Summerhill

Atlanta Building on Market for 3 Years (2 OCT 06)

Nov 28, 2006

By D.L. Bennett, The Atlanta Journal-Constitution
Oct. 2--The building offers 11,000 square feet of bright colors and modern design, with exposed metal and wood details and a spacious, open floor plan.

It sits on a prominent street, just minutes from I-20 in bustling downtown Atlanta.

Still, nobody wants Fanplex.

The controversial former children's entertainment complex has been for sale for about three years -- about twice as long as it was open for business. Interest has been so limited that the Atlanta-Fulton County Recreation Authority has taken the building off the market.

Day after day it just sits there like a testament to poor governmental decision-making.

Why?

Commissioner Tom Lowe, an authority member and real estate speculator, said the authority should have unloaded it long ago. However, the majority of the authority board wants to hold on to Fanplex until they get an offer that approximates the $2.5 million they paid for it.

"We've just got more in it than we can possibly get out of it," said Lowe, who said the building is overpriced. "And, we won't sell it at a loss."

The facility's been through two listing agents, Bull Realty and HN Commercial. Both listings expired without a deal. The first time, the authority didn't list a price and just solicited offers. HN Commercial took a different approach with a $2.7 million price tag.

But, the authority's never gotten an offer approaching that number.

Jim Summerour, the last listing agent, described the building as "a very specialized property. The uniqueness limits your uses." He said it could be sold fairly quickly for about $1 million less than the asking price.

"The market is pretty good at determining what something is worth," Summerour said. "There have been a number of offers all within about $150,000 of each other. As it is now, it's a difficult economic unit."

The impasse between the authority and potential buyers means the building continues to sit vacant -- a sore point for nearby residents.

"We are very upset about Fanplex," said Kenyatta Mitchell, a Summerhill resident. "It should have been sold years ago. It's an eyesore. It's become another parking lot. They told us years ago they wouldn't build another parking lot."

David Hammond, a commercial real estate broker who lives in Summerhill, said nearby residents continue to wonder what will happen to Fanplex after so many years sitting vacant.

"That's the most discouraging thing," Hammond. "That area won't support a commercial venture."

Fanplex opened in July 2002 after more than a year of controversy. Critics questioned the $2.5 million price tag and the need for a government-built entertainment complex. The expected audience never showed up. Fanplex bled money from Day 1. The authority quickly cut hours, shed employees and cast about for other uses. It lasted less than 18 months.

The authority put it up for sale in late 2003. Now, the building has been for sale for so long that Atlanta leaders hope it may soon be swept up in the redevelopment boom Atlanta's experienced during the past decade.

One plan being floated would create a tax-incentive development district out of the parking lots around Turner Field. Nearly 50 acres of ground level parking could be replaced by high-rise condominiums, offices and retail shops. Massive parking decks -- the current theory is about $160 million worth -- also would be needed for stadium traffic.

If it happens, Fanplex could be demolished as part of a redevelopment plan or somehow worked into whatever comes next. At this point no one knows.

Greg Giornelli, who heads the Atlanta Development Authority, said his staff is working on a tax allocation around Turner Field but isn't sure when a proposal will be ready.

To make the tax district work Atlanta officials need to get Fulton County and the city school board to agree to create it.

Still, stranger things have happened.

For most of the past 15 years people complained that Atlanta's purchase of the old Sears warehouse on Ponce de Leon was a boondoggle. However, the real estate eventually became valuable enough that Atlanta sold it to a developer who's building lofts, condominiums, stores and offices in the 2-million-square-foot building.

However, even there, the city netted a $4 million loss.

Mitchell expects Fanplex only has one possible future -- a wrecking ball. She said nearby residents are hopeful for the sea of parking lots in the neighborhood to be developed and eager for Fanplex to be included.

"The parking is horrible," she said. "I'd rather have some sort of buildings, maybe some parkland."

Source: http://www.multifamilyexecutive.com/industry-news.asp?sectionID=565&articleID=373813