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Going vertical
Sky-high development soars in Buckhead

Tom Barry, Contributing writer

From the January 20, 2006 print edition

Cousins Properties Inc. has ambitious plans for Terminus, its new development at Peachtree and Piedmont roads that bears Atlanta's original name. Rising on the Buckhead site is a 33-story, 582,000-square-foot office tower, plus 70,000 square feet of retail space and parking, a $150 million project. That's just for starters.

"We plan a second office building of approximately 500,000 square feet when the market allows," said Tad Leithead, senior vice president for development. "The master plan also includes two 40-story condominium towers of about 350 units each and a smaller tower of 150 units. By the end of the day, Cousins' investment in Terminus could easily be a half a billion dollars or more."

The future of Buckhead development is up in the air. Literally. Office and condo towers are sprouting up at the fastest pace Buckhead Coalition President Sam Massell can recall.

Lately, the future's been arriving at warp speed, given the bevy of towers in the works, including several mixed-use projects, an emerging trend expected to escalate. Hot high-rise areas include near Phipps Plaza, the Peachtree-Piedmont intersection and the Buckhead Village.

By Buckhead City Councilman Howard Shook's reckoning, 19 residential towers of 15 stories or more will be somewhere in the development process by mid-February. That's not even counting office and hotel projects.

If history is any guide, the development surge will stir red-hot concerns over increased traffic in an already traffic-thick part of the city.
"Traffic will indeed be uppermost in the collective mind of the neighborhoods when they assess these new developments," Shook said. "Trying to maximize traffic flow, giving people transportation options and keeping cars from using neighborhood streets are our biggest challenges, no question about that."

Nothing will reach for the sky more than Regent Partners' 48-story tower, to be Buckhead's first mixed-use high-rise as well as its tallest building. Call Regent bullish on Buckhead.

Prototype for growth

"The current pace of development in Buckhead is indicative of the relative strength of the market compared to other submarkets in the metro area," said David Tennery, office and development principal for Regent. "Historically, the Buckhead submarket has been the last one to soften [in a recession] and the first to recover. Buckhead also has long led Atlanta in office rental rates, absorption and home pricing."

Tennery sees the mixed-use high-rise as a prototype for future Buckhead growth, even though it's met with mixed success in various U.S. cities. "We went ahead after doing a year of solid research on projects in other cities -- what made them work or fail," he said.

Critical to success is the ability to segregate the tower's office workers from residents, Tennery said.

Asked about the potential for overdevelopment in Buckhead -- the inevitable fear in any building boom -- Tennery said lenders today are more skeptical than they were in the past.

"While there's a tremendous amount of capital in the market, it's considerably more restrictive in nature and more responsible than perhaps was the case historically," he said. "That will restrict overdevelopment, particularly regarding questionable secondary sites, such as a [proposed] office project on what's more of a residential site, or vice versa."

Leithead expects to see many more mixed-use high-rises go up in Buckhead in coming years, as available land becomes scarcer and more expensive.

"The proliferation of mixed-use development is the only way for Buckhead to recognize its true potential and become much more urbanized and pedestrian-friendly," he said. "I also expect to see infrastructure development to support a range of transportation alternatives to the single-occupancy vehicle."

Going vertical means that developers will be challenged to create pedestrian-friendly environments at the ground level, including attractive landscaped areas, Leithead said.

"To get that open space, you have to build taller, skinnier buildings," he said. "Instead of putting up maybe a 10-story building with 30 units per floor, you build a 30-story building with 10 units per floor and use that extra space at the ground level to support pedestrian activity."
Terminus -- to become home to Cousins Properties in April 2007 -- is a prime example. The 9.9-acre tract cost $28 million, or nearly $3 million an acre, he said.

"Buckhead land is very precious, very valuable," said Leithead, who calls the corner of Piedmont and Peachtree "the best location for mixed-use development in the city and probably the Southeast."

Leithead said nearly two-fifths of the site will be set aside for landscaped and hardscaped areas that "will be pleasing and welcoming to pedestrians."
Long term, Leithead sees high-rise development clustering in designated areas served by transit. But he believes Buckhead will develop in a manner unlike New York -- with its canyons of towers -- or Chicago.

"Buckhead has far more developmental land to work with than those cities, and by a wide margin," he said. "I want to be clear here. The increased height of buildings is designed to provide a superior ground-level experience. It's not simply a grab for more density. Coupled with that is the fact that people will have to rely more on alternative methods of transportation."

Options being discussed include a streetcar line along Peachtree Road. Now coming to fruition is the Peachtree Corridor Project, a Buckhead Community Improvement District initiative to improve intersections, streetscapes and vehicle flow along that critical artery, as well as make it more conducive to foot traffic.

Paul Freeman sees Buckhead evolving into a true urban area as it develops, where residents walk to nearby shops and restaurants.
Freeman is managing development partner of Atlanta-based SR Hotel Development, which will own the St. Regis, Atlanta tower. The high-rise's luxury condos will range from 3,200 to 9,300 square feet (averaging 4,500), with private elevator service and access to hotel amenities among the perks.
Targeted buyers include high-end empty nesters who live in large homes in the suburbs but want to move into the city. "I see Buckhead attracting a lot of the empty nesters, while Midtown will attract a lot of the youth," Freeman said. "As Buckhead redevelops, I see it doing so in a much more upscale manner."

Shook, whose city council district includes most of Buckhead's office, hotel and retail areas, says it will be fascinating to see how growth plays out.
"Already a majority of the people in my district live in multifamily buildings," he said. "Yet about 99 percent of the political influence is still vested in the single-family neighbhorhoods. As that 40 percent (single-family residents) goes down to 30 percent and then 20 percent, it will be interesting to see what steps are taken to accommodate the increasingly large majority who live in those vertical communities."

Shook noted that there's a long history of battles between neighborhoods and developers in Buckhead. In the 1980s and early 1990s, he said, developers tried to buy cheaper, more lightly zoned land for projects and then get the sites rezoned for denser development, which led to projects encroaching upon residential areas. The neighborhoods fought back and usually won.

Now developers are buying sites in heavily trafficked corridors such as Peachtree and Piedmont that were zoned for intensive development years ago.

"Developers are biting the bullet, paying market rates and wanting to put in the density that was mapped out years ago," Shook said. "There's anywhere from 6 to 10 million square feet [worth of potential projects] just sitting there [awaiting development on land] that's already been zoned. And there's not a judge in Georgia that will take that away."

Lack of sewer capacity -- a check on Buckhead development in the past -- is no longer an issue, given the city of Atlanta's massive sewer-upgrade program, according to Shook.

Traffic woes

All of which underscores the importance of alternative transportation, with the streetcar line a promising option, said Shook, who added that telecommuting, staggered work hours, and increased mixed-use development also could ease traffic woes.

"Ironically, we're now seeing projects with mixed uses and shared parking, which were concepts the neighborhoods were promoting 15 years ago to a development community and city planning staff that just instinctively didn't want to have that discussion," Shook said.

To reduce commuter trips, developers could be offered incentives to put affordable "work-force housing" in various projects, Shook said.
He said such options are being explored.

"We know we're not going to build any more roads," he said. "Maybe intersections can be improved, with some focused and selective widenings. But Peachtree Road is a spine, and the density is all crammed into the spine. There's no question that the spine is going to go vertical. Plus, we don't have a lot of east-west options in Buckhead.

"So every imaginable [traffic mitigation] step needs to be taken," Shook said. "People are going to have to change their driving habits. This isn't about people turning in their car keys, but maybe every now and then they could take MARTA or walk."

Larry Kelly sees vertical mixed-use "as the next level of evolution in the maturity of Buckhead."

"A mix of housing, retail and office creates a mature urban center," said Kelly, president of Pope and Land Enterprises.
Despite all the growth, Kelly said, Buckhead's primary strength remains its many single-family neighborhoods, which "provide a very, very strong demographic base."

In light of the heavy traffic, Kelly said the major challenge in Buckhead is creating viable access routes to buildings. "Our [two-tower site near Phipps Plaza] enjoys five access points, so traffic can be dispersed on multiple streets, which was a challenge but also an advantage of the site."

The Buckhead Coalition's Massell says high-rise residential development is needed to support Buckhead's many stores, restaurants and art galleries.
"You just have to have that critical mass of population density," he said.

Massell isn't surprised at the high-rise explosion. "About 15 years ago, we commissioned a land-use study on Buckhead," he said. "The recommen dation was for high-rises encircling the community, and that has come about."

Massell said various towers constitute a buffer between residential neighborhoods, which need protection, and low-rise commercial areas. "You won't see [commercial] encroachment into the neighborhoods beyond those high-rise buildings."

Looking to the distant future, Massell -- like Leithead -- doesn't foresee chock-a-block high-rise development in Buckhead.

"It won't be cavern-like, like a central downtown, where the sun can't get to you," he said. "Our buildings will be set back, with some greenery and enough room between them."