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Atlanta's Redevelopment Specialists Grapple With Gentrification Pushback

Over the past decade, developers have been transforming underused commercial buildings into trendy new office and shopping destinations as people return to live and work within Atlanta's urban core. With each dusty building that gets refurbished, rents and property values rise, raising concerns among longtime residents about the effects of gentrification in areas like the Old Fourth Ward and Westside Atlanta.

But developers at a Bisnow adaptive reuse event Tuesday pushed back on the claims that their projects are accelerating displacement, saying some of the outcries against the redevelopment are premature and that they are doing all they can to help existing residents benefit from Atlanta's rising economic fortunes.

Ponce City Market, in the Old Fourth Ward neighborhood in Midtown Atlanta, one of the major catalysts to the region's adaptive reuse movement..

Jamestown's redevelopment of a former Sears warehouse along Ponce de Leon Avenue into the iconic Ponce City Market is one of the most prominent examples of a neighborhood-changing adaptive reuse project. The developer is now looking to build 160 apartments on top of PCM's parking deck, 16 of which would be set aside as affordable housing.

“You can't whitewash the fact that we're changing the demographics of a neighborhood,” Jamestown President Michael Phillips said at the event. "But the other side of that is we all have to be creative in creating opportunities and economic impact for all people."

Newport RE has purchased a collection of historic commercial buildings along Mitchell and Broad streets just south of the Georgia State Capitol building, with plans to refurbish them into retail and office spaces. Newport Senior Vice President April Stammel said her firm began receiving phone calls from local media about potential gentrification well before it began any work revitalizing its properties. 

“Our statement was everything was boarded up and empty. The story is about the opportunity. We're bringing life back to these buildings,” Stammel said Tuesday. “Why are they attacking us already when we haven't even started working on the work?”

Gentrification in Metro Atlanta has impacted many neighborhoods already. Housing costs are rising at record rates, exacerbating an issue that has been burbling for years. This year alone, the average one-bedroom rent in Atlanta jumped nearly 15% to $1,700 per month and the average two-bedroom unit saw rents rise 15.1% to $2,140 per month, according to Zumper.

According to a 2017 study by the Urban Displacement Project, 80,000 low-income households in Atlanta lived in neighborhoods where they were at risk of being displaced by rising rents and land values.

In response, Atlanta has been attempting to encourage a new supply of affordable housing, especially along the Atlanta BeltLine, which abuts PCM. Under former Atlanta Mayor Keisha Lance Bottoms, who didn't seek re-election, Atlanta launched a program that will look to turn 877 acres along the BeltLine into housing projects that involve affordable units.

“In terms of gentrification, yeah, it's a real problem,” said Gene Kansas, who heads his namesake real estate firm that focuses on historic preservation in Atlanta.

Smallwood President Chuck Hull, Lucror Resources Managing Principal Arun Anijhawan, Jamestown President Michael Phillips, Newport RE Senior Vice President April Stammel, Gene Kansas Commercial Real Estate founder Gene Kansas and Kairos Development Director of Operations Art Rountree discuss adaptive reuse at the February Bisnow event.

There has been backlash growing in recent years from legacy residents in various Atlanta neighborhoods. Residents of the historically Black neighborhood of Pittsburg, just south of Downtown Atlanta between the West End and Summerhill neighborhoods, protested when a developer last year purchased a house in the area for $700K. The move, residents at the time said, threatened to push housing values up for everyone.

And legacy residents in the Old Fourth Ward — the nexus of Atlanta's new urbanism and redevelopment where Ponce City Market is located — have long complained that rising property values are forcing them out of the area.

Kansas said further tax incentives and other programs are going to be needed to offset the impact redevelopment will have on neighborhoods. Those incentives are necessary for developers to be able to offer low-rent housing and business spaces.

“We hear a lot about affordable housing. I think there should be affordable everything. But developers are not going to develop unless they're going to make money,” Kansas said.

Kansas used historic tax credits to help turn the Atlanta Daily World Building in the Sweet Auburn district into apartments and a ground-level coffeehouse and juice bar after the building suffered tornado damage in 2012, forcing the newspaper to relocate elsewhere.

Incentives have been instrumental in Newport's plans for redevelopment in South Downtown. The developer used $8M from the local tax allocation district toward the project, Stammel said.

“We are going to be able to offer affordability in both the residential and commercial portions,” she said. “We can now offer spaces to artists who can't pay market rent, or restaurateurs who can't pay market rents.”

Keona Jones, a resident of the Dixie Hills neighborhood and a member of her local neighborhood association, told Bisnow in an interview after the event that developers need to approach neighborhood residents about development plans and try to conform them to what neighbors envision. 

“They should first get the pulse of the neighborhood organizations and the grassroots organizations,” Jones said. “The reason is a lot of these communities have their own plans, dreams and wishes. The neighborhoods are interested in long-term partnerships. A marriage, so to speak, not just a one and done.”

Other developers at the Bisnow event said their projects ultimately benefit communities, despite gentrification concerns.

“Do some people get displaced? Yes,” said Art Rountree, the director of operations for the firm Kairos Development, which has refurbished Jefferson Station, a 1930s former clothing mill in East Point, into an office, medical and retail project called East Point Exchange.

“But in reality, jobs are coming in. Lots of jobs,” Rountree said. “Incomes are going up. That means crime is coming down.”

CORRECTION, FEB. 25 6:00 P.M. ET: A previous version of the story incorrectly reported that Newport RE planned for hotels in South Downtown. A previous version also attributed phone calls to Newport about gentrification coming from area residents. A Newport executive said she was referring to the local media. The story has been updated.