South Downtown entrepreneurs add 2 buildings to huge portfolio

Since taking the reins on 10 blocks of Newport RE’s former South Downtown holdings, the tech entreprenuers who head Atlanta Ventures have said acquiring even more properties isn’t out of the question, should the right opportunities come along.

Once again, they’ve put their locally harvested money where their mouths are.

Atlanta Ventures recently added two Peachtree Street buildings totaling more than 20,000 square feet near Underground Atlanta to their portfolio, with plans to likely activate them as construction home bases as soon as possible. The team’s holdings include more than 50 buildings and 6 acres of parking lots south of Five Points MARTA station, just east of Centennial Yards’ remake of the Gulch.

Following about three months of negotiations, Atlanta Ventures, led by David Cummings and Jon Birdsong, now owns 77 Peachtree St. (13,300 square feet) and the building next door at 81 Peachtree St. (8,800 square feet), which is known as The Bootery and has been empty for years. Both were publicly listed for sale and are surrounded by buildings the developers already own—“It was really two missing teeth in the portfolio,” as Birdsong describes it—and are not considered historic, so historic tax credits won’t apply toward their renovations.

Atlanta Ventures has hired two project managers expected to start work early this month, and plans call for those employees to use the Peachtree Street buildings to manage construction along Hotel Row almost immediately.

“We’re going to get in there, do work to understand the condition [of the buildings], and likely use them for construction offices,” says Birdsong.

Elsewhere, work is revving up on what’s called “Project Elle,” an L-shaped collection of more than 25 buildings that begins at Ted Turner Drive/Mitchell Street and bends around to Broad Street and up to Five Points. Plans call for converting that to more than 100 adaptive-reuse apartments, 150,000 square feet of commercial space, and 31,000-square-foot Atlanta Tech Village—Sylvan, the downtown coworking answer to Buckhead’s tech startup hub. (The latter component is scheduled to break ground this month, says Birdsong.)

Atlanta Ventures’ goal is to be under construction on the majority of those buildings by the end of the year.  

“We are using historic tax credits, so there’s some stuff out of our control,” says Birdsong. “[Permitting paperwork] is being submitted as quickly as possible… obviously, with everything on Hotel Row, [we want to] make sure [it’s] active, alive, and vibrant for the 3.5 million people that are coming here for the World Cup in 23 months.”

Another focus is a turning a parking lot near the intersection of Mitchell and Broad streets into “a beautiful kind of town square” before the World Cup, says Birdsong.

“We’d love to have all of [Broad Street holdings between Mitchell Street and MLK Jr. Drive] complete in time for the World Cup,” says Birdsong. “We just don’t want to over-promise and under-deliver. There’s a lot of those buildings we have architects working on actively right now, analyzing what can be done, what can’t, and how do we leverage historic tax credits for those.”

As Birdsong acknowledges, the South Downtown project entails a lot of moving parts at the moment. Here’s quick Q&A rundown on other aspects:  

Regarding the largest building in the portfolio, 222 Mitchell, which was purchased in foreclosure in March. It was previously under construction as an office conversion, but Atlanta Ventures’ plans now call for housing:

“There have been three architects that have put fresh eyes on it, and we’re taking all of July to analyze and sharpen our pencil around the model on whether it can fit our yield criteria,” says Birdsong. “We’re going to be patient, but we’re acting with urgency. 222 is a huge part of the plan, and we’ve got to figure out how to fit the puzzle pieces together so that it makes sense. [Because historic tax credits won’t apply], that is a traditional real estate play.”

The outlook on Crates—South Downtown’s record store and third business—opening along Hotel Row. (The concept, with its focus on used records, is being put together by Daryl Harris, who operates Little Five Points staple Moods Music.)

“We had meetings with contractors [the last week of June], and I would say September [for an estimated opening date],” says Birdsong. “We’re down to the nitty-gritty details on budget and, ‘Are we keeping this in, or out?’ from a design perspective, which has been really exciting.”

On the South Downtown project’s debt-free financing, culled from the original Atlanta Tech Village’s start-up successes:

“This is all money and dollars from businesses started on Peachtree Street and Piedmont Road," says Birdsong. "This is all local money. That can’t be iterated enough, as we’re as local as it gets. [Cummings] is going to invest nine figures cash into Project Elle. We’ll call it $100 million.”

On transparency in the redevelopment process so far:

“We’re a pretty open-book. We’re not trying to do anything under people’s noses, but we’re also going to make some tough decisions that not everybody’s going to like. But it’s all for the downtown that the majority of Atlantans want, which is active and vibrant—and safe, that’s a big one.”

Miscellaneous:

Atlanta Venture is currently in talks with potential tenants for the six Hotel Row spaces that haven’t been leased. Those could range from soul food and pizza to Cuban cuisine and more, according to the property owners.

Around the corner, Birdsong believes the section of Broad Street between Mitchell Street and MLK Jr. Drive, with its historic brick structures and intimate scale, has potential to be the most “charming and unique block” in the entire city. 

[CORRECTION: 9:44 a.m., July 8: This article has been updated to properly identify 77 Peachtree St., the scope of South Downtown in terms of blocks, and that the project is not debt-free. Explains David Cummings: "We'll have a limited amount of debt to maintain flexibility."] 

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