Atlanta airport hotel project canceled by developer

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On Wednesday, Atlanta Airport general manager Balram Bheodari said development of the hotel was halted.

The demise of the project did not come during a catchy press conference, but during a disclosure to the city council during a committee meeting, as Bheodari explained. why a sanitary sewage relocation project was no longer necessary.

Bheodari said there was no developer penalty for canceling the project. Majestic did not immediately respond to requests for comment.

For the hotel project, Hartsfield-Jackson went through a lengthy contracting process and in 2016 awarded a 50-year lease to a joint venture between developer Majestic Realty Co., real estate firm Carter and GPM Investments LLC. At the time, airport officials said the project could represent a private investment of $600 million. investment.

The developers brought in Atlanta-based Portman Architects as the designer for the proposed hotel with 11 floors and 440 rooms.

Initial plans were for an InterContinental hotel, then in 2019 the developers announced a deal with Hilton.

But the project did not take off. Construction never started, and instead there were years of delays and concept changes.

In preparing for the hotel, the airport lost parking revenue – and generated more frustration for travelers – because in 2019 it closed the airport’s west economy lot next to the terminal to make way to construction.

Bheodari said the airport had hired a consultant to explore other options for the land where the hotels, mixed-use development and gas station were supposed to be built.

He said the airport would also consider reopening part of the West Economy airport car park for the busy holiday period and as the airport begins a multi-year overhaul of its car parks.

The idea for a hotel next to the Hartsfield-Jackson terminal was originally proposed in 2014 by then-airport manager Miguel Southwell, who saw it as a convenient option for stranded travelers when their flights are canceled. The developers also envisioned the hotel hosting meetings and conferences.

In 2017, the airport accepted an annual $500,000 rent rebate from Majestic as a concession to reduce the hotel’s space by a few acres. In 2019, the hotel was redesigned with a planned opening date of 2022.

Then the pandemic led to a historic 60% drop in passenger traffic at Hartsfield-Jackson in 2020. One of the hardest hit sectors has been business travel – which would have been a key market for the hotel and the mixed-use development at the airport.

In 2020, Majestic requested an extension of a due diligence period to give it more time to address the impact of the COVID-19 pandemic on the hospitality, travel and finance sectors.

Last fall, the airport and Majestic scaled back the project, scrapping plans for a mixed-use development and a gas station. Last year, the airport also agreed to delay the start of the lease until July 2022, and if the developer could not secure financing for the project by then, it could terminate the agreement.

The The airport had hoped the hotel project would demonstrate the business benefits of a public-private partnership to generate revenue and add amenities for travelers by developing the airport land.

But such efforts have proven difficult. Hartsfield-Jackson’s long-planned composting and recycling facility, called Green Acres, was also canceled because it was unable to obtain Federal Aviation Administration approval for development on the property. airport, Bheodari said. Compost carries the risk of attracting wild animals such as birds which could become a hazard to planes taking off and landing.

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