By John Schaffner
Among the most frequently heard questions around Buckhead these days are “Has all the work stopped at The Streets of Buckhead?” and “Is The Streets of Buckhead project in jeopardy of not coming together?”
It is obvious to anyone who drives along Peachtree Road past what once was the decaying Buckhead Village that the five cranes in the sky are not moving to build the promised Rodeo Drive-style retail and restaurant district punctuated with condos, apartments, hotels and office space.
It was widely reported more than a month ago that Ben Carter, the chairman of Ben Carter Properties, the developer of the $1.5 billion project, had decided to slow or stop construction while he renegotiated the labor and materials contracts on the project in line with today’s economy.
According to Carter, that strategy has resulted in about $10 million in concessions from contractors.
Scott Higley, the vice president of marketing for Ben Carter Properties, said: “Nothing has changed with the strategy as it was reported recently. Work slowed — it has never stopped completely — a while back to ensure that BCP was getting the best possible prices, deals and rates prior to moving forward.”
Higley said the original contracts were negotiated in 2006 and 2007 “when the economic picture was rosy and products and services were not as easy to come by. Things have changed substantially since that time. Every single penny spent, literally, matters in this economy.”
He added that work won’t resume until the renegotiated deals are finalized, “which should be very soon, as there is a timeline to adhere to.”
Higley also said: “Work was substantially ahead of schedule prior to that time anyway, so no real time has been lost, especially since the project’s opening was moved to 2010 to better accommodate the timelines of retailers who are committed but hope to open when the economy is on an upswing. It’s certainly one aspect of the economic condition as it relates to our industry that is unusual but not unheard of.”
Carter did say recently he is considering another delay in the opening of the project, possibly until the fall of 2010. But he said a spring 2010 opening is still possible, depending on what retailers want.
Regarding the questions being asked on the street, Higley said, “I think people’s wondering and/or assuming the worst is more a symptom or expectation after there has been so much bad news recently in the media.”
Pointing to some good news, Higley said the project recently received “no fewer than four letters of intent from some exciting retailers. There’s some good news.” He said he cannot reveal the names of those retailers because “we’re pretty adamant about not releasing the names until the retailer approves it and we have a signed lease.”
But Carter has said a jeweler and two luxury women’s apparel stores are among the four.
Two retail leases may be in jeopardy, however.
An agreement with IT Holdings of Milan, Italy, is on hold because the parent company is in Chapter 11 bankruptcy reorganization. IT Holdings had committed two of its luxury brands to the project. The company operates Just Cavalli and Versace Sport, among other brands.
Carter said the company is hopeful it will get through the bankruptcy proceeding.
He also has said the lease for the La Goulue restaurant is not in jeopardy. La Goulue closed its restaurant on Madison Avenue in New York because of the high rent but is looking for new space in that city, Carter said.
Carter, who has described himself as “brave” when looking from his office at the construction site across Peachtree Road, has acknowledged the economy is making lease negotiations more difficult, especially in luxury brands. But he remains optimistic.
He noted the first phase of The Streets of Buckhead is about 50 percent leased.