With The Streets of Buckhead, developer Ben Carter believes he has the formula to transform Buckhead Village from a troublesome bar district into a new street scene of world-class living, dining and retailing worthy of this city's wealthiest neighborhood.
ATLANTA — With The Streets of Buckhead, developer Ben Carter believes he has the formula to transform Buckhead Village from a troublesome bar district into a new street scene of world-class living, dining and retailing worthy of this city's wealthiest neighborhood.
The ambitious, $1.2 billion project broke ground Aug. 3, with a target of opening phase one in fall 2009. With four new hotels, two 21-story condo towers and 600,000 square feet of retail construction spanning seven blocks, the project is being touted as Atlanta's version of Rodeo Drive and other famous shopping streets.
"My vision for this is something comparable to Madison Avenue from 59th to 70th Streets," said Carter, founder of Atlanta-based Ben Carter Properties, a commercial real estate firm that has developed many of the Southeast's major malls, including Mall of Georgia.
In the past two years, Carter bought up nine acres — seven city blocks — in the heart of Buckhead. In July, dozens of businesses and bars that brought negative publicity for the area over the past decade closed down to prepare for the new construction.
So far, announced fashion tenants include Hermès, Bottega Veneta, Domenico Vacca, Etro and AG Adriano Goldschmied. Hotels will include Starwood Capital Group's 1 Hotel & Residences and a "green" luxury hotel brand. Restaurants will include two New York eateries: La Goulue and Bottega del Vino.
The "Village," an eight-block neighborhood, had become an eyesore in the heart of Buckhead, a 28-square-mile area 10 miles north of downtown that is well-known as Atlanta's toniest district. With its old-money mansions on rolling green lawns, Buckhead's median household income is $160,000 and its 70,000 residents swell to a population of 140,000 during the workday.
And The Streets of Buckhead isn't the only project around. The area is booming with new construction. A total of 21 major new developments, mostly high-rises, have sprung up along or around Peachtree Street in recent years, according to the Buckhead Coalition, an organization of 100-plus chief executive officers of businesses in the area.
But the dream of many such developments, including The Streets of Buckhead, to create viable, pedestrian-friendly street retail with shops, restaurants and walkable avenues, has been elusive. Unlike other cities' famous retail streets, Atlanta's Peachtree Street, which runs north to south from downtown Atlanta through Buckhead, has never sustained a successful retail scene.One reason is Atlanta's growth patterns. The 28-county metro area just topped five million in population and is expected to add another 2.3 million people by 2030. Suburban sprawl created car dependency and traffic gridlock that only just recently has developers looking back into town with mixed-used projects to get people to shop, live and work in the same place.
Carter said he understands the challenge. To build street retail from scratch, he has to lure international luxury retailers to an unproven street concept. It's especially difficult given the proximity of two successful luxury malls — Lenox Square and Phipps Plaza — both Simon Properties that sit less than two miles north of The Streets of Buckhead. Anchored by Neiman Marcus, Saks Fifth Avenue, Bloomingdale's, Nordstrom, Macy's and Parisian, the malls also have the big luxury specialty stores that developers covet.
"We knew Lenox and Phipps were powerhouses, and we didn't want to raid those properties," said Carter. "We did a database search for those that weren't here. Those we talked to had considered Atlanta for years, they knew the Buckhead area, but they were looking for established street retail, which hasn't really existed."
The Streets of Buckhead plan includes retail divided into three areas, all with restaurants and landscaping along the street that support the themes. The "luxury" area includes confirmed tenants Hermès, Bottega Veneta and Etro. A "trendy" area will include tenants such as AG Adriano Goldschmied and Custo Barcelona, and a third area, dubbed "SoHo," targets edgier, younger retailers yet to be revealed.
The early fashion tenants pointed to Atlanta's rapidly growing population and Buckhead's reputation for big spenders. Several said their customers wanted the exclusive ambience of street shopping among the co-tenants promised by The Streets of Buckhead.
Hermès will close its 1,500-square-foot Lenox Square location in 2009, doubling space with an approximate 4,000-square-foot store in The Streets of Buckhead. The new store will allow for expanded product in all categories. Ready-to-wear clients will get larger fitting rooms and sitting areas, and the store will have space for more home and furniture offerings.
"The Atlanta market is one of the fastest growing markets for retail and for Hermès in particular," said Robert Chavez, president and chief executive officer of Hermès USA, who pointed to growth especially with high-income customers. "The Atlanta market is growing at a much faster pace than many other U.S. markets."AG Adriano Goldschmied is opening its first store in the Atlanta market.
"Our affluent customers would rather not shop malls if they don't have to," said Frank Pizzurro, vice president of retail for the company, a Los Angeles-based vertical retailer of men's, women's and children's wear. "We prefer street locations for the flexibility and independence they offer."
Another reason for staying out of the malls is that the line is carried by department stores including Saks, Nordstrom and Bloomingdale's at nearby Lenox Square and Phipps Plaza, said Pizzurro.
"We don't want to cut into our wholesale business," he said. "But opening a store in a city usually increases name recognition and helps our wholesale business in the long run."
The new 2,400-square-foot store, like the brand's other 20 locations, will have an industrial look, with steel, leather and glass elements. Showcasing denim priced from $150 to $325 on a large table in the center, the store also will offer the full collection of knits and leathers.
Milan-based luxury men's and women's line Etro, which has 80 stores in Europe and Asia, began a U.S. expansion in 2001 and now has five stores. Two are in New York, with others in Beverly Hills, Las Vegas and Coral Gables, Fla.
Marco Pievani, general manager for North America, said he liked the European flavor of the Buckhead project and based the Atlanta move on the strength of business in Saks and Neiman's here.
"The climate is good for our color and prints, and we've had good sales in the region," he said.
Industry experts said Buckhead's existing demographics along with the residential, hotel and office components will lay the customer foundation, providing the residential, daytime and tourist traffic necessary to support new retail. Despite the malls' proven track records, convincing retailers to take a chance on a pioneer street concept may be easier in the realm of luxury.
"Malls don't have as much leverage with high-level, luxury-level tenants. Malls need them more than [luxury tenants] need malls," said Marc Weinberg, operating partner for the Georgia division of The Shopping Center Group, an Atlanta-based commercial real estate firm, adding the Buckhead project's initial tenants would be instrumental in luring others. "The project has some good bell cows to lead others to it and the ceo's all talk to each other."David Lanier, managing director of the CB Richard Ellis Group brokerage division in Atlanta, said the luxury consumer is key to the project's success.
"Luxury customers want the New York-Chicago experience of a street of shops, rather than a mall where people are just hanging out. They want the unique flavor and the experience, rather than anywhere U.S.A.," he said, adding it will take time and patience for the experience to unfold. "The developer has to sell retailers on the future vision and that's what developers do best."
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