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Atlanta Journal-Constitution, The (GA)

May 23, 2005 Section: Horizon Edition: Home; The Atlanta Journal-Constitution Page: E1

Horizon profile: Miller-Gallman Developers: Turning old new? Ask experts Intown loft pioneers 'found niche market'
DAVID PENDERED The crackle of development along Atlanta's proposed Beltline is a sweet sound to two pioneers of the loft movement who built a trio of successes near the old rail line. Jerrold Miller and Bruce Gallman converted about 4 acres of blight near Atlanta's City Hall East into three residential projects -- Troy Peerless, Glen Iris and Ponce Springs. The first two developments are almost sold out, and Ponce Springs opened this month with brisk sales. Now Miller-Gallman Developers is poised to add a consulting arm. The aim is to advise other residential developers about the potential for adapting and reusing the innumerable old buildings that flank the Beltline and dot the inner city. Atlanta seems to have a high number of condo buyers who want to live in retooled manufacturing plants. "If you're accustomed to building on a clear lot, it's a 180-degree change to rethink the development if there's a historic structure on it," Gallman says. "You have to think about incorporating the historic structure, or redoing the historic structure into something that's new from the ground up." Modifying old factories is a challenge for both technical and political reasons. One current controversy in Atlanta involves the Masquerade nightclub adjacent to the planned Beltline in the former DuPre Excelsior Mill and within sight of MillerGallman's lofts. Most of the Masquerade was to be torn down to make way for nearly 200 condos in a midrise building. Developer Larry Wolfe said there was no way to save much of the Masquerade and still build a project with enough density to make a profit. Neighborhood residents took action in February and persuaded Atlanta's historic preservation agency to save the old mill, at least into this summer. Wolfe now is trying to devise a plan that would save a large portion of the building and still provide high density. Miller and Gallman declined to talk about the way the Masquerade was handled. But the case does illustrate the nettlesome nature of intown development, and is widely seen as a precursor of debates over the fate of old buildings in established neighborhoods along the Beltline. "The natural inclination is to maximize density, because that's how you make the most profit," Miller says. "As soon as you rezone to high density, you've made a profit. Atlanta has a long history of land speculation. The danger is that we speculate on high density at the sufferance of building what's compatible with the surrounding neighborhood." Miller-Gallman formed in 1995 when its founders decided to collaborate on retooling Troy Peerless from a shuttered hand laundry built in 1927 into 35 residences. Both had interest and experience in rehabilitating old buildings. Gallman, for instance, put Castleberry Hill on the map in the 1980s by retooling an old industrial district into an artists colony south of the Georgia Dome. Miller recast the historic Healey Building in Atlanta's central business district into residential condos. A decade ago, construction loans were hard to get. All the smart money was being invested in suburban subdivisions and power centers. Lenders were not eager to plow money into speculative intown loft conversions. "The loft developers downtown . . . borrowed on their credit card because there wasn't any kind of loan program available," says Jim Mynatt, who retired as a senior vice president after running SunTrust Bank's then-nascent lending program for loft conversions. "They were pioneers who deserve a lot of credit, because they found a niche market." Miller and Gallman credit SunTrust for providing construction loans that spurred their business and the overall trade of loft conversions. Mynatt says he oversaw a loan program with a total of about $50 million that provided financing for three to

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