Wednesday, March 19, 2014

Reed given green light to pursue Underground Atlanta deal (Update)

Posted By on Wed, Mar 19, 2014 at 5:11 PM

The Atlanta City Council has given the mayor the OK to explore bringing Underground Atlanta back under the city's control - a move that could lead to the possible sale of the 12-acre Downtown entertainment complex.

At Monday's Council meeting, Reed met with councilmembers behind closed doors during executive session about a "real estate" matter. Upon their return, Council swiftly approved a proposal with an 11-0 vote that gives the mayor permission to spend up to $8.8 million to enter a sublease purchase agreement with CV Underground LLC, the holding company owned by real estate executive Dan O'Leary, effectively ending their longstanding 88-year agreement.

As CL reported last week, Reed has been looking into shedding Underground Atlanta from the city's books. It's estimated that the tourist attraction costs the city in the neighborhood of $8 million each year. If O'Leary agrees to such a deal for Underground Atlanta's "remaining rights, title, and interest," City Hall could explore several different options including selling the property to a third-party buyer.

According to Fulton County property records, Underground Atlanta is worth an estimated $4.5 million. Two adjacent city-owned parking decks have a combined value of nearly $21.3 million.

We're reached out to Reed's office for comment. If we hear back, we'll post an update.

UPDATE, Wed., March 19, 5:10 p.m.: Two days later after we first reported on Council's vote, Reed added his remarks about the Downtown retail district.

"The time is right for us to reposition Underground Atlanta and stop the bleeding on our balance sheet," Reed said in a statement. "With this move, we have the ability to market the property and solicit the best, most innovative ideas to transform it into a vibrant component of downtown. Based on the city's track record with Ponce City Market, the Lakewood Fairgrounds (now EUE Screen Gems) and Buckhead Atlanta, I am confident we will succeed with Underground."

NOTE: This story was originally published on Monday, March 17 after Council's meeting.

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