CIM Group Plans To Launch First 4 Ground-Up Buildings At Centennial Yards In 2022

CIM Group's $5B plan to build a mini-city in the heart of Downtown Atlanta is taking a huge leap forward this year, with construction expected to start on four new buildings, including 500 new apartments and a hotel.

“There will be a lot of dirt moving this year,” Brian McGowan, the president of CIM's Atlanta redevelopment arm, Centennial Yards Co., said in an interview with Bisnow this week.

McGowan said the developer expects to break ground this year on a 235-unit apartment building behind the existing 99 Ted Turner Drive office building and another 50-unit project across from Elliott Street Deli & Pub in South Downtown near Mercedes-Benz Stadium. 

CIM Group also expects to break ground late this year on a third, 275-unit apartment project and a 290-room hotel, both along Martin Luther King Jr. Drive, McGowan said. 

The first piece of the redevelopment has already opened: The Lofts at Centennial Yards South, one half of the former Norfolk Southern building at 125 Spring St. that CIM turned into a 162-unit apartment complex. Eventually, the entirety of the Gulch, railroad tracks and older commercial buildings are expected to become 12M SF of new office, multifamily, hotel and retail development.

“If you live in Atlanta and you don't notice what's happening in Downtown Atlanta, you're not looking,” McGowan said. "You're actually seeing construction cranes in Downtown. That hasn't happened."

CIM also plans to convert 99 Ted Turner Drive, the second part of the Norfolk Southern offices connected by a skybridge, into a 90K SF creative office building, McGowan said.

“That building is gutted and ready to go, and we're hunting for tenants now,” he said.

While construction isn't imminent, McGowan said CIM Group is in the design process to transform the former Atlanta Journal-Constitution printing press building into a 500K SF Class-A office building. McGowan said that the office project won't likely move forward without an anchor tenant signing a pre-lease deal.

Centennial Yards' vision is ambitious by any measure. CIM Group is partnering with a group led by Atlanta Hawks owner and billionaire financier Tony Ressler — whose brother, Richard Ressler, is a principal at CIM — on the development of 50 acres of what was parking lots and railroad tracks surrounded by such iconic attractions as Centennial Olympic Park, Mercedes-Benz Stadium and State Farm Arena.

But the road to Centennial Yards has been a long and, at times, rocky one.

In 2018, CIM was awarded a contentious $1.9B incentive package — the largest ever approved by the Atlanta city government — despite an outcry from local residents and activists.

CIM initially said that it would need to develop a $500M street grid 40 feet above the Gulch that would be in line with CNN Center before vertical development on the new buildings. CIM rejiggered its master plan in 2020, and some questioned whether it could accomplish the ambitious project, especially in light of the economic upheaval precipitated by the coronavirus pandemic.

CIM was granted tax breaks for 20 years and can use 30 years' worth of future sales tax to offset the costs of the new infrastructure and development. The developer has vowed to build at least 200 workforce housing units and fund millions toward a city-run affordable housing and economic development fund.

Months of legal wrangling with a grassroots organization of area residents and activists who opposed the bonds in the incentive package were finally affirmed by the Georgia Supreme Court in August 2020, paving the way for CIM to begin work, a process that could take up to a decade to fully realize.

Urban Key Capital Partners President Tyrone Rachal said it is not surprising that it has taken this long for CIM to gain momentum on construction work at Centennial Yards. Rachal, who formerly worked at Invest Atlanta and established the agency's new market tax credit program, likened Centennial Yards to what Jacoby Development accomplished with Atlantic Station, a former brownfield site in Midtown that took nearly a decade before its initial mixed-use phase was delivered in 2005.

“With respect to Centennial Yards, you have a very challenging physical infrastructure. That alone is a gargantuan undertaking. And keep in mind you're dealing with a construction industry that is very constrained,” said Rachal, a board member of the Atlanta chapter of the Urban Land Institute. “One thing that gives me comfort is knowing the team. They have a great team there.”

Since the legal victory, CIM has been beefing up its talent roster for the project. Aside from hiring McGowan away from his economic development job as CEO of Greater Seattle Partners, Bisnow reported Tuesday that CIM also hired former Regent Partners Director of Development Services Keith Mack to oversee the construction of the various projects within Centennial Yards.

Over the past year, CIM also hired former Colliers Atlanta office leasing executive Scott DeMyer and Hines' former retail leasing lead Nick Garzia.

McGowan — who spent most of his career in economic development, never having to market a specific project until now — said corporate attitudes toward Downtown Atlanta are changing, a stark difference from the desires he saw when he was leading Invest Atlanta.

“Nobody was interested in anything but Buckhead in 2011,” he said. "If we were talking to a big company looking to come to Atlanta, they would say, 'Just show me what's available in Buckhead.' They didn't even want to see Midtown."

Indeed other projects are sprouting around Centennial Yards. The Georgia World Congress Center has embarked on an expansion that will include a new convention hotel. Hard Rock recently opened its Reverb hotel in Downtown. CP Group recently acquired CNN Center and plans to redevelop the iconic building, although little update has been provided since the deal went through.

Last week, Newport Real Estate secured a $75M construction loan to begin redevelopment work on 222 Mitchell, a historic former bank building that is slated to become a 330K SF mixed-use complex with office and retail space.

“There's the beginnings of a resurgence in Downtown Atlanta," McGowan said. "It's happening right now."