FEATURE ARTICLE, MAY 2006

HOME GROWN COMPANY HELPS HOME GROW
H.J. Russell & Company is preparing to be a big part of Atlanta’s intown development boom.
Chris Thorn

H.J. Russell & Company is developing Sky Lofts in the West End of Atlanta, Georgia.

“Ten years from now, this city will look totally different,” says Jerome Russell, president of H.J. Russell & Company. “Inside the beltway, economic velocity will be equal to what happened during the last 20 years. People are merging back into downtown.”

This economic wave is being spurred by initiatives like the The Beltline Partnership, which will use tax allocation districts to kick start development in specified areas around the downtown core, and projects like Atlantic Station and the Georgia Aquarium that are bridging the gap between Midtown, Downtown and the emerging areas.

“Edgewood, the West End, Castleberry Hill and Washington Park are all areas that we play in,” Russell says. “We see a lot opportunities there that are going to be driven by location, transportation and infrastructure.”

To complement its other two sides of the company, H.J. Russell & Company also operates a development arm under the name Russell New Urban Development. This entity began by developing the multifamily portfolio throughout the company’s 53-year history and has now transitioned during the last few years into producing mixed-use projects, with a bulls eye on these emerging areas.

The company recently completed the Village at Castleberry Hill, a $17.8 million, 166-unit multifamily complex in Atlanta. A major project currently under development on the West End is the Sky Lofts. The first phase of the $16 million, 199-unit condominium project, located at the corner of Ralph David Abernathy and Joseph E. Lowery boulevards, is scheduled for completion this spring. Another project on the West End is the $50 million Historical West Side, which will feature 60 townhomes, 150 condominiums and 40,000 square feet of retail space when complete in 2007.

“We are continuing on this path where we play on the fringes of this intown development,” Jerome Russell says. One way the company is able to do this is by redeveloping land it already owns, such as a 4.5-acre site off Edgewood Avenue near the Martin Luther King Marta Station.

“That original development went through its cycle. The area went down and now it is coming back,” Jerome Russell says. “That is a perk of owning it.” Russell will demolish a 108-unit HUD development and build a more than 200-unit condominium project on the site beginning in 2007.

Herman Russell, the company’s founder, followed the business philosophy of retaining the properties the company developed throughout the years, which has kept some prime sites in the company’s portfolio while other developers are paying a premium for equivalent land. That business model also led to the creation of what Jerome Russell refers to as “the backbone of the development portfolio.” The company owns 40 different assets, the majority being FHA/HUD, garden style apartment buildings, across the city, which translates into plenty of opportunity in upwelling development.

With the resurgence of interest in the core areas of Atlanta, some companies might plan on ramping up their development schedule. Not Russell though. The company is taking a more controlled approach, aiming for quality instead of quantity. Currently, five projects are in various stages of development with the company planning to keep the pipeline full and around that number for the next few years. But that attitude of controlled growth is not being applied to the construction division.

“On the construction side, we will be much more aggressive,” says Michael Russell, CEO of H.J. Russell. “Frankly, most people know the Russell name as a construction company. And that name can get us through a lot of doors as long as we continue to execute.”

As a contractor, Russell has been involved with high-profile Atlanta projects such as the Georgia Dome, the High Museum, the Georgia World Congress Center and Phillips Arena. Ten percent of the company’s construction volume is internal projects while the other 90 percent is external. Last year, the company completed $175 million in construction volume.

“We have grown as a company as a third-party builder,” Michael Russell says. “Our business model is fairly unique as a company with a development arm but also with a construction arm that has a much bigger infrastructure and a much wider breadth of resources to build.”

The construction division currently is working on a few unique projects in the Atlanta area. Russell is building the Manhattan, a 470,000-square-foot, 27-story condominium tower, for Southeast Capital. The project is the first residential high-rise to be erected around the Perimeter Mall area. Russell also is constructing a Target in Atlantic Station. The store will implement a unique urban layout with two stories and a small park area in front of the store.

And as Atlantic Station continues to grow, Russell will be ready to be a part of the tertiary development it influences.

“We have not seen the residual from Atlantic Station yet,” Jerome Russell says. He points to an area west from the Interstate 75/85 connector, with Atlantic Station as the northern border and running west and south for a few miles, as the Near West Side. The company has its eye on that geographic confluence and expects big things to happen in the future.

“We are very bullish on this area,” Jerome Russell says, “There are going to be way more opportunities than we can take advantage of. Right now, we are just trying to position ourselves for good quality developments.”

And with a solid property management portfolio, a healthy and expanding construction business and a burgeoning development focus, the company will be a major player in the growth of Atlanta.

“We are in a very good space right now,” Jerome Russell says. “And it will be that way for next few years.” 

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