Centennial Yards’ rise heralds a new downtown Atlanta

The idea started with Tony Ressler a decade ago as he and partners cemented the deal to buy the Atlanta Hawks. He said he knew the NBA franchise was a slam dunk investment in a city ascendant from the Great Recession.

But Atlanta’s downtown was struggling. Opposing teams didn’t want to stay there, and there was little for fans to do before or after games. Outside the arena, Ressler saw the Gulch as a hole in the heart of the city that needed to be repaired.

Now, nearly 10 years in, Ressler said that healing is well underway.

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

“These are not fake cranes. Those are not fake buildings,” Ressler said in a recent interview. “This is happening.”

What started with Ressler’s frustration that a great American city lacked a vibrant downtown has led to this — a new intown neighborhood and billions in investment that, if successful, will change the trajectory of the city.

It’s taken an unprecedented public-private partnership, the deep pockets and development acumen of national development firm CIM Group, and the will to build where few were willing or able to try.

The Gulch has become one of the South’s largest construction sites. More than a century ago, the street level in parts of downtown was lifted above the rail lines. Today, about a fifth of the 50-acre site now meets the level of those surrounding viaducts.

Future phases will stitch together a street grid connecting the stadium and arena to the Five Points MARTA station.

Atop the new platform of concrete and steel are the frames of a four-building entertainment district. Those include a 5,300-seat concert venue by Live Nation, an immersive theater called Cosm, a second high-rise hotel and a retail building. A central gathering plaza that can hold 3,000 people is also taking shape.

Credit: Courtesy rendering

Credit: Courtesy rendering

Credit: Courtesy Gensler

Credit: Courtesy Gensler

“If you rewound a year and look at what it is now, it’s insane to see what has been created in a very short period of time,” said Brandon Dexter, CIM vice president of construction. “It just didn’t exist.”

While phases of Centennial Yards will still be under construction through the early 2030s, Atlantans and a global audience will get a taste of what’s to come this summer when the city plays host to eight World Cup matches.

Hotel Phoenix and its restaurant and rooftop bar and several other eateries should be open and the plaza activated for the event. Cosm is aiming to open in time as well.

The entire project, to be built in multiple phases, is expected to span 6 million to 7 million square feet.

Before it could start, the partners and CIM, co-founded by Ressler’s brother, Richard Ressler, had to convince the City Council and skeptical public to back the project with some $1.9 billion in expected future sales and property tax revenue to be generated within the project.

After the city approved the deal in 2018, development was slowed by the COVID-19 pandemic. Some office towers have been shelved, at least for now, with earlier phases focused on experiences, lodging, food and residential.

“Downtown is going to be transformed massively for the better,” Tony Ressler said. “That’s something every Atlantan will be proud of.”

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

The project’s investors feature several Hawks executives, Falcons owner Arthur Blank and celebrities, including Shaquille O’Neal, Vince Carter, Usher, 2 Chainz and Quavo. Ressler said “global ambassadors” help spread the project’s influence beyond just its slice of downtown.

“Food, music, sports — those are powerful experiences,” said Grant Hill, an NBA Hall of Famer, Hawks co-owner and one of Centennial Yards’ earliest named investors. “It’s exciting that all of that will take place here, not just for tourists but for Atlantans.”

Centennial Yards is the largest of several ambitious projects aiming to inject new life into downtown, which has steadily seen its vibrancy fade since it lost its passenger rail terminals in the 1970s.

Georgia State University’s expansion, the sports venues and attractions, such as the Georgia Aquarium and Georgia World Congress Center, have boosted downtown, but the city’s core needs more.

“Downtown can’t just be a destination,” Mayor Andre Dickens told city leaders during the city’s inaugural Downtown Day in October. “We have to make it a true neighborhood of choice, a place where people want to live, work and play.”

End of an era

Atlanta is one of the rare major cities built on train tracks rather than a waterfront.

Downtown rose around the rail industry and the downtown Atlantic Union and Terminal stations, said Kyle Kessler, director of policy and research at the Center for Civic Innovation. The Gulch was the center of commerce, transporting passengers to nearby hotels, shops and businesses.

Kessler compared the economic power of the railroads and stations to Hartsfield-Jackson Atlanta International Airport today, representing the region’s main economic engine.

Credit: Atlanta History Center

Credit: Atlanta History Center

As car culture rose, train ridership declined. Both massive train stations were demolished in the early 1970s, which Kessler said ended the period when people needed “to stop in downtown versus just passing through downtown.”

“It was the final death knell of that era of downtown, that portion of downtown, being the center of activity,” he said.

Egbert Perry, the CEO of longtime Atlanta developer Integral Group, said downtown’s decline was slow, but steady, and ran counter to the rise of Midtown.

In the early 1980s, downtown was bolstered by a robust banking sector and longtime employers, while Midtown was unrecognizable from today’s high-rise district. In the 1990s and early 2000s, downtown lost nearly all of its banking headquarters to Charlotte, and cheap land in Midtown helped spur the urban neighborhood’s revival.

“Once that economic tide started, it just swelled and swelled,” Perry said. “Midtown’s fortune was downtown’s loss.”

The pandemic further exacerbated those issues, sending white-collar workers home and leaving downtown’s stalwart shops without steady customers. It spurred concerns that downtown would fall into what economists call an urban doom loop, where a city’s business district is caught in a cycle of decline.

Perry said bold action is needed to reverse those effects, especially given what downtown represents for metro Atlanta.

“If you let the heart die, it’s not long before the whole region dies,” he said.

Building belief

Even during downtown’s better days, the Gulch has befuddled developers. And many have tried.

By December 1982, at least 13 attempts to build something beyond parking lots in the Gulch had failed, according to an AJC article at the time. The Centennial Yards proposal easily could’ve joined the list of scuttled efforts.

Jon Birdsong, a co-founder of Atlanta Ventures and Atlanta Tech Village, said native Atlantans like himself had become numb to downtown announcements. He and his business partner, David Cummings, now own several blocks of century-old buildings next to the Gulch called South Downtown that they’re revitalizing. But he understands the hesitation to believe in change.

“I’m almost weary and leery of promising anything because I’ve been promised so much my entire life about downtown’s comeback,” Birdsong said.

But this wave of investment is tackling challenges others haven’t.

Brian McGowan, the CIM executive tasked with bringing Centennial Yards to life, isn’t surprised people doubted whether anything could be built in the Gulch, let alone something transformational.

Credit: Ben Gray

Credit: Ben Gray

“(Those prior plans) all didn’t come to fruition for one reason or another, but I can tell you why,” said McGowan, who is also a Centennial Yards investor. “The site is super complicated.”

The property features active freight lines, a MARTA tunnel, air rights restrictions and parking entitlements for nearby federal and sports venues. Beneath the surface lie remnants of Atlanta’s original sewer system, including terra cotta pipes. The typical power, water, gas and utility connections needed to be installed by CIM from scratch.

Even with all those boxes checked, the entire development has to be elevated 40 feet to meet the surrounding viaducts. That’s no small feat.

“Our job is to make it look like it’s not a big deal. It’s something we do every day,” said CIM Group co-founder and principal Shaul Kuba. “But it is very complicated in the scope of construction.”

Los Angeles-based CIM has orchestrated high-profile conversion projects, such as the residential redo of Chicago’s Tribune Tower, as well as new skyscrapers like a 58-story skyscraper in Austin called the Independent.

Kuba remembers Tony Ressler’s pitch for Centennial Yards, which he described as a “10 out of 10″ for complexity. The project couldn’t be developed one building at a time or in isolation, he said.

“Every time you build a building, you create a new energy. You create a new community,” Kuba said. “The idea that you have site control and you can actually continuously deliver product to the market over the period of time, you basically create the entire story.”

First unveiled in 2018, Centennial Yards was envisioned with more office space, potentially even trying to woo Amazon’s second headquarters, known as HQ2. (That project ultimately landed in northern Virginia.)

The office component has become less pronounced, especially after COVID-19 stopped most companies from thinking about office expansion.

“Prior to COVID, every other day we were meeting with a Fortune 100 company wanting to build a second campus,” said Steve Koonin, CEO of the Hawks and a Centennial Yards investor. “We had tenants who were ready to go, but with COVID — screeching halt.”

McGowan insists new offices will still have a place within Centennial Yards, saying a 520,000-square-foot office building rising 26 stories is fully designed. A tenant just needs to emerge.

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

But the pandemic may have been a blessing in disguise for Centennial Yards’ long-term vibrancy, he said. It made the entertainment district and residential elements the project’s top priority.

When office prospects come back, McGowan said, “there’s something to show them, and there’s places to live.”

‘Pinch me, it’s real’

Every time the Hawks play at State Farm Arena, Koonin sees progress being made across the street. Now that some buildings are finished, he has to remind himself it’s not a dream.

“We should put, ‘Pinch me, it’s real,’ on the signs,” he said while admiring Hotel Phoenix. “That would be hilarious to anybody over 50 who grew up here.”

The hotel opened in early December, a few months after its neighboring apartment tower, the Mitchell, accepted its first residents. The towers, both 19 stories, are the first new construction completed within the Gulch, acting as a proof of concept before the entertainment district comes into form next year.

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

McGowan said the residential components are vital to watch since downtown isn’t seen as a part of Atlanta most people want to live.

“That was always the nail-biter. Will people live here (in downtown)?” McGowan asked. “The answer is yes.”

It took only 45 days for The Lofts at Centennial Yards South, a converted historic Southern Railway freight depot and office building, to fully lease its 162 units. McGowan added that the Mitchell’s leasing is going well.

Kessler, the Center for Civic Innovation director, has lived in a South Downtown condo for nearly 20 years and said the area’s residents are clamoring for more neighbors. The more people living downtown, the more support there will be for neighborhood retail and services such as grocery stores and pharmacies.

Centennial Yards aims to have more than 1,000 apartments either complete or under construction by the end of next year. The entire district will likely double that number, McGowan said.

Future affordable units are planned, a requirement of CIM’s incentive deal. CIM paid $28 million into the city’s affordable housing trust fund years ago, and a nearly $8.5 million fee to opt out of the requirement in the Mitchell.

Residential is also part of the plan for South Downtown, an area Birdsong and Cummings are injecting with local restaurants and incubator spaces for startups. And the city is backing several affordable housing projects downtown, including the 2 Peachtree tower conversion led by Perry’s development group.

“Hopefully, with what’s either currently built or on the drawing board, we’ll get toward the point where downtown can once again be the total neighborhood it historically has been,” Kessler said.

While activity is happening downtown, especially trying to get ready for Atlanta’s role hosting World Cup matches, a lot of those efforts remain in planning stages. Centennial Yards has construction momentum, which its neighbors are all watching.

“Every time they make an announcement, it just inspires us and encourages us and gives us even more motivation,” Birdsong said.

McGowan said the project’s ambition is to help redefine the city.

“There will be three big projects that will be written about as transforming the trajectory of the city,” he said. “It’s the airport, the Beltline and Centennial Yards.”