The Valentine’s Day announcement that a Texas developer planned to build more than 2 million square feet of office space in the heart of the Perimeter drew widespread notice.
But developers, office building owners and planners were closely watching insurance giant State Farm’s plans for a corporate campus across from the Dunwoody MARTA station long before Dallas-based developer KDC made the formal announcement.
State Farm, they say, is a “game changer” for the Perimeter.
“State Farm has changed everything – and not just for Dunwoody, but for Perimeter Center,” Dunwoody Economic Development Director Michael Starling said. “[They’ve taken] this big block of space and everybody else is looking and saying, ‘OK, now where are we going to land?’ The ripple effect is all the office projects now are tightening up, if you want big blocks of space.”
KDC announced Feb. 14 that it planned to build 2.2 million square feet of office space, 100,000 square feet of restaurants and shops, and a 200-room hotel on property located on Hammond Drive across from the Dunwoody MARTA station. State Farm will lease 585,000 square feet of the office space, and plans to add additional buildings over the next decade, KDC said in its press release. Construction will begin next summer, the developer said. The Atlanta Business Chronicle called the project one of the largest corporate office developments in metro Atlanta history.
State Farm plans to create a new national operations center on the property. The company plans to hire up to 3,000 more workers to add to the 5,000 it already employs in the metro Atlanta area, KDC said.
“We are working to create a ‘workplace of the future,’ including a live/work/play environment – with housing, public transportation, shopping and entertainment all within easy access,” State Farm spokesman Justin Tomczak said.
“We envision buildings and offices that foster a creative and collaborative environment – open spaces and meeting areas, a bright and new look and feel, comfortable gathering areas, and easily accessible amenities.”
The scale of the development – combined with other projects such as plans to relocate the Atlanta Braves baseball team to a new stadium in Cobb County – show a renewed interest in developing large projects along the “top end” of I-285, economic development officials say. In the Perimeter area, developers are dusting off plans that had been shelved for properties zoned in the past to allow construction of millions of square feet of new office space, hotels, shops and restaurants, government officials said.
“What was happening before the recession just sort of sped up [recently] because we took so long a break,” Starling said. “I think you’ll see a slightly more dense development. You’ll have some very dense nodes in Perimeter, on the Dunwoody side and the Sandy Springs side.”
Just a few years ago, at the bottom of the recession, little was happening in the Perimeter office submarket, said John Heagy, senior vice president-marketing for Hines, an international real estate firm developing a high-rise office building in the Sandy Springs portion of the Perimeter. “Today, compared with two years ago, it’s a different world,” Heagy said.
Starling says developers are positioning themselves to be the first to raise new buildings in the area. “I think the next couple of years are going to be interesting,” Starling said. “You can sense it from the activity, the phone calls. Everybody is fighting to be the first out of the ground.”
Sandy Springs Mayor Rusty Paul sees the changes, too. “There’s no question that the Perimeter is rapidly becoming the economic hub of the region and, in many ways, the ‘new downtown’ of the metro area,” he said.
One reason is an effort to attract younger workers. Developers believe younger workers want to live and work near places to shop and dine, and are attracted to areas served by mass transit, such as MARTA. These workers, in their 20s and 30s, often are described as “millennials.”
“We are all focused now on millennials,” Heagy said. “Millennials are very happy to live and work in places where they don’t have to drive a car.”
Business owners in the area welcome the new customers. “I think it’s going to mean more business for us,” said restaurant owner Doug McKendrick. “It’s going to add a lot of young business people to the area.”
Still, some residents worry development will spawn more traffic, already the area’s biggest problem.
“About 80 percent of the people who work here live elsewhere,” Paul said. “The goal is to have more people who work here to also live here. If we reduce the distance people must drive to work, it will have a significant, positive impact on congestion, so we hope the new people coming here to work will also choose to live here as well.”
Doug Dillard, a lawyer representing the John Hancock Life Insurance Co. regarding a planned mixed-use development in the Brookhaven portion of the Perimeter, argues that a mixture of offices, shops and homes in a single development will help avoid traffic problems.
“I think as you look at these suburban areas developing into an urban node, mixed-use is the best way to make them pedestrian-friendly and minimize the cost associated with getting into and out of the project,” Dillard said. “You put food and beverage in close proximity to where people work and live, you’re going to minimize traffic and other impacts.”
Melissa Weinman contributed to this report.