related initiatives. The main idea is to combine a number of different government programs and grants to put a capital stack together to convert some of the buildings, as well as build new housing near Five Points MARTA station.
The fourth item on the momentum front is Centennial Yards building a major development in the Gulch, with two 18-story towers halfway done already, and breaking ground on a new entertainment district that will be nearly 500,000 square feet, including the new Cosm 5,000-seat concert venue adjacent to Mercedes-Benz Stadium and State Farm Arena.
Ultimately, downtown Atlanta is the front door to all of Atlanta. Between the corporate events, the convention center, the stadiums, the concert venues, the hotels, and museums, over 50 million visitors per year come to downtown Atlanta. Downtown is the first and only impression of Atlanta for many guests. We chose to put our second Atlanta Tech Village location in South Downtown not because it was the easy thing to do but because it was the right thing to do. Downtown needs entrepreneurship and innovation. Downtown is struggling, and Atlanta has been and always will be led by entrepreneurs, business leaders, and civic leaders. Atlanta Tech Village is going downtown because it’s the biggest challenge and the biggest opportunity to help entrepreneurs and Atlanta.
Entrepreneur
via https://www.aiupnow.com
David Cummings, Khareem Sudlow
