During the war, as the Yankees came with their guns and torches, Henry Irby laid his gold in a dishpan and buried it in the clay. So goes the legend. Irby lived at the center of Buckhead—indeed, his famous tavern, with the head of a deer mounted on the front porch, gave Buckhead its name—and he barely survived the fall of the Confederacy. The legend is hazy on the fate of his gold, but circumstances suggest it never resurfaced. Irby fed his family by selling land for five cents an acre and sometimes bartering land for wheat.
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One hundred and forty-two years later, a man named Ben Carter sank $200 million into the same soft earth. This is a lot of money: larger than the gross domestic product of some countries, enough to buy five tons of pure gold. Carter bought about nine acres across Peachtree Road from the place where Irby’s Tavern once stood. He wanted to turn the old Buckhead Village into Atlanta’s version of Rodeo Drive, and if this sounds like a wild idea now, in the New Age of Austerity, here are two reasons it made sense then: First, it was 2007, when banks were still lending enough to get ambitious projects built; and second, he was Ben Carter, a developer with something close to the golden touch.
What happened next was not the fall of the Confederacy, but it did leave a lot of smoldering wreckage. In Buckhead it left a wound in the soft pink saprolite, two blocks long and up to forty feet deep. This should have been Carter’s masterpiece, but the funding dried up a year ago and he stopped building in the middle of the job. The rules have not changed since 1865. Every developer knows this. Any time you put money in the ground, you risk losing it forever.
But Carter has not lost yet. At this writing, he said he was close to making a deal that would provide enough new capital to finish his masterpiece—another $200 million, enough to buy five more tons of gold.
In a time when some people have stopped buying groceries at Walmart because they’re afraid of wandering to another department and spending $8.88 on a frivolous impulse, it would be easy to call Carter’s plan irrelevant. But hardly anyone would benefit from his failure, other than land scavengers, and nobody wants to see Buckhead with a gaping wound in its heart. Just as the Southeast depends on Atlanta for its economic vitality, Atlanta depends on Buckhead. It contains barely one-fifth of the land and population, but it pays almost half the taxes. A dollar in a cash register on East Paces Ferry might help extinguish a fire in Grant Park.
Given the project’s rough state of incompletion, you may be surprised to learn how much public support Carter still has. People still call him a visionary and a hero. This is partly because his success would make almost everyone in Buckhead more successful, and so by cheering for him they are cheering for themselves. But there is another reason, one that goes back to the history of the land. The same people who call Buckhead Village a ghost town say the ghost town is an improvement. Things used to be even worse.
Aerial shot of Streets of Buckhead site;
photo by Andrea Fremiotti
Atlanta’s ribbon-shaped skyline runs north to south along the Peachtree Ridge, also known as Peachtree Street. If a drop of rain or blood falls on the west side of the ridge, it filters down through the saprolite toward fine-grained black rocks of the Ordovician Period and eventually slips into the Gulf of Mexico. If it falls on the east side of the ridge, it rolls down toward the Atlantic Ocean.
Ten years ago there was blood in the streets of Buckhead, just east of the Peachtree Ridge, on the land Ben Carter had not yet purchased. Originally, the land had been taken from the Muscogee Indians and cut into narrow parcels on which its many new owners set about making their livelihoods. They were grocers, jewelers, bankers, and clothiers, and in 1927 at the Wender & Roberts Drugstore you could buy a Coke with crushed ice for a nickel, the same price Henry Irby once got for an acre of land. This is all recounted in Susan Kessler Barnard’s book Buckhead: A Place for All Time. The Ku Klux Klan had an office nearby, with a hidden room to hold the special wooden-wheeled tricycle they used to initiate new members, and in the thirties they sounded horns and marched around in full robes to clear out the black folks and make way for white shoppers. A Fulton County commissioner took that operation a step further in the forties when he got tired of having black people next to his house, near Pharr Road and Grandview Avenue. He got the other commissioners together and they bought the land and made it a park.
Lenox Square opened in 1959, luring some merchants out of the Village and taking customers from the merchants who stayed. Gradually the mixture shifted. Land was passed from one generation to another, and the new owners seemed to care less about how the property was used and more about how much money it would make them. Landlords found they could double their rents by replacing boutiques with bars or restaurants. City officials relaxed parking and licensing requirements. Nightclubs proliferated.
Buckhead and Atlanta have a long and uneasy symbiotic relationship. Around the time Buckhead was annexed into the city in 1952, unofficial Buckhead mayor Red Dorough buried an effigy of Atlanta Mayor William Hartsfield and had the coffin carried down Peachtree Road. Now Atlanta has a black mayor, Kasim Reed, who is paid $147,500 in taxpayer money to govern the city. Buckhead has a white “mayor,” Sam Massell, a former Atlanta mayor who is paid $250,000 in private funds to promote the neighborhood and speak for a powerful group of businesspeople called the Buckhead Coalition. Nevertheless, Atlanta uses Buckhead’s money, and Buckhead uses Atlanta’s international prestige. Whether or not they always get along, most people agree they need each other. One notable exception was Bill Campbell.
In 1994, Campbell became Atlanta’s third black mayor, and he did little to hide his contempt for Buckhead. He called white people “Mr. Charlie,” referring to the notorious white taskmaster of the early twentieth century. It hardly seemed like an accident that Buckhead had only half the police officers it needed. Anarchy crept into the Village.
Today there are people of various stripes who remember the party district with warmth and nostalgia. It was not all bad. Atlanta has seldom had such a lively and diverse haven for nocturnal merriment. But things got too lively. The party spilled into the prim residential neighborhoods that surround the Village. Windshields were smashed, shrubbery desecrated. Cruising lowriders choked off traffic on Peachtree Road. On weekend nights it was hard to sleep with all the honking and shrieking and thundering beats. Then you had the gunfire.
Like many political issues in the history of Atlanta, this one could be seen as a clash between black and white. Robin Loudermilk, CEO of the rent-to-own corporation Aaron’s, which is headquartered in Buckhead Village, tells the story of a well-dressed black man who paid him a visit one day to get neighborhood support for a new nightclub. Loudermilk says he later found out from friends in law enforcement that the same man had been involved in a fatal shooting on East Paces Ferry Road the night before. But Loudermilk also says the miscreants in the Village ran the length of the spectrum: Latino gangs running drugs, Asian hoodlums brandishing shotguns, rough white men on motorcycles. It was a rainbow coalition of criminals. The Village got so dangerous on some nights that Michael Krohngold of Tongue & Groove would pull his doorman inside and lock the front door. In the parking garage one morning, Loudermilk stepped on a hollow-point .38-caliber bullet.
This has got to stop, he said.
Buckhead handled the problem the best way it knew how: with money. Loudermilk convened a meeting of Village stakeholders, and right away they raised nearly $100,000. They installed sixty surveillance cameras around the Village and industrial-strength lighting to flood the dark streets. And when the national media descended in 2000 to cover the story of two men stabbed to death in a street fight that involved the football star Ray Lewis’s entourage, Mayor Campbell could no longer ignore the problem. The city brought down the full weight of its governance on the clubs in the Village. Fire marshals seemed to appear every night, writing citations for the smallest violations. Health inspectors and tax collectors were ubiquitous. To the ethical club owners, it didn’t seem to matter how hard you tried to follow the rules. You were going to get busted for something.
Even then, city officials resisted a proposal that would have forced the bars to close earlier every night. Some said it was a conspiracy to keep black people out of Buckhead. Then, in six months in 2003, four men died in the Village streets. One was stabbed and three were shot. Finally the city hastened last call to 2:30 a.m., tightened its liquor-license restrictions, and required every nightclub serving alcohol to have one parking spot for every seventy-five square feet of floor space—a requirement that was difficult or impossible to meet in the Village. Clubs began shutting down. Tranquility returned, but with it came decay. In 2006, on the other side of the Peachtree Ridge, a man in a third-floor corner office looked out his window at the Village and saw an opportunity. His name was Ben Carter.
When people talk about Carter’s project now, they often mention the unprecedented and unforeseeable confluence of events that pushed him to the brink of failure. But in 2006 it would have been just as easy to examine the relevant factors and forecast massive success.
He was the right man to get things done in the Village. Buckhead still resembles a small Southern town in some ways, with deals based on personal relationships that go back generations. Yankee entrepreneurs are sometimes viewed with suspicion. Carter was no carpetbagger. He grew up roaming Buckhead Village. His father, Frank, helped build the Midtown skyline and presided over the Atlanta Chamber of Commerce. No one had to worry that Ben Carter would vanish in the night with work left undone. His life was anchored in Buckhead, and he had a personal interest in finishing the job.
The Village was the right canvas for his masterpiece. Carter first dreamed of building a luxury retail-restaurant-hotel complex in Atlanta back in 1986, but his market research convinced him that the city wasn’t ready. He wanted to build it near the intersection of Northside Parkway and West Paces Ferry in 1999, but neighborhood activists shot it down, partly because they were worried about traffic jams and overflowing sewers. The Village was different. It had a long history of sidewalk commerce, which Carter wanted to continue by lining the streets with luxury storefronts. And after all the sleepless nights with the nightclub district, the neighbors would be thrilled to live near merchants that closed at a respectable hour.
Carter may have been a gambler, but he knew how to win. This was probably the most important point. Even if he had an early advantage because of his father’s connections, Ben Carter had already made his own mark around the Southeast. He had built successful malls in Columbus (Columbus Park Crossing) and Jacksonville (St. Johns Town Center). After Frank Carter died in 1991, Ben left Frank’s old company—where the partners were less adventurous than he wanted to be—to start his own firm and draw the blueprints for the largest mall in Georgia. He studied a map of the metro area, calculating projected population growth and the distances between existing malls, and settled on a remote spot in northern Gwinnett County, thirty-four miles from Downtown Atlanta. It seemed crazy. Only 125,000 people lived within ten miles of the site, half of what the standard formulas usually require. Carter moved forward. He envisioned a complex that combined a shopping mall, a town square, and a public park. He joined forces with D. Scott Hudgens, a veteran mall developer who had been one of his father’s main competitors. They broke ground on the 496-acre site on August 13, 1997, pledging to open exactly two years later. To impress potential tenants at the International Council of Shopping Centers convention in Las Vegas, Carter brought in the Atlanta Rhythm Section to play an exclusive party in the Hard Rock Hotel. At the same convention the next year, he brought in the Temptations. Leases were signed. Newcomers flooded northern Gwinnett. On the morning of August 13, 1999, Carter celebrated the Mall of Georgia’s grand opening with the release of 4,000 monarch butterflies into the on-site nature park. Experts said he had redefined the shopping mall. Georgia Trend magazine named him Georgian of the Year. Money filled the registers.
One morning in 2006, Carter sat down for breakfast at the Corner Cafe on Piedmont Road with Jim Cumming, a land baron who had given Tom Wolfe guidance for his novel A Man in Full, which was also about an Atlanta developer. Cumming and his land partner, George Rohrig, owned a good chunk of Buckhead Village.
“The Buckhead Village is an embarrassment,” Carter said. “And I want to do something about it.” The idea was more than just business to him—it was a chance to reclaim the neighborhood where he grew up. A story in the Atlanta Journal-Constitution would later depict him walking the Village streets, reminiscing about the places where he took ballroom-dancing classes, bought his first Emerson, Lake & Palmer album, and had his first kiss.
Cumming liked Carter’s idea, but he thought Carter was seriously underestimating the price he’d have to pay for the land. He suggested building the luxury complex along the Piedmont corridor, where land would be more affordable. Carter didn’t care about that. He wanted to transform the Village, even if it came at great expense. Cumming was impressed with his determination.
Nevertheless, assembling the land would be a monumental task. The largest owners were Rohrig; Cumming; Robin Loudermilk and his father, Charlie Loudermilk; and David Davoudpour, a businessman who was finishing a deal to acquire the entire Shoney’s restaurant chain. The five men had a loose alliance based on the common belief that someone should redevelop the Village. But not all of them were immediately sold on Carter’s idea, and it wouldn’t have been enough if they were. Their combined holdings still resembled a checkerboard. The land had been cut into tiny fragments.
Carter moved forward. He pitched the idea to a variety of financiers, from private investors to CB Richard Ellis and Bank of America, obtaining more than $300 million to spend on the project. He began courting the smaller owners, offering double or triple the land’s appraised value. When the larger landowners saw him buying the smaller pieces, they realized he wasn’t going away. Even though other developers had proposals for the Village, no one but Carter had the will or the means to bring all the land together. But because he needed each individual owner more than they needed him, they had the leverage to demand a king’s ransom. In the end, besides buying twenty-five tenants out of their leases, he bought thirty-seven parcels from eighteen owners for an average of $22 million per acre. No one interviewed for this story could think of a time in Atlanta when anyone paid so much for land.
On August 3, 2007, the Dow Jones Industrial Average plunged 281 points after an executive for Bear Stearns said turmoil in the credit markets was the worst he’d seen in twenty-two years. The Labor Department said unemployment was up slightly, to 4.6 percent, a figure that did not include the recent layoffs of nearly 7,000 employees at American Home Mortgage Investment Corporation. A headline in the Denver Post read, “Is recession already with us?” And that morning, with champagne and chandeliers under an air-conditioned tent, Ben Carter held the groundbreaking for a billion-dollar project called the Streets of Buckhead. The eminent sculptor Frank Stella attended, along with his tangled stainless-steel creation K.3, which Carter had bought for $1 million to put on display at the site. Carter read off a list of French and Italian tenants, many of which were foreign to the dignitaries in the audience. But Mayor Shirley Franklin approved. She had recently gone shopping in Europe at the same boutiques.
“We are excited to bring Milan and New York right here to Buckhead,” she said, according to the Atlanta Journal-Constitution. “Where will people live, shop, eat, and invest? There is no question today that Buckhead is going to be at the top of the list.”
Then everyone walked outside toward the shuttered CJ’s Landing, which once advertised free Texas Hold ’Em on Wednesday nights and three tournament-quality beer pong tables. They watched a front-end loader tear the building apart.
Ben Carter keeps his Learjet at Charlie Brown Field, fifteen minutes from his house in Cobb County. He calls it his Chief Executive Officer. Traveling is his favorite activity, especially when it involves his daughter, Palmer, and his son, Ben Jr., who are his two best friends and who are also two of the twelve vice presidents in his company. Carter would rather do business in person than by phone or e-mail, which is why he keeps the Learjet. His wife, Tricia, goes with him on every business trip. It takes ninety minutes to fly from Charlie Brown to Teterboro Airport in New Jersey, which puts him a short drive from Manhattan. He can leave his house at 9 a.m. and be in New York for a meeting by noon. He goes there often, and he goes to many other cities around the world. In the past year or so he met with nearly 125 different people and firms for the same general purpose. He wanted them to put money in the land of Buckhead Village.
He ran out of money in April 2009, twenty months after the groundbreaking, with the project 40 percent completed. Developers rarely start construction without having all the money to finish it. But Carter believed he was covered. Thanks to his own investments and those of his equity partner CB Richard Ellis Investors, he broke ground with nearly half of the financing already in hand. He says several banks expressed interest in providing the rest. One of them was Wachovia, which had financed most of his previous projects. Wachovia did put in some cash. But, Carter says, as the banking crisis worsened, Wachovia pulled out of the deal and demanded its money back. (Wachovia officials declined to comment.) Carter was left to search the world for private capital.
The argument for Carter goes something like this: Within ten miles of the Village, there are 100,000 households with an annual income of $100,000 or more. There are 30,000 with a net worth of $1 million or more. There are many other underserved rich people in Charlotte, Nashville, Birmingham, Knoxville, and Augusta. It doesn’t matter if most of the people in metro Atlanta have never heard of Brioni, or Etro, or Domenico Vacca, or Loro Piana. It doesn’t matter if hardly anyone can properly pronounce Hermès. What matters is that a few can. The sound of these names rings in their ears like a high-frequency whistle that only a dog can hear. And they come running.
They don’t care if you recognize the brand name on that silk scarf or that goatskin handbag. It’s certainly not about conspicuous consumption now—because that would be gauche—but in fact it never was. It was always about quality. They used to fly to New York to get it, and now they won’t have to. In the winter they will go down to the Village and spend $4,000 on a cashmere-lined Italian bomber jacket and $1,750 for a cardigan of high-grade Italian wool. In the summer they will pay $200 for French swim trunks printed with photorealistic red pineapples. They will furnish their mansions off West Paces Ferry with silver flatware from Christofle and mango-wood bowls from Oscar de la Renta. They will buy just enough of these things to let each boutique turn a profit while also rendering back about $100 per square foot per year to the stakeholders in the land, who will eventually recoup their investments and then some. It won’t matter that $100 per square foot per year is nearly quadruple what the bars and restaurants used to pay in Buckhead Village. The boutiques are used to it. At the Bal Harbour Shops in Miami they pay as much as $400 a foot, and in January 2010, after two years of deep recession, the leasing director said they were still making a profit.
“We’re working our asses off,” Carter said the other day, with a touch of exasperation, referring to the eighteen people in his company who are striving against great odds to keep the Streets of Buckhead alive amid the greatest economic crisis in nearly seventy years. All those Learjet flights have made a difference. He says 70 percent of the space has been pre-leased, and three private capital sources are competing to provide the $200 million it would take to finish construction. Here’s the problem. Bank of America laid out about $170 million to help buy the land, and it would like to be paid back first. But the private investors would also like to be paid back first. Last money in, first money out, as the saying goes. This puts Bank of America in a bind. If it lets the private investors take first position, the project may actually get done—but Bank of America will have to wait even longer to get its money back. If the bank holds fast to the first position, the project may never get done—at least not by Ben Carter. The bank could foreclose, but then there’s no telling what would get built there, or when, or by whom.
“That would be a tremendous mistake,” said George Rohrig, who still owns land near the project. “He’s got the vision, and they’ve gotta ride with him.”
Carter is used to keeping his word. He opened the Mall of Georgia exactly two years after he broke ground, on the exact day he promised it would open. The Streets of Buckhead has made him wrong again and again. In August 2007, he said it would open in the fall of 2009. In November 2008, it was March 2010. In July 2009, he said construction would resume in September 2009 and finish in October 2010. In October 2009, after construction did not resume, he said it would be done in early 2011. In January, he told the Wall Street Journal it would be finished in spring 2011. That same month he told the Atlanta Journal-Constitution that he expected to complete a financing agreement within thirty days and resume construction shortly thereafter. Late in February he said he hoped to get the deal done by mid-March, start construction in May, and finish in the fall of 2011. On March 11 he said he hoped to close the deal in May and restart construction in June. Twelve days later he said Bank of America needed to hurry and decide because his tenants were getting impatient and looking elsewhere. If Carter had any regrets about this thing, he would not admit them. He said he could still look in the mirror with pride.
“If it works,” he said, “it’s a compliment to my entire team. And if it doesn’t work, it’s not really our fault.”
The winners are the eighteen landowners who got out of Buckhead Village when Carter showed them the gold. For now, everyone else loses, including the 50,000 drivers who pass the city’s most valuable ground every day and see a rough wooden fence around a hole in the earth. They can see it from half a mile down Peachtree Ridge. Five tower cranes stand motionless, marking the spot like crosses.