By John Schaffner
The major property owners along Peachtree Road—between Georgia 400 and Roxboro Road—control the fate of Phase II of the Buckhead boulevard streetscape project, according to Buckhead Commnity Improvement District (CID) Executive Director Scotty Greene.
Primary among those property owners is Simon Properties, owners of Lenox Square and Phipps Plaza malls.
“Because of the tough transportation funding environment we are in, and because of the complexity and cost of the right-of-way, it is going to come down to partial owner financing through waiving receipt of right-of-way cash” for the project to move forward, Greene explained in an interview with the Buckhead Reporter.
“We have $19 million worth of right-of-way we need to buy,” Greene said. “We are not going to be able to produce that money even with our (CID) match. So, of that $19 million in Phase II, I am going to need owners to collectively waive receiving $6 million.”
The CID is still going to spend $12- $13 million of its funds for right-of-way. There is $10 million for Phase II in mainly federal funds, plus another $2.5 in CID match.
“So we have $12.5 million that we are spending now to acquire right-of-way,” Green explained. “But to finish purchasing that right-of-way, we are going to need owner participation for about 30 percent of the $19 million to make it work.”
It is not that the property owners have to write checks. But they won’t collect the cash payment that they would otherwise be entitled to in a typical Georgia Department of Transportation project.
“Because this is a community business partnership project, we have to have owner commitments for almost 35 percent of the right-of-way,” he stated.
Greene said the CID is getting positive commitments from many of the property owners. “Of the 21 owners in Phase II, we have agreements from over half, and nine of those 12 account for a total of $1 million.”
“The tougher nuts to crack, because they are owned by large, institutional, publicly traded funds, are Simon Properties, Edens & Avant and JP Morgan, which own the Target center, etc.,” said Greene. “They are thinking about and assessing the value-added of the project over the next 20 years and whether or not they can waive large chunks of the right-of-way that we need.”
He said those conversations are all revolving around what Simon Properties is going to do.
“The easements we need out of Phipps and Lenox malls come are in the $7 million neighborhood,” he explained. “Simon is a very positive partner. We have been talking with them for years on this project. We are now down to the financial decisions and we are literally at a point now where Simon’s buy-in to this project is very important because the other owners are sort of waiting to see what they are going to do.”
If Simon and other owners step up, Phase II could get started in February of 2009. The original thought was that this phase of the project would start by July of this year.
Right now, because of the real estate market and the retail market conditions, Greene said his instinct is that people are not as quick to make these decisions as they were two years ago when they started Phase I. “We have a tough federal funding environment. We have some federal and state funds. To access any more federal and state funds for construction, we have to have partial right-of-way financing from owner participation,” he said. “That is where we are.
“We are in really good positive, good faith negotiations with all of our owners,” he added. “I don’t think there is anybody that is voting no yet. But the timing starts to become an issue. I am optimistic,” Greene stated.