Brian Leary tries to avoid using a four-letter word that starts with “m” and ends in “l” to describe the new Atlantic Station development here.
Mall “is now used as a pejorative term,” said Leary, vice president of design and development for Atlantic Station, a development that opened in October with a shopping mall as its centerpiece. For too many consumers, “going to the mall” means driving to “an enclosed space, which induces stress with a very high level of anxiety,” he said.
Atlantic Station’s centerpiece is a new-style one with several blocks of retail shops, above-store residential lofts, hundreds of new homes nearby and plans for construction of several major office towers and 1,000 hotel rooms.
A city within a city, this mixed-use development has been designed as an alternative to urban sprawl. The former steel mill site, one of the most successful and prominent urban brownfield reclamations in the country according to the Environmental Protection Agency, is a glimpse into the latest thinking about malls.
“It’s the perfect answer to a suburb, where there’s no defined place for community to get together,” said Anita Kramer, director of retail development at Urban Land Institute (ULI), a non-profit research and education organization.
A $2 billion joint venture between Atlanta-based Jacoby Development and AIG Global Real Estate Investment Corp., a division of insurer American International Group, the development accents walking and links to public transportation and is an example of the growing trend by mall developers to include homes and other services to appeal to buyers who want to live near where they shop and play.
Atlantic Steel, a scrap steel mill that made wire fencing, Dixie steel nails and corrugated metal, operated on the 138-acre site for nearly 100 years, oozing metal and industrial waste into the earth and ground water. But if all goes as planned, one day there will be 10,000 residents and 30,000 workers on this project just minutes by subway from downtown Atlanta less than 2 miles away and within walking distance of the city’s High Museum of Art and Symphony Center.
The first residents moved into the planned 3,000 to 5,000 homes in 2003. The housing, which ranges from student rentals which starts at $675 a month to single-family homes costing as much as $700,000, has sold immediately. About 1,000 people live there and another 1,000 are expected within the next six months.
The development didn’t open officially until October, when stores and eateries such as Dillard’s department store, Banana Republic, Jos. A. Bank, West Elm, a Publix grocery store, Copeland’s Cheesecake Bistro and Fox Sports Grill came online. The first Ikea in the Southeast opened last summer. Target is building a store.
Developers long had eyed the site because of its location–it had been considered for an Olympic stadium and a racetrack–but cleanup was formidable.
Retail developer Jim Jacoby, who had become successful working with Wal-Mart and had experience with troubled properties, signed a contract for the land in 1997.
About the same time, Atlanta was choking on its own success. The metro area’s population has doubled in 25 years, from about 2 million people in the mid-1980s to nearly 5 million people today. From 1988 to 1998, about 190,000 acres of forest were cleared for suburbs and malls allowing the region to evolve into the least dense metropolitan area in the U.S. Though New York commuters lead the pack in commute time according to figures compiled for 2003 by the U. S. Census Bureau, the one-way commute of residents of Gwinnett County in the Atlanta metro area is 31 minutes. That ties with Cook County.
In the late 1990s, the U.S. Environmental Protection Agency deemed the air there so bad, thanks in large part to auto emissions, that it stopped Atlanta from getting $700 million in federal funds for new roads. Several private companies decided to leave or halt expansion because of such quality-of-life issues.
All this was a wake-up call, Leary said. Federal officials saw an opportunity to promote smart growth.
“The EPA came to us because on the one hand they were dealing with the brownfield clean-up, and on the other they were shutting down funds for transportation,” he said.
“I was in a meeting and the EPA people were going to bat for this project. `This is what we want to promote. This is the kind of growth we want,'” recalled Michael Pawlukiewicz, director of environment and policy education at ULI based in Washington, D.C.
“Downtowns are coming back now, and they are benefiting from it. But it wasn’t like that when they started,” Pawlukiewicz said.
Where the original intent was to develop a horizontal suburban mall, the development team began thinking in smaller blocks and a different mix, Leary said. Jacoby teamed up with AIG in 1999. It closed on the property, began removing about 165,000 tons of contaminated materials, built a groundwater monitoring system and began studying pedestrian-friendly neighborhoods in Chicago, Boston and other big cities.
In 2001, the developers began signing up builders including Beazer Homes and The Lane Co.
The same year the Atlanta City Council issued $75 million in Tax Allocation Bonds for the first phase of infrastructure, and the Georgia Department of Transportation approved the design and construction of a bridge over 21 lanes of expressway known as the downtown connector–and the only pedestrian bridge in the city–to link the development with a mass transit station in Midtown.
The head of the EPA cut the ribbon at the opening ceremony in October.
There are three areas in the development: The District is the retail center, a mix of low-rise retail and restaurants with lofts overhead, adjacent to the downtown connector on the east; the Commons is a residential section of at least 1,150 condominiums, apartments, townhouses and detached houses around a 2-acre lake and green space; the Village is planned for 400 to 600 mixed-income apartments near the 366,000-square-foot Ikea.
The shopping area looks and feels like a small town or the older section of a major city such as Boston. There is some parking on the street, along with a three-level 7,000-space garage under the shopping plaza. Store deliveries will be made on the lower level, an idea borrowed from Lower Wacker Drive in Chicago, Leary said.
Residents can walk to the retail district or hop a free shuttle that runs 24 hours a day connecting Atlantic Station with the MARTA (mass transportation) stop across the 17th Street bridge at the Arts Center in Midtown.
But will consumers buy it?
A raft of condo towers rising next to the area’s established shopping centers, some near mass transit stops, indicates Atlantic Station faces plenty of competition.
Jacoby is betting the excitement from the work-play-live mix and pedestrian orientation will set it apart.
“It’s all a very walkable environment and very compact. It’s unlike anything in the country,” said John Whitaker, Atlantic Station’s chief executive. “It feels like a small town because of the scale of the buildings, parallel parking and walkability.”
The residential “has been oversubscribed by thousands,” he said. When building began on the Commons in 2003, for example, there were 1,300 names on a waiting list for the condos.
Dan Campbell, 35, was one of the first residents of the 56 Beazer townhouses. He moved into the three-story, three-bedroom unit that he bought for $320,000 “fully loaded” two years ago.
“I do not have a lot of spare time,” said Campbell, who is owner of Hire Dynamics, a staffing company. The concept of convenience in being able to walk to the grocery store, a movie and restaurants was very appealing, he said.
Although he has lived in Los Angeles, Memphis and Minneapolis, this is the first neighborhood which has all of those elements, he said.
Campbell, who married wife Christy last May, said his neighbors are generally a younger group of people, but they are pretty well mixed and blended with various occupations and ethnic groups.
“The other exciting thing about being downtown is that you pretty much can get anywhere quickly,” he said. His suburban office is 30 miles from his home but it takes only about 35 minutes to drive to it because it is a reverse commute. “To go the other way from the suburbs to downtown, it would take 90 minutes,” he said.
Though it has taken longer than expected and may end up costing closer to $3 billion than $2 billion, Whitaker argued, “The timing of the project may prove fortuitous as Atlanta like many large cities is experiencing an in-migration.
“The center city is now an attractive place to live,” he said.
Unlike previous generations that settled in perimeter rings around Atlanta, young people coming out of school prefer living in the city, he said. In addition, the high cost of single-family homes is “pricing some people out of that market.”
ULI’s Kramer said it also dovetails with increasing interest in mixed-use developments in cities and suburbs.
It is a “trend to maximize the return on sites. The sites have the potential for many uses,” she said. “People are attracted to the mix and level of activity” of these town centers, she noted.
The old system of urban planning was like a solar system with the downtown commercial district like a sun and everything else radiating out from it, said Thomas D’Alesandro, senior vice-president of Chicago-based General Growth Properties, owner and development of shopping centers, mixed-use centers and master-planned communities.
“But today’s urban centers are more like a galaxy with a variety of high-density commercial nodes,” he said.
“We still have a ways to go to realize the values forecast for the project,” said Whitaker, adding that the plans are flexible enough to take advantage of the market.
“A lot of future development is density-oriented,” he noted. There is 6 million square feet in high-rise office space planned for the development, but the space could be switched to housing.
Now contributing about $8 million a year in tax revenue to the city, he estimated “when finished, it will be something like $50 million.”
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