BYLINE: WALTER WOODS
DATE: August 11, 2004
PUBLICATION: Atlanta Journal-Constitution, The (GA)
EDITION: Home; The Atlanta Journal-Constitution
Bank of America Plaza — a building designed to proclaim Atlanta’s bold optimism and the New South’s tallest structure — is at a crossroads.
The striking, 55-floor red granite tower stands in a frugal era when grand, urban skyscrapers are not in vogue, and two of its largest tenants are thinking of moving out.
Ernst & Young, with about 1,000 employees, and law firm Troutman Sanders, with 600, have leases that expire in 2007. Both firms were original tenants, but now they may trade for bargain rents in what’s become a down market for office leasing.
Both tenants could stay put, but the recent track record among big-tower tenants here is not promising.
Southern Co., parent of Georgia Power, said in January that it would vacate its 22-story tower at 270 Peachtree for new digs a few blocks away.
Law firms King & Spalding and Powell, Goldstein, Frazer & Murphy said last year they would leave downtown’s classical, 50-story 191 Peachtree Tower for Midtown.
Wachovia, another large tenant at 191, has a lease that expires in 2008. In June, Wachovia agreed to purchase SouthTrust Corp., which has its insignia on a new tower overlooking I-75/85.
In an uncertain economy, many companies looking to enjoy and exude value are choosing low-rise suites near their suburban employees, where office rents are less than $20 per square foot. Space in trophy towers in Buckhead or Midtown can be $10 more per square foot.
“Buildings reflect the image of the corporate psyche at any given time,” said Bob Voyles, a developer who recently started his own company, Seven Oaks Co. “Enron building this glitzy tower in downtown Houston reflected the go-go 1990s. Southern Co. … wanted a statement but a more efficient look.”
Change in attitude
Some companies are willing to pay a premium for the image of a landmark building. A prominent firm like Troutman Sanders is not going to “some box in the suburbs,” said Andrew Lechter, senior vice president at broker Studley.
But even famous names staying inside I-285, including Southern Co. and Norfolk Southern Corp., have opted in recent months for medium-size, efficient headquarters with reasonable rates — within Atlanta ZIP codes.
Even the most prominent metro tower under construction, King & Spalding’s 41-story headquarters at Peachtree and 14th streets, is scaled back as trophy towers go.
Developer Hines is building only 25 percent more space beyond what the firm will occupy, said Voyles, formerly vice president at the Hines firm. The building, named 1180 Peachtree, will be 681,000 square feet when it opens in 2006.
Bank of America Plaza is 1.2 million square feet. 1180 “is beautiful, but it’s not on that scale,” said A.J. Robinson, president of Central Atlanta Progress.
Originally C&S Plaza
Bank of America Plaza, soaring to 1,023 feet, features 40-foot arched entrances and gold leaf on its 50-ton, 90-foot spire.
The style of the mid-to-late 1980s was iconic buildings, particularly in Atlanta, but you couldn’t build them today, said Robinson, a former developer.
“People want smaller, suburban-type designs,” he said. “One day we’ll refer to [buildings like Bank of America’s] as ‘great old buildings.’ “
Cousins Properties, Bank of America Plaza’s 50 percent owner, resists the notion that its asset is dated. “Trophy towers are not necessarily out of style. It depends on the market,” said Matt Gove, a Cousins spokesman. In January, Cousins opened a 33-story building in Austin, Texas, that city’s tallest building, Gove said.
And no matter whether or where Ernst & Young and Troutman Sanders jump, Cousins is “absolutely” confident it can find new tenants, Gove said. “We’re confident because of the quality of the building.”
Both firms have deep roots in the structure and did business with the building’s first tenant, C&S Bank. C&S, the storied local bank, helped bring the Braves to town.
In a partnership with Cousins, C&S approved the then-dubbed C&S Plaza in the late 1980s. Bennett Brown, the bank’s late chairman, said in 1989 that its new headquarters was “not just a statement but a proclamation … of boldness, of optimism” for the bank and its hometown.
But two years later, with the tower under construction, North Carolina’s NCNB Corp. took over C&S. What became NationsBank, and later Bank of America, replaced C&S as the building’s owner and signature tenant.
Today there are trophy towers branded Bank of America Plaza in Dallas and Tampa. But Atlanta’s is still special, said Dwight Morgan, executive vice president of Skanska, the construction company that built it.
The building, finished on time and under budget, is a “success story,” Morgan said. “It’s an outstanding icon for the city.”