South Downtown's New Lease On Life - Part One
Atlanta real estate is starting 2024 off with optimism
Welcome to my freemium newsletter by me, King Williams. A documentary filmmaker, journalist, podcast host, and author based in Atlanta, Georgia. This is a newsletter covering Atlanta's hidden connections to everything else.
* Editors Note *
This article is on South Downtown, Atlanta's latest BIG real estate story. This story features mentions of Jon Birdsong. Jon is someone I know and have been cool with before late December’s announcement of Atlanta Ventures (where he is a partner) buying Newport’s South Downtown redevelopment project.
I did not know anything about the dealings until the public announcement, nor did I have any inside knowledge of the deal.
This article was not written in collaboration with Jon or Atlanta Ventures.
-KJW
For additional background on the topic of South Downtown, please check out two of my previous newsletters:
Crane Watch: RIP Star Bar, new Phipps Plaza, even ClayCo maybe? + other real estate news - Section 5 -9/27/22
Crane Watch: Summer-ish 2023 edition - Section 1 - 9/4/2023
1. South Downtown’s new owners have taken over.
After years of promised development, a very public marketing effort, and an even more abrupt public stoppage, South Downtown recently held its first public engagement. South Downtown is a collection of 50+ buildings in downtown Atlanta, starting south of the Five Points MARTA Station and Underground Atlanta and ending a block from the Garnett MARTA Station.
This first engagement session was a walking tour with new owner David Cummings and his firm Atlanta Ventures, the new owners of the properties. At the same time, the tour itself and most of the questions were led by Cummings's right-hand man at Atlanta Ventures, partner Jon Birdsong. After eschewing most media engagement, Birdsong posted a Tweet inviting all members of the general public to attend a rare early-stage acquisition walkthrough of their newly acquired properties.
The surprise announcement caused a frenzy among various housing and real estate circles in Atlanta, resulting in an estimated 200+ people attending in downtown Atlanta the following Tuesday morning.
A hodgepodge of guests, including several major commercial and residential real estate firms, historians, urbanists, content creators, affordable housing advocates, college professors, and government personnel, including Atlanta City Councilman Jason Dozier, attended the event.
2. What is South Downtown?
You're not alone if you’ve never heard of ‘South Downtown.’ South Downtown is still downtown Atlanta. But it refers to the properties sections south of Alabama Street and the Five Points MARTA Station. This includes the State Capitol, Fulton County Courthouse, Richard B. Russell Federal Building, Garnett Street MARTA Station, and a venue famous for its chicken wings.
Where is South Downtown?
What we know as Downtown Atlanta has been part of Atlanta since the 1850s, beginning with the area of buildings south of Five Points MARTA Station, including present-day Mitchell, Nelson, and Forsyth Streets — where the bulk of properties of the South Downtown development currently reside.
How did this name of ‘South Downtown’ happen?
‘South Downtown’ as both a phrase and geographic region in Atlanta didn’t happen until the 2010s due to the work of former architect and local historian Kyle Kessler. Whether he intended to or not, Kessler popularized the term (he was not the first to use it) amongst Atlanta’s real estate movers and shakers. Kessler’s advocacy for the redevelopment and historic preservation of the remaining historic buildings south of the Five Points MARTA station in downtown Atlanta took off.
‘South Downtown’ versus ‘South of Five Points’ sounded better and better identified the properties in question. The name stuck once German developer Newport began its conquest of downtown by purchasing a cluster of buildings in the same section of downtown that Kessler was advocating for preserving.
3. Hotel Row and Terminal Station, building blocks of South Downtown
Hotel Row, a section of historic designated buildings in South Downtown, comprises some of the former buildings and the remaining grid of the original downtown Atlanta. A site based on its proximity to the intersections of rail lines at the current-day Gulch (now renamed Centennial Yards). Its former main hub of economic activity was Terminal Station, now the Richard B Russell Federal Building.
Hotel Row, one of the few remaining portions of ‘Old Atlanta’
The still-in-existence Hotel Row is a collection of early 1900s hotels and inns along Mitchell Street, across from Terminal Station, Atlanta’s main residential train hub until its destruction in the 1970s. Hotel Row was one of the first stops for travelers into Atlanta and aided in the city's growth.
Terminal Station, the anchor of then-downtown Atlanta, now South Downtown
Terminal Station, the passenger rail depot that could be described as Atlanta’s own ‘Grand Central Station,’ was the economic development anchor for the numerous hotels, inns, bars, liquor stores, and other secondary businesses, all of which are located in the current day section of what is now considered South Downtown.
Once the 1960s and 1970s ushered in the destruction of Terminal Station and the rest of the area for surface-level parking lots, the area hasn’t seen any meaningful community in decades. At the same time, downtown’s broader destruction would see several historic buildings and other businesses torn down for surface parking lots, completing the city-bisecting highways of I-20, I-75, and I-85, allowing people to bypass the area altogether.
In addition to other concurrent factors such as white flight, the central business district’s migration from downtown further north into Buckhead and the newly created northern suburbs. As well as the gentrification of Piedmont Park and the creation of Midtown Atlanta.
For additional background on the destruction of Atlanta’s architecture:
The Guardian US - The lost city of Atlanta - 10/23/18
Atlanta Magazine - Why does Atlanta always tear down its historic buildings? - 3/11/2020
The AJC - Historic preservation? 'Atlanta doesn't get it' - 2/15/16
The decline of South Downtown.
This region of Atlanta’s origin still contains buildings over a century old and had been mostly abandoned, starting with white flight in the 1960s, then aided by the 1970s and 1980s eras of destroying the city to make way for surface parking lots, suburban-styled developments, and a loss of historic buildings. As a result, most of downtown Atlanta was destroyed in the process.
Over the decades, the destruction of more buildings in South Downtown followed to make way for the creation of the Garnett Street MARTA Station, which opened in 1981. The creation of the current Atlanta City Jail began in the early 1990s in anticipation of the 1996 Olympics. Followed by a never-materializing Greyhound bus terminal in the 1990s, with only a temporary trailer operating as a facility next to the Garnett Street MARTA station for nearly 30 years and dozens of city blocks destroyed for surface-level parking.
4. How did Newport get 50+ buildings downtown simultaneously?
The area now known as South Downtown has had many attempts at renaming and rebranding. Since the early 2000s, there have been attempts to revive the area, including a brief suggestion from local developer Emory Morseberger at 222 Mitchell Street in 2004.
But nothing emerged until German developer Newport purchased large swaths of downtown Atlanta starting in 2016 and culminating in 2023. The effort culminated in 53 buildings, 4 surface parking lots, and the former, full city block-long old C&S bank at 222 Mitchell Street.
Leaving Newport, a German developer with no prior experience in the Atlanta market, and then owning a significant portion of Atlanta's historic buildings right under the nose of the Atlanta development community.
Who is Newport?
Newport is a German real estate developer based in Hamburg, Germany. The company specializes in mixed-use retail centers in European cities. South Downtown was the company’s first American foray, as the site was similar to its previous builds.
Newport’s strategy was directionally correct
Like many developers, Newport thought the corresponding city-led residential boom would translate to a demand for office buildings first, followed by some residential, restaurant, and retail.
This made sense at the time, pre-pandemic, but the calculated costs continue mounting with the changes to cities due to the pandemic. This timing was during rising prices, new millennial homeowners/renters, and a continued trajectory of in-town/in-city development. As well as a slow but steady uptick in development projects in downtown Atlanta.
Covid hits and the market cools, Newport eventually must sell
But with the abrupt start of the pandemic, the project languishes. It eventually led to losses. Newport pulled out of the project after several stops, including flooding, rising construction costs, labor shortages, COVID-19, a de-emphasis on offices, and millions more needed infrastructure repairs.
The company was thought to have come to a deal with local renovation specialist Braden Fellman before the deal fell apart last summer. Newport then announced that it would put all 50+ buildings on public auction.
This would lead the Atlanta tech team of David Cummings, founder of Atlanta Ventures, and his partner Jon Birdsong to step in at the last minute to organize a sale to keep all properties, including 222 Mitchell Street, up for auction. Beginning in late fall and completing a few weeks ago, South Downtown has a new owner, this time from Atlanta’s tech leaders.
5. Who are David Cummings and Jon Birdsong?
David Cummings
David Cummings is the founder of Atlanta Tech Village and Atlanta Ventures. Cummings is seen as one of the leaders of the Atlanta tech scene.
Cummings, a serial entrepreneur, moved to Atlanta in 2002 after graduating from Duke University and sold his automated marketing firm, Pardot, for $95 million within a decade. After selling his company, he started Atlanta Tech Village, a tech-focused office and business incubator.
Atlanta Tech Village and Atlanta Ventures
The incubator helps tech startups gain funding and talent and develop their businesses. The company has incubated dozens of Atlanta-based firms with the two biggest Salesloft, an online sales platform, and Calendly, an online scheduling management software program.
After the continuing success of Atlanta Tech Village, Cummings founded Atlanta Ventures, a direct VC arm of Atlanta Tech Village.
Jon Birdsong
Jon Birdsong is a serial entrepreneur and partner at Atlanta Ventures. He is the most public-facing member of the partners and is often seen on behalf of AV and ATV. He has been the most public-facing member of the South Downtown project. Including leading Tuesday’s tour downtown.
Birdsong is involved with two golf-related companies, Greenzie, a lawn management software program, and Intown Golf Club. Birdsong hosts two podcasts with Atlanta business, civic, and social leaders called The Atlanta Story and Five and Thrive.
6. South Downtown has multiple options. It also will need multiple partners.
With a project of this size and scale, how Cummings, Birdsong, and AV approach this problem will be paramount to its success or failure. As a result, the project will likely greatly expand its options for the partnership, a sharp detour from the closed-off style of the previous owner, Newport.
What the city gets from South Downtown’s development
For the city of Atlanta, the benefit of seeing movement at South Downtown is multilayered. The city wants to be ready by the start of the 2026 World Cup and finally start the long process of revitalizing downtown.
In this new era of South Downtown, Atlanta Ventures seems more willing to partner outside their offices. As a result, varying special interests from the city itself, the broader Atlanta business community, commercial developers, residential real estate firms, and the Atlanta tech scene could all be in a win-win situation should this work.
First, it provides new housing units, including one site that would be marked as a mixed-use affordable housing building.
Second, it would provide a new base of residents, providing a wider tax pool for the city’s goals of transit, parks, infrastructure costs, and school funding.
Third, downtown Atlanta desperately needs white-collar workers to serve as the basis for the long-term revitalization of downtown.
South Downtown could count toward Mayor Dickens’s affordable housing goals
Additionally, with the stated goal of the Dickens administration to expand overall housing options and build 20,000 affordable units citywide, South Downtown provides an immediate win. Mayor Dickens could use all of downtown Atlanta as his launching pad for his housing initiatives. This includes purchasing the 2 Peachtree buildings on Marietta Street, the proposed 27-floor tower at South Downtown, and Centennial Yards.
How South Downtown could benefit other real estate developers
The South Downtown walking tour featured major league developers and firms. To an incentivized, more well-established Atlanta developer to work directly with Atlanta Ventures as a purchaser, partner, or both could be a win-win for both parties. All in a potentially new, shovel-ready, in-town real estate market, where they would have exclusivity and local government buy-in.
The team at Atlanta Ventures will likely be heading up quick conversations with several financiers, construction firms, developers, and city officials in rapid succession. Cummings himself is already holding tours of properties to would-be tenants and finding partners to renovate key properties.
All parties could benefit from a potential sale of some South Downtown properties. Properties that have already done the leg work of assessments, partial renovations, acquiring permits, and part of an already established neighborhood master plan. In addition to a more favorable lending market as recession fears have cooled* and the Federal Reserve Bank promises to drop interest rates. Combined with a motivated buyer in Atlanta Ventures, saving months of inaction and likely millions in development costs.
Atlanta Ventures could sell some of the 53 properties or 4 mega parking lots to developers who’ve either been priced out or cannot build in already hot markets such as Midtown, the Westside Corridor, the BeltLine’s eastside trail, and Buckhead. Giving South Downtown the capital, institutional know-how, and speed to move the project forward.
The business community’s potential of South Downtown
For decades, downtown has struggled to remake itself, a noticeable difference in comparing Atlanta to other cities across the US.
The development of South Downtown for the business community could provide an expansion blueprint for future incubation and renovation projects. It would also see an opportunity to have a specific city region dedicated to design, amenities, and resources for white-collar workers. A successful South Downtown means a greater pool of workers, which would benefit all firms.
In addition to having a broader distribution of businesses, this could lead to a lower tax burden on bigger businesses and/or those with financial incentives to be under less scrutiny by would-be activists and investigations.
How does the Atlanta tech scene benefit from South Downtown?
Cummings, Birdsong, and Atlanta Ventures’ entry into the major leagues of Atlanta real estate could represent a change in the market by having a tech-led development team at the forefront of a major real estate project.
This would differ from the university-led build of Tech Square in Midtown, where Georgia Tech takes the focal point: Georgia Tech and its access to faculty and studies is the draw. South Downtown’s draw could be focused on startups and already-established tech firms.
The Atlanta tech scene could benefit from a new hub for startups. It would also provide a physical district and go-to area for those unaware of the Atlanta tech scene. Tech Square in Midtown, near Georgia Tech’s campus, and Atlanta Tech Village in Buckhead are not easily found or known by the general public.
South Downtown could be the easily identifiable tech district, similar to established districts such as Station F in Paris, where the world’s largest tech incubator and coworking space has led to a redevelopment of an entire section of the city that has been renovated to accompany tech startups.
South Downtown could take a page from the role of development based on the redevelopment of Union Square and Market Street into the tech hub of San Francisco. A hub that led to a boom in retail, restaurants, residential, and office space in the area.
How do colleges benefit from South Downtown?
South Downtown’s location is near Georgia State University’s main campus downtown and within a short ride distance of the five HBCUs that comprise the Atlanta University Center (AUC).
The AUC as a Catalyst for South Downtown
The AUC is unique because no official tech-first schools are located in Atlanta. And the most prestigious tech-focused HBCUs, North Carolina A&T and Florida A&M, are hours away. The announced Propel Center, the AUC’s first tech-focused and joint-operated tech facility, is slated to begin construction soon, which could lead to adding a future cohort of would-be interns and future tech workers near Atlanta’s newest tech hub.
Georgia State as a Catalyst for South Downtown
While Georgia State University, the state’s largest and tenth most-populated college in the US, could be a partner. Under the previous presidents, Carl Patton and Mark Becker, GSU has leveraged the university’s corporate partnerships to grow the main campus presence downtown. This has included renovating existing properties, acquiring land for future development, and building new facilities.
Now under new president Brian Blake, the university looks to finally start on its COVID-19-delayed master plans for its downtown campus.
GSU, a traditional urban research university, hasn’t made much inroads into the world of technology development, but with the rise of South Downtown, it could. The university has pivoted over the last twenty years to become the state’s premier film and television program and is still expanding its offerings. There is a possibility that the university could do the same by expanding into tech-based programs in South Downtown.
GSU’s Summerhill project as a case study for South Downtown
Over the last twenty years, the campus has expanded its footprint throughout downtown Atlanta and has experience developing its projects. Over the last decade, GSU has expanded into the residential and commercial developer role by partnering with local development firm Carter USA.
The Summerhill mixed-use redevelopment project in South Atlanta is a multi-decade-long project focused on creating a new micro-community within the former parking lots of Turner Field, the former home of the Atlanta Braves.
South Downtown's new lease on life - Pt. 2: The Mark Toro and Jamestown schools of development as a missing middle strategy
Here’s to a new lease on life for South Downtown!
-KJW
Thanks King! Always love your articles, especially on urban development! Looking forward to part 2.