|ACBJ : Atlanta : Archive : 2000 : March : Week of March 6, 2000 : Focus: Commercial Real Estate|
Focus: Commercial Real Estate
BellSouth plan tackles transportation troubles
Matt Gove Staff Writer
The top real estate deal of 1999 might also be remembered as one of the most important corporate initiatives in Atlanta's history.
When BellSouth Corp. announced its plan to build three business centers totaling 3 million square feet of office space at an estimated cost of $750 million, praise came from all over, including the mayor's and governor's offices. Most onlookers thought the Metro Plan (as it was being dubbed) to locate 13,000 of BellSouth's 19,000 local employees on the MARTA line and build smaller business offices and parking decks at outlying MARTA stations was visionary.
But few people knew how long BellSouth's Inge Waddle Jr. and Rob Webber had been working on BellSouth's real estate plans. Waddle is the company's assistant vice president for corporate real estate and services; Webber heads the real estate planning group.
For its ambition, the plan won Best Overall Deal of the Year in Atlanta Business Chronicle's 1999 Best in Atlanta Real Estate Awards.
According to Webber, BellSouth started positioning leases to expire together before the company was sure what its plans would be. "We started to sync up leases in 1994," he said. "We needed to position all of our leases to get out."
The company is fragmented into more than 75 locations around the city. Waddle said that situation might have been allowed to continue, but internal discussions with managers throughout the company brought a push for consolidation. Consolidating wouldn't be easy in a hot real estate market.
"We were watching the real estate market and seeing it spread into the suburbs," he said. "Most new buildings were being leased quickly, which left no large blocks of space."
That situation left Webber and Waddle with no quick fixes to consolidate any significant percentage of BellSouth's local employees. It also told BellSouth that it needed a plan or it would face the prospect of becoming more fragmented, Waddle said. "We had to create our strategy and not be driven by what developers were bringing on the market."
BellSouth turned to Carter & Associates for consultation sometime in mid-1997.
"At the outset, [BellSouth] said, `We have all of these locations, most of the leases are co-terminus and we want to know what you think,' " said Phil Stevenson, executive vice president and head of development for Carter.
From there, the BellSouth/Carter team began to examine options, starting with analyzing BellSouth's employee base. After determining that a large percentage of the employees were coming from north and northeast of downtown, the group looked at the real estate market and the dynamics that were affecting it.
Atlanta's economic growth and the city's oft-discussed transportation issues were the top factors influencing the real estate market, Webber said.
As it began to consider more specific options, the Metro Plan team looked at a full consolidation in a number of areas including the Georgia 400 corridor. That type of huge campus didn't add up, Webber said.
"We had a fair amount of internal push for Georgia 400 but when we looked at transportation and business issues, it didn't make the most sense."
Waddle said when BellSouth looked at the employee demographic data and worked with the Atlanta Regional Commission to discuss how the city's transportation would evolve, "we really saw nothing that made us believe [Georgia 400] traffic was going to get better."
Webber said the company finally settled on a surprisingly simple strategy. "What's best for [BellSouth] is, whatever we decide to do, to make sure our folks can get to our buildings," he said.
After that decision, "it became our job to first look with them at broad regions, then as the idea of several substantive campuses developed, we got site-specific and researched alternatives," Stevenson said. "It was a very logical culling."
Having three of its major existing buildings (BellSouth Center, Campanile and 1100 Peachtree) intown was an influence. And having those buildings near MARTA stations was even better, Waddle said.
"All the figures said we need to stay near existing transportation," he said.
The details of the plan are practically unchanged since its announcement early last year.
Approximately 80 percent of BellSouth's Atlanta-based employees will work in three new locations: Lenox Park Center, Lindbergh Station Center and Midtown Center. All three locations are within walking distance of MARTA stations. Webber said, "We look at MARTA as a people mover between our office locations."
For the large number of employees that live in areas not directly accessed by MARTA, BellSouth is working with the transit authority to construct satellite parking lots at four stations: College Park, Indian Creek, Doraville and North Springs. The parking facilities will have business centers with conference rooms and the ability to link up to BellSouth's corporate computer network.
Webber describes it as "hooking up with the mother ship, as it were." Webber also said it will help BellSouth's far-flung home-based employees to have an small office closer to home.
Construction on all of the projects is slated to be complete by 2003. Some of it will be done as early as next year.
Trouble at Lindbergh
The only bump so far has been the fight put up by the neighborhoods around the Lindbergh Station project. MARTA selected a Carter-led team to develop nearly 50 acres of MARTA-owned land around the Lindbergh station in 1997. BellSouth committed to the office space at the proposed project before announcing the Metro Plan.
Waddle said his company is "bumping up on some critical dates for lease expirations" but still is very committed to the Lindbergh site.
Stevenson said all facets of the plan are proceeding.
"All of the land has been acquired. We're under construction at Lenox Park and should be under way at Midtown and Lindbergh in the next month."
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