Monday, May 16, 2011

City Hall East deal could be derailed by feds

Posted By on Mon, May 16, 2011 at 5:27 PM

Future of CHE depends on D.C. hearing - JOEFF DAVIS

Since signing a letter of intent with Atlanta-based Jamestown Properties last fall, city officials have been trying to close a deal to unload the landmark City Hall East property on Ponce de Leon Avenue.

There were negotiations over zoning, affordable housing requirements, environmental clean-up and hundreds of other details, big and small, having to do with the proposed redevelopment of the 2 million-square-foot building.

But now I'm told the negotiations between the city and Jamestown are over and both sides are ready to sign on the line that is dotted. And yet, the whole deal could still go kablooey this week if the federal government doesn't approve $15 million in tax credits that the city and the developer have already agreed to.

First off, let me restate an earlier disclaimer that the point man on City Hall East for Mayor Reed's office, David Bennett, is a longtime friend of mine. Bennett has spent more than a year hammering out various aspects of the deal with Jamestown and there have been times when he worried that the transaction would fall through. But tomorrow he and Reed head to Washington for a hearing that he says could be the make-or-break moment for the entire project.

Simply put (because I don't understand all the details myself), Jamestown applied for a number of tax credits relating to various changes that were considered essential to making the City Hall East redevelopment doable. For instance, Jamestown wants to tear down the property's unsightly parking deck along Glen Iris Boulevard and use parts of the massive building to park cars. To do that, it would need to tear out the 130,000-square-foot loading dock that later served as an exhibition hall for such events as the Southeastern Flower Show.

Currently, the loading zone behind CHE is a good 10-15 feet below street grade. Jamestown's original plans were to fill in that sunken area with underground parking, creating a street-level plaza and a grand entrance that would occupy the "U" formed by the back of the main building. I haven't seen these renderings, but while I hope these changes don't diminish the building's historic badass-ness, I can imagine how they would greatly enhance the curb appeal of the property and make it possible to have outside seating for restaurants.

But Bennett says the feds rejected the ambitious and expensive plan, denying tax credits that Jamestown argues would make the project profitable. (Remember that the upfront purchase price of the property is also in the neighborhood of $15 million.)

Tomorrow, Jamestown executives will make a last-ditch appeal before some bureaucrat with the U.S. Parks Department, which administers the tax credit program for historic properties on behalf of the Department of Interior. Mayor Reed is scheduled to deliver the closing arguments.

NOTE: Several minor revisions were made to this post after it first appeared.

And if it doesn't work? As Bennett says, "We'll have to start over."

Let's hope the mayor wears his lucky tie. If ever we needed a closer, this is the time.

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