Ponce Park Featured in Southeast Real Estate Business
The November edition of Southeast Real Estate Business, which covers the latest news, developments and trends in commercial real estate in the Southeast, featured Ponce Park, an Atlanta mixed-use project designed by TSW.
A STEP IN THE RIGHT DIRECTION
Ponce Park will create a pedestrian-friendly
environment in Atlanta’s Midtown.
by Brianne Gloski
Midtown Atlanta will get a new look once the more than $250 million Ponce Park development is completed. Scheduled to break ground this month on the first phase, the 2.45 million-square-foot mixed-use project will bring new life to the largest building in Georgia and create a pedestrian-friendly environment for its new tenants and other Atlanta residents and visitors.
The vision of Emory Morsberger, chief executive officer of Lawrenceville, Georgia-based The Morsberger Group, for the past three and a half years, Ponce Park will feature residential, office, civic, retail and public space in between Ponce de Leon and North avenues.
In March, Ponce Park LLC — consisting of The Morsberger Group, Adams & Co., The Integral Group, The Atlanta Neighborhood Development Partnership and Lane Investment & Development — purchased 6.5 acres south of North Avenue for $6 million.
The development of this land parcel will constitute the $50 million, 450,000-square-foot first phase of the Ponce Park project. Two acres of the land will be set aside for a park, of which Atlanta-based Lane Investment & Development will construct 300 apartment units and 60 condominium units around its border. In addition, Adams & Co. will construct 10,000 square feet of street-level retail space along North Avenue. Completion is scheduled for 2008.
The architect for the Ponce Park project is Surber Barber Choate & Hertlein Architects, and the contractor is yet to be determined, however Gay Construction Co. has been involved in the project so far, according to David Laube, vice president of The Morsberger Group.
Ponce Park’s second phase has proved to be the biggest challenge for the partnership, which was formed almost 2 years ago. The revitalization of the 2 million-square-foot Sears distribution center/City Hall East building on Ponce de Leon Avenue will put The Morsberger Group into territory the company has never entered before, development-wise.
“It’s the same type of project that we usually do, that is turning something not being fully appreciated into an asset for the community,” says Emory Morsberger. “This project is similar to our past projects in that respect, but it’s quite larger than anything we have ever done.” The Morsberger Group is responsible for the revitalization of downtown Lawrenceville.
As the largest building in Georgia, according to Morsberger, the Sears/City Hall East building was the city’s largest asset — and biggest headache.
“The city was basically losing about a million a year just on operating costs,” says Morsberger. “They were only using about 350,000 square feet, and the rest needed to be heated and maintained, but it wasn’t being used.”
Another reason to sell the building was the $6 million in property taxes resting on the property. These taxes could increase to about $10 million by the time the project is finished, says Morsberger.
At first, the City of Atlanta was hesitant to sell the property to the building partnership because of its size and money-earning potential. However, once the city realized how much they were losing by holding onto the building and how much they could possibly gain by selling it, it was easy to dispose of the property and begin the development process. Since the sale, the partnership and the City of Atlanta have worked together in laying the plans to revitalize the 1920s-era building.
“Once they decided to sell the building, things have been moving slow but fairly peacefully,” Morsberger says. “There were a huge amount of details to work through: zoning issues, environmental issues, water-runoff issues, neighborhood issues, etc. But, so far, we’ve worked through them all…and Shirley Franklin’s [mayor of Atlanta] team has been fantastic.”
The Atlanta Police Department, the Atlanta Fire Rescue Department, and the Atlanta Department of Parks, Recreation and Cultural Affairs currently occupy space in the building. The police and fire departments will eventually move into a new Public Safety headquarters downtown once it is completed.
“The city started a 30-month block on their move-out — everything must be done within 30 months,” says Morsberger. “So, the clock is running on their end.”
The $200+ million, more than 2 million-square-foot Phase II, which is estimated to start construction in 2009, will include a variety of uses, including 160,000 square feet of retail and office space, 1.04 million square feet of residential space, 32,000 square feet of public space and a 10,000-square-foot police precinct. The residential component will consist of 424 condominium units and 400 apartment units, with units averaging 1,260 square feet. Ponce Park residents will have a wide variety of unit types to choose from, with unit floorplans ranging from studio flats to three-bedrooms. Completion of the second phase is scheduled for 2012.
Residents of Ponce Park will have access to a full amenities package, including a rooftop pool, a lounge and a fitness center. In addition to the green space located in the development, Ponce Park is located close to a planned 25-acre City of Atlanta park and the planned 22-mile beltline trail system, set to be developed in the next few decades.
While other areas of Atlanta are being saturated with luxury condominium developments, such as Buckhead in North Atlanta, Ponce Park will cater to those that have yet to make their first million, according to Morsberger. “This is not going to be another Buckhead luxury deal. We will have a mix of housing, and at least 20 percent of it will be affordable.”
The units will be a mix of for-sale and for-rent, but the development team will see how the market shapes up in the next 2 years before determining how many of each will be included.
Two non-profits will also make their homes in Ponce Park. The Shepard Center, which treats people with spinal cord injuries and neuromuscular illnesses, and the Jewish Family & Career Services, which assists disabled patients in their daily activities, will provide at least 50 units for disabled and recovering patients.
The so-called third phase of the development, according to Morsberger, includes tearing down the “horrifically gross” parking deck on Glen Iris Drive between Ponce de Leon and North avenues. New structured parking will be added to provide enough spaces for residents and visitors of Ponce Park.
Once completed, Morsberger hopes that Ponce Park will change the dynamic of that section of Atlanta and “create a legacy for members of the team and the city. We want it to be something we can be proud of.” It will be a few years before the success of Ponce Park can be measured. However, Morsberger is optimistic that the development will be a success, not only for the project team, but for the entire city of Atlanta.
We’ve changed it from major loss for the city and the neighbors into a major gain for the community, and hopefully, it will be a very successful financial venture for the building partnership as well.”