Portman Holdings is scaling back its redevelopment plans for a stretch of Ponce de Leon Avenue in Virginia-Highland due to changes in the economy that “have simply changed the viability of new projects,” according to a company official.
Mike Greene, senior vice president for Portman, told Rough Draft today the company has decided not to purchase the parcels at 752, 756 and 774 Ponce de Leon Ave., where The Local and Vesta Movement are located.
Portman plans to close by the end of the year on the property owned by Cartel Properties closest to the Atlanta Beltline’s Eastside Trail. They include the former Paris on Ponce building, a Chipotle, and the strip shopping center where MJQ Concourse and The Bookhouse Pub are located. The addresses are 710, 712, 718 and 738 (also known as 736) Ponce de Leon Ave.
“Our plan included three buildings and we have decided not to purchase the property for the one building furthest away from the Beltline,” Greene told Rough Draft.
“The issue is simply the overall economy,” he said. “The economy is very different today than it was when we started the rezoning. High interest rates coupled with already high construction costs, low liquidity in the banking industry, and flattened rent grow, have simply changed the viability of new projects.”
The original plan included hundreds of apartments where The Local and Vesta are located and office towers on the site of Paris on Ponce and the strip shopping center, prime real estate across the street from the Ford Factory Lofts, 725 Ponce office building and Kroger.
Greene said building office towers for the project, known as Ponce & Ponce, is unknown at this time, but plans are to move ahead with apartments. The zoning allows for some non-residential to be converted to residential, he said.
“What I’m trying to convey is really that the our whole world in real estate is kind of up-ended a little bit,” Greene said. “I don’t think anybody will be upset if there’s no office there.”
Greene said he is working to figure out a combination of residential and non-residential for the property known as the West parcel that would please Virginia-Highland residents and the city.
“I would love to do the office. I really would,” Greene said. “But it’s almost impossible right now.”
Portman will probably have to wait several years before construction can begin due to the market, Greene said.
He said he was happy The Local and Vesta would be able to remain open at their homes.
“Those are two great businesses with great owners and we wish them the best for many years to come. We will do everything we can to be great neighbors and drive business to them,” he said.
What will happen with The Bookhouse Pub and MJQ Concourse, which already announced it was relocating to Underground Atlanta, is unknown at this time.