ATLANTA BUSINESS CHRONICLE TWO ARTICLES ON THE NEW PROPOSED

REDEVELOPMENT

OF

UNDERGROUND ATLANTA

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i-Fliom the Atlanta Business Chronicle:l1ttp://www.bizjournals.com/atlanta/news/2014/12/17/underground-atlantas-

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JndergrOund Atlanta's sale to WRS Inc. is'a big day for our city,' officials sayDec 17, 2014, 2:54pm EST Updated: Dec 17, 2014, 3:32pm EST

~ria SaportaContributing Writer- Atlanta Business ChronicleEmail

"Today marks another milestone" for Atlanta, Mayor Kasim Reed said Wednesday as heannounced that the city had entered into an agreement to sell Underground Atlanta to WRSInc., a real estate investment company based in South Carolina.

WRS will pay the city $25.75 million for 12 acres of downtown real estate, which the city willuse to payoff the remaining debt on the property.

It also will cover the costs of buying out the 70-year sublease that existed on the property - adeal the city completed in March. That gave the city the flexibility to put the UndergroundAtlanta property out for bid as part of the mayor's strategy to rid the city of unneeded reales ate. The mayor said the sale will save the city about $8 million a year .

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I. Underground Atlanta to be sold for $25.75M to South carolina's WRS Inc.

But Reed said the Underground sale was much more significant than just a land transaction.

"It is also a great deal for the community surrounding Underground Atlanta," Reed said. "It willbe a catalyst for the revitalization of this corridor."

The new development will be "a place where people can live and shop everyday instead of aplace where they will visit once in awhile," Reed added.

The mayor gave much of the credit for the deal to A.J. Robinson, president of Central Atlantaprgress who has been touting the benefits of downtown for decades.

"This is a big day for the city," Robinson said. ''This is a bright new horizon our city."

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With a substantial investment in Underground, Robinson said that now "we have a greatopportunity" that the state, MARTA and other entities also will invest in properties thatsurround Underground Atlanta

T. Scott Smith, president and CEO of WRS Inc., said he was intrigued by the built in marketthat already exists for Underground. The company is still undergoing market studies todetermine how much residential the property can handle, but he plans to take advantage of thetrends of people moving back to the center city and wanting to live close to transit and beingpart of a walkable community.

"We don't believe there's a better location," Smith said. ''You can go in every major city. Peoplewant to be back downtown."

Smith added that they would like to start construction in mid-2016 and complete thedevelopment in three to five years.

WRS is primarily a retail developer - developing 30 retail anchored shopping centers with morethan seven million square feet of space since 2001. Smith said that he already is talking tomulti-family developers about building the residential towers on the property.

The plan is for WRS to leave the historic Underground part of the development pretty much asit is today but to bring in new retail and restaurants - especially to fill up the vacant spaces.The upper level - what is at the street - is what will be redeveloped with high densityresidential on the upper floors with retail at street level.

Maria Saporta covers non-profits and philanthropy

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Scott Smith's big plan for Underground - Atlanta Business Chronicle http://www.bizjournals.com/atlanta/print -editionl20 lS/02/06/scott-smit...

From the Atlanta Business Chronicle:http://www.bizjournals.com/atlantaLprint-edition/2015L02I06Lscott-smith-s-big-plan-for-underground.html

Scott Smith's big plan for UndergroundSUBSCRIBER CONTENT: Feb 6, 2015, 6:00am EST

Maria Saporta and Amy WenkAtlanta Business Chronicle

The prospective buyer of Underground Atlanta envisions developing about 1,000 newresidential units as part of his firm's redevelopment plans - including a new high-riseresidential tower on Peachtree Street.

T. Scott Smith, CEO of WRS Inc., which has a contract to buy the 12 acres from the city ofAtlanta for $25.75 million, has submitted the preliminary site plan of the project to the city.Smith said when completed, WRS and its development partners will invest between $150million to $200 million to redevelop Underground.

Even though Smith said it is still early, the site plan provides an indication of how WRS and itsfuture partners intend to redevelop the site.

T e tower on Peachtree and Wall streets could be "a student or multi-family high rise with retailon the bottom," said Smith, whose expertise historically has been in retail developments.

"It's going to be up to other developers to do the residential," Smith said in a telephoneconversation with Atlanta Business Chronicle on Feb. 3 when he provided a detailed analysis ofthe site plan and the current status of the project. "We have not picked anyone. We have beenin communications with several, and the interest looks very good."

When asked how tall the high-rise would be, Smith said that WRS is conducting engineeringstudies to determine "what size load" the development pads on the site can support.

The property is complex because Smith will primarily be developing new buildings aboveground without disturbing the historic integrity of Underground. But the above-ground portionof the property really is like a second floor of the city. (Underground was formed in the late1800s when Atlanta built raised streets to cross over the traffic-stopping train tracks at thecenter of the city.)

One of the most-highly talked about amenities of the Underground redevelopment will beSmith's commitment to put a major grocery store along Upper Alabama Street between CentralAvenue and almost to Pryor Street.

Smith said the plan is to have a grocery store of about 65,000 square feet (that could varybetween 50,000 and 70,000 once he finishes negotiating the deal) at street level, and then put

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-a I' ulti-family development above.

"We will not have a discount store there," Smith reiterated, even though he stopped short ofidentifying which grocer he has been talking to.

Luring a grocery store downtown could be challenging. But if a deal gets done, it could be adtalyst both for the overall redevelopment of Underground and spark revitalization around theFi:\lePoints MARTA station, said John Bemis, Atlanta retail market leader for real estate servicesgiant Jones Lang LaSalle Inc.

"A grocery store could be one factor in driving permanent residents to the downtown area andwtould have a very positive impact on downtown in the long run," Bemis said.

Typically, retail development follows rooftops, or dense areas of population. But with thisproject, the grocery store could be built first or simultaneously with some residential units.Ultimately, the amenity may spark more interest from residential developers.

The grocer "could be an enticement for a residential developer and could lead to higher rentalrates," Bemis said.

Publix Super Markets Inc. appears to be a front-runner to lease the space, although Scottsaid it was too early to name potential tenants and that there has yet to be a lease signed or aletter of intent.

Smith said he may be interested in luring back former Underground restaurants, such asDante's Down the Hatch, once an Atlanta institution known for its fondue and crocodiles.

"I'd be glad to talk to him," said former owner Dante Stephensen, who first opened Down theHatch at Underground in 1970. He later opened a second location in Buckhead that closed inthe summer of 2013. "I'm interested in downtown becoming a healthy place again."

S~ phenson said his former restaurant at Underground is mostly intact and it could bereidpened, but how easy that would be "remains to be seen," he said.

A third residential tower, at the corner of Pryor and Upper Alabama, currently is slated to be ahotel - but Smith said that also could change depending on market studies and demand.

"I'm 100 percent sure we will be putting livable spaces there. We will be catering to multi-farmily and students."

Smith said the plan is for the 1,000 residential units to be apartments, but that a developmentpartner would have final say.

The site plan also calls for a new "parking bridge" to be built over the MARTA tracks to connectthe grocery store with an existing parking lot that Smith does not own. The site plan doesidi,ntify that parking lot as "potential future development."

When asked whether WRS had interest in that property, Smith said his goal was to make surethere is as much residential density in the area as possible.

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Scott Smith's big plan for Underground - Atlanta Business Chronicle http://www.bizjournals.comlatlantalprint-editionl2015/02/06/scott-smit ...

-"~e want to build a community down there," he said.

In the meantime, Smith said that there is not another full grocery store within 1.5 miles of thatlocation, and some people will be wanting to drive there. "We need to make parking convenient- a walk over the bridge," he said.

To make that connection, WRS will have to build over the existing MARTA tracks. It also istalking to the state about shoppers being able to park in that lot. It is the only undevelopedpiece of property that separates Underqround from Georgia State University.

Srith insisted that the preliminary site plan is still a work in progress.

''There are a zillion different components going on," said Smith, adding that the concept planwas one of the initial milestones required as part of the city's contract. Smith said he expects toclose the deal by late summer and for construction to start by the second quarter of 2016.

Since announcing his intention to buy Underground on Dec. 17, Smith says he hasn't had anysecond thoughts about taking on such an ambitious project in the heart of Atlanta.

"Nope," Smith responded without hesitation. ''This is a project that WRS is really lookingforward to completing."

Smith said WRS has developed larger retail projects - some as large as a half million squarefeet. Underground's total retail will be about 250,000 to 260,000. It also is not the mostexpensive deal WRS has ever developed with other partners.

Bu Smith acknowledged that Underground is the "highest-profile piece of property we've everdone."

For Smith, there is no turning back.

"I guess a lot of people think I'm a little naive," said Smith, who has a hard time containing hisenthusiasm about the future of the heart of Atlanta at its zero mile marker. ''This is the mostexCi:itingpiece of property we will have ever developed."

Preliminary Plan for Underground Atlanta

• Developer: WRS Inc.• Total Investment: $150 million to $200 million• Residential: About 1,000 units• Retail: 250,000 to 260,000 square feet• AntiCipated start date: Second-quarter 2016

Maria Saporta covers non-profits and philanthropy

Amy Wenk covers hospitality, retail and restaurants.

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