The foreclosure of several downtown Atlanta buildings and parking lots was postponed Tuesday, leaving the fate of one of the city’s largest redevelopment projects in limbo for a little longer.
Eighteen properties within German developer Newport’s South Downtown project were slated for public auction after a deal to sell the entire project portfolio to a Decatur developer fell through last month. Newport defaulted on its $75 million loan with Miami-based lender BridgeInvest, which prompted 18 properties — including 222 Mitchell Street and buildings within downtown’s historic Hotel Row — to be advertised for foreclosure on the Fulton County Courthouse steps.
Jay Latzak Jr., an attorney with Bryan Cave Leighton Paisner LLP who represents BridgeInvest, told The Atlanta Journal-Constitution that Tuesday’s foreclosure was postponed. He said the properties will likely be sold at public auction in January, but he declined to comment on what prompted the delay.
Newport Senior Vice President April Stammel was among a group of company executives and downtown residents standing outside the courthouse Tuesday morning, waiting for the foreclosure to take place. Newport did not immediately respond to a request for comment after the postponement was confirmed. Stammel had told the AJC on Monday that the developer was not trying to avert foreclosure at this point.
“We hate that we were not successful,” she said, “but I certainly feel like we made some great groundwork.”
The German developer surprised Atlanta’s real estate world in 2016 when it began buying dozens of empty and boarded-up buildings south of Marietta Street. It amassed a portfolio of more than 50 properties across 10 blocks near the Five Points MARTA Station, which were dubbed South Downtown — stylized as South Dwntn.
In July, Newport announced it had agreed to sell all of its Atlanta real estate holdings to Braden Fellman Group, a firm best-known for residential adaptive reuse projects. The deal was seen as a best-case scenario because it kept the entire project portfolio under a single owner and would have continued Newport’s vision of reviving the historic buildings with new restaurants, shops, offices and residences.
However, the deal was terminated by the buyer in October. Andrew Braden, principal of Braden Fellman, declined to comment.
Newport CEO Olaf Kunkat told the AJC in August that global factors, including the pandemic, war in Ukraine and interest-rate hikes led Newport and its investors to “reprioritize capital investments.” South Downtown was Newport’s only U.S. project, and the foreclosure has prompted the firm’s U.S. operations to begin winding down.
The former C&S Bank headquarters building at 222 Mitchell Street was still undergoing restoration when Newport paused the project, leaving it incomplete. The massive building takes up an entire city block and was last slated to be transformed into housing.
Credit: Katelyn Myrick
Credit: Katelyn Myrick
Charlie Stanford, managing director of Henry Lorber and Associates, said an incomplete building of that size is a burden to maintain, since it has to be insulated from the elements and kept secure.
“The worst thing you can do in real estate is have a partially completed building,” he said.
The potential return of so many properties to their lender and an uncertain future for the other Newport holdings raises questions about what comes next. Prior to Newport’s buying spree, the properties it bought were controlled by dozens of owners, many lacking the funds to revitalize them.
Brandon Campbell-Kearns, who lives in downtown’s Fairlie-Poplar neighborhood just north of South Downtown, said he hopes the historic buildings are not abandoned or demolished through any impending ownership changes.
“I just hope that the buildings stay as they are,” he said. “It’s a really nice street you can walk and see the tapestry of things evolving.”
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
In the years before the COVID-19 pandemic, downtown saw a wave of new investment. Newport gobbled up much of South Downtown, new plans for Underground Atlanta got under way and developer CIM Group launched Centennial Yards, a $5 billion mini-city in the tangle of parking lots and rail lines known as the Gulch.
Campbell-Kearns said there’s a lot of doubt about downtown’s future, but he said Newport’s inability to bring its South Downtown vision to fruition should not be used to discredit the neighborhood’s vibrancy and potential.
“I think a lot of people will use it as evidence of their already derived thesis that downtown itself is dead or not a place to live,” he said. “But I think it’s proven that you can.”
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