ATLANTA — A Mount Pleasant, S.C.-based real estate investment firm has purchased the iconic Underground Atlanta shopping district for $25.8 million. The 12-acre, multi-tiered, subterranean shopping and entertainment district is located in the Five Points neighborhood of downtown Atlanta.
WRS Inc. will purchase Underground Atlanta from the city and the Downtown Development Authority. Atlanta Mayor Kasim Reed made the announcement at a news conference on Wednesday morning.
Tentative plans for redevelopment include mixed-use retail and housing. The transaction will result in $8 million annual cost savings for the city, according to a news release from the city.
“The sale of Underground Atlanta is another milestone in the revitalization of our downtown corridor,” says Mayor Reed. “WRS brings a high level of expertise and strong track record of successful developments to an area of the city in need of a fresh approach. Based on the city’s track record with Ponce City Market, the Lakewood Fairgrounds (now EUE Screen Gems) and Buckhead Atlanta, I am confident that we will succeed in transforming Underground Atlanta into a vibrant component of our city’s commercial business district.”
Atlanta’s hospitality and tourism industry generates $11 billion annually. A revitalized Underground Atlanta will complement several new downtown attractions, including the National Center for Civil and Human Rights, the College Football Hall of Fame and the new Falcons Stadium, which will open in 2017.
The Downtown Development Authority (DDA) was created in 1982 by state law to revitalize and redevelop Atlanta’s central business district. The city and DDA have jointly owned Underground Atlanta since August 1986.
In March 2014, the city purchased a long-term sublease to make the property available for revitalization and redevelopment. WRS was selected through the DDA’s procurement process.
“WRS is committed to leveraging Underground Atlanta as a catalyst for long-term economic and social sustainability in downtown Atlanta,” says Scott Smith, president and CEO of WRS. “Development plans for the site will create a community rather than a destination, making Underground Atlanta a place where people can live and shop every day.”
Details of the transaction will be presented to the Atlanta City Council and the DDA board for approval next month. However, according to media reports, WRS plans to invest $150 million to $200 million in the site to convert the landmark into a mixed-used project. Construction is set to begin by 2016 at the latest, according to various media reports.
The buildings comprising Underground Atlanta were constructed during the city’s post-Civil War Reconstruction era.
Underground Atlanta opened in 1969 and was known for its nightlife scene through much of the 1970s. However, Underground Atlanta sat mostly dormant in the 1980s. Vagrants occupied several of the historical buildings, some of which were destroyed by fire.
Underground Atlanta has gone through multiple restorations, and has struggled to attract tourists to the area. However, the new owner plans to revitalize the area and improve the district’s reputation with locals and its visitors.
WRS provides real estate investment services, including development of retail, office, hospitality and industrial projects, real estate property management and real estate brokerage services. The company has developed more than 30 retail anchored shopping centers with over seven million square feet of retail space since 2001.
— Danielle Everson