Dozens of historic buildings and vacant parking lots near the Five Point MARTA Station are in limbo, awaiting a new owner after an audacious development project fell apart this year.
Since mid-October, German developer Newport’s entire 50-plus property portfolio was advertised for foreclosure. The developer, which envisioned transforming the area known as South Downtown into a revitalized mixed-use district, defaulted on five loans earlier this year, totaling about $97 million.
But each public auction was postponed by its respective lender, delaying any next steps for the 10-block area south of Marietta Street. Attorneys for the various lenders confirmed to The Atlanta Journal-Constitution that the foreclosures have not been averted, but instead will be scheduled to take place early next year.
The largest loan, a $75 million note from Miami-based BridgeInvest, backs 18 properties within South Downtown, including the massive 222 Mitchell Street building and several structures withing downtown’s historic Hotel Row.
Newport had finished restoration work on the Hotel Row block, transforming it into a series of restaurants and creative office spaces. But work on the 222 Mitchell building — the former C&S bank headquarters — was halted earlier this year and remains incomplete.
Credit: Steve Schaefer
Credit: Steve Schaefer
Those 18 properties were advertised for public auction Nov. 7, which was delayed, in part, due to a pending lawsuit over more than $7 million in unpaid invoices to a contractor for work on 222 Mitchell. A permanent injunction hearing is scheduled for Jan. 10 in Gwinnett County Superior Court.
Jay Latzak, an attorney representing BridgeInvest, said they plan to pursue foreclosure auctions Jan. 2, but he did not comment on how the pending lawsuit could impact that timeline.
The rest of Newport’s portfolio was advertised for public auction on Dec. 5, but none of the properties changed hands or was returned to its lender. The dozens of properties were backed by a $10.6 million loan from TRE ATL III; two loans by Salzufer Holding Inc. totaling $8.2 million; and a $3.2 million loan from LL Mitchel, LLC., according to Fulton County records. No reason was given for the postponed public auctions.
Newport came to Atlanta in 2016 and amassed its South Downtown portfolio, which stretched 10 blocks. In July, the firm took the city’s real estate world by surprise and announced it intended to sell the entire portfolio to Atlanta-based Braden Fellman Group. However, that deal fell apart by October, leading to the various foreclosure advertisements.
April Stammel, a Newport executive in Atlanta, previously expressed to the AJC her team’s disappointment that Newport was not able to bring the full project to fruition, but she’s optimistic the vision of a revitalized South Downtown will persevere through its upcoming ownership changes.
“I have no doubt that it is going to find new ownership, continue to be worked on and be a great part of our city,” she said.
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