INTRO
This used to be such a ditch when I bought my office, which is just up those stairs. This entire area that I’m standing in now, which is beautifully developed, was actually full of kudzu and chain link fences. It was the BeltLine before there was a BeltLine. Today, it’s one of the most thriving, richest, and most enjoyable areas of Atlanta. If you’ve been to the BeltLine, you know exactly what I mean.
Today’s podcast episode with David Cummings is about a situation like this. The BeltLine used to be a complete disaster zone—it was abandoned property that no one wanted and no one felt safe in. It became Atlanta’s biggest urban development project and, in many ways, is one of the city’s top assets in terms of lifestyle–if not the top asset. Atlanta’s downtown is facing a similar transformational inflection point, thanks to the work of one entrepreneur, David Cummings.
Our conversation is as real as it gets. I hope you take the opportunity to learn more about downtown Atlanta and what’s happening with a 16-acre tract that is now being developed for founders first.
FULL EPISODE – RECORDED LIVE AT VC DAY, VALOR’s ANNUAL MEETING
You’ve earned a lot of fame in this community and the South. I was thinking about this last night when we were having a partnership dinner. You mentioned we met quite a while ago. Looking back, it was like 2005 or 2006.
Yeah. So, Lisa and I met through the Entrepreneurs’ Organization, many, many years ago, and that’s one of my favorite pieces of advice for entrepreneurs: join a peer group, whether it’s YPO, Vistage, The Growth Collective, or EO. Spending time with other entrepreneurs who are on the journey with you is just one of the absolute best things to do.
From the first conversation I had with David through EO, we were strangers. He was building a company called Han Hill, and even in that conversation back then, he focused on culture. Culture has been a guiding part of David ‘s story as an entrepreneur. From a company that was built on culture to a venture-scale company that was acquired and became part of a dynamic culture—ExactTarget, which was acquired by Salesforce. Then David built Atlanta Tech Village, which has completely transformed the startup culture in Atlanta.
And now, through Atlanta Ventures, you’ve targeted and now own the heart of downtown, and you’re going to change the entire culture of the United States through the city. So, I just want to present a little bit of an arc here for the conversation, because David is a humble leader and might not put it quite that way, but that’s the way it is.
David, what are you most excited about now, given all that you’ve achieved, looking into 2025 when it comes to building startups and culture?
So, a show of hands in the room—who’s from Atlanta, lives in Atlanta, or visits Atlanta often? We like to joke that the three hardest things to do in Atlanta are: one, solve the traffic; two, help the Atlanta Falcons win a Super Bowl; and number three, make downtown Atlanta cool. And so, we are wholeheartedly taking on challenge number three.
I’ve lived in Atlanta for 22 years, and for 22 years, the only time I would go downtown was for a sporting event, a concert, or to take my kids to the Georgia Aquarium. And so, as an Atlanta native (by Atlanta standards—I was born and raised in Florida), living here for 22 years, I knew that to be a world-class city, we had to have a downtown that our locals—people who live in the metro region—wanted to go visit. They wanted to hang out, linger, and enjoy the sights and sounds of downtown.
For me, the opportunity to take on that challenge and try to create a startup innovation district in the heart of our city, in an area that’s been overlooked for decades, was something that got me really excited.
Well, Atlanta’s downtown is, of course, something that we’re all very aware of. It’s great to visit, but as locals, we rarely go. But that visitor community—they’re really happy. I mean, there’s a reason the World Cup is coming in 2026, and Atlanta won. It’s because downtown is delivering a fantastic experience for one type of person. How many visitors? What kind of traffic? What are some of the aspects of downtown that attracted you as an investor to the opportunity?
So, Atlanta was started when three rail lines came together in the 1830s and 1840s. It was originally called Terminus, and the goal with the rail lines was to ship goods from the northeast to the Mississippi River. Back then, the Appalachian Mountains made it impossible to go over or tunnel through them. So, they literally went south until they got to the Piedmont region of Georgia, where we’re sitting today, because here they could cross over to the Mississippi River. They put a stake in the ground, the zero-mile marker, and said, “This is where Atlanta is going to be”—at the time, Terminus. It was then renamed Marthasville, and later, Atlanta.
I do like to point out that Atlanta was taken from the Western and Atlantic Railroad because the Atlantic Ocean was viewed as something very desirable to get to. But Atlanta is nowhere near the Atlantic Ocean.
Well, it will be…
It was pure marketing. The marketers were marketing back in the 1840s when they renamed Atlanta from Marthasville to Atlanta because it’s the feminine version of the word “Atlantic,” as in Atlantic Ocean. So, the city started from a marketer who said, “We’re going to market this region.”
No wonder I love it here!
And here we are, marketing it 175 years later, doing the same.
Awesome. I love that.
Well, tell us a little about the parcel that you actually own under Atlanta Ventures and what’s happening with the development, because there are a lot of exciting things happening. Little Five Points Station—give us a sense of the terroir that we’re actually talking about, and then we can dig into a bit of the threads there.
So, Atlanta was started with the rail lines and the zero-mile marker. If you were to get off the train back in the day, you would step foot in what is now known as South Downtown. In 2016, a real estate developer was looking for an up-and-coming area of Atlanta that had a lot of character and history. One of his colleagues had been very successful working on Ponce City Market and the Old Fourth Ward, and they were looking for where the next Ponce City Market was going to be. One of the people on his team found this section of downtown with a number of beautiful historic buildings, just like the one on the screen, and they decided to buy up as much of the neighborhood as they could.
Over the course of seven years, they spent a quarter-billion dollars buying 56 buildings and 89 properties. They like to say that it’s the largest collection of unrenovated historic buildings in the United States. So, we’re going to take what they’ve been saying and keep saying it. They, as Newport Properties, partnered with another German developer, Jamestown, and spent seven years acquiring the 56 buildings and 89 properties. The big vision they had was to create a historic district with a heavy emphasis on spec office space. Then COVID hit, pausing the project for a while. They came out of COVID and were full steam ahead, making office space for general office space users. But demand for office space fell off a cliff, and interest rates shot through the roof. By the summer of last year, the whole development went into foreclosure.
From a timing point of view, we were lucky. We were actively looking to expand Atlanta Tech Village. We had been in Buckhead for 11 years at the time, and we wanted to open a new location. One of the things that slowed us down previously was that commercial real estate prices, especially for office space, had been gangbusters prior to COVID. With COVID resetting the market, we said, “Okay, now that the market’s resetting from an office space and commercial building perspective, let’s see what’s out there.” We were thinking of something more like the Tech Village we have in Buckhead, the one that’s up on the screen. So when a friend of mine told me about this large section of South Downtown, I went and toured it. I took some friends from the Tech Village, and we spent six hours there. We just fell in love with the history—literally, the neighborhood where Atlanta started. We have buildings from the 1870s, and this idea that we could take a historic district at the founding of Atlanta and reinvent it as a neighborhood for founders. So innovation, entrepreneurship, marketing—the things that Atlanta was founded on. Atlanta was started as a City of Commerce and logistics, and so we got really fired up to bring back Atlanta’s founding neighborhood and make it for founders.
I love that. And, you know, I also love that. We’ve all heard that the thinking that creates the problem is not the thinking that solves the problem. One of my favorite things about having David‘s leadership and Atlanta Ventures’ leadership in downtown is that they are not thinking like classic developers, and no one has solved Atlanta’s downtown in, I don’t know, a century. And so it’s going to take some very outlier perspective and some very out-of-the-box thinking. What are some of the ways people should engage with our downtown today? Because last night at dinner, some of us had the opportunity to hear David talking about solving Atlanta’s downtown. Past visitors, where it’s already very successful, is a very multifaceted problem. I think you were meeting with the sheriff and chief of police just yesterday. There’s a picture posted on the blog about it. So there’s a safety component, there’s a people-living component, and then there’s a “why live there” component, which to some extent, is solved by the promise of innovation and founders.
So let us know some of the other things that you’re thinking about in terms of how can Atlantans, like us, like me, get involved in helping revitalize such a promising, sixth-largest metro in the US, downtown opportunity?
Yeah, great question.
So downtown Atlanta was founded before cars existed, right? So what’s the number one thing people think of on the downside of Atlanta? Cars and traffic. And so from a city and from a regional point of view, we’re going to have to reinvent ourselves. Maybe it’s partly driven by driverless cars and Waymos and Tesla Robo-taxis. Maybe it’s driven by the BeltLine. You know, the BeltLine has been one of the greatest economic miracles in Atlanta, and has no signs of slowing down. But the big idea for downtown, across our section, as well as the rest of it, is to make it a neighborhood that people want to live, work, and play.
Historically, our downtown was the central business district, with millions and millions of square feet of office space. And so it’s going to be a big undertaking, but converting that office space to residential, making loft apartments, building new housing, building condos and townhomes, making it a neighborhood that has 50,000 people living there full time—that’s the long-term 2030 year goal for all of downtown. Within our section, we have 16 acres of land, and on our 16 acres of land, we easily have room for 2,000 people to live there full-time. And so the big idea is that downtown Atlanta is viewed as a neighborhood and is no longer viewed as a central business district, but it’s going to take decades to get there.
I’m looking forward to seeing the pieces of it that I will get to see. Tell me a little bit about the foundation that you’re starting around South downtown.
Yes, so we just got our 501(c)(3) status for it. It hasn’t been announced yet, the new foundation, but we have a new nonprofit to help around both the social side. So one of the big challenges of downtown Atlanta is that over the decades of disinvestment, a number of well-meaning social services have been employed and built and created in downtown. And so anybody in the room that’s been to downtown knows what I mean, which is homelessness. So downtown has the largest collection of homeless shelters in the region, probably, you know, top five in the country. And so one of the challenges that we’ve had as a region is that we’ve grown tremendously—Marietta and Gwinnett and Alpharetta and Roswell and Peachtree City and Smyrna, and the list goes on and on. Go ask those city mayors, “Do you have a homeless shelter?” Does Roswell, Georgia, the city, have a homeless shelter? No. Does Gwinnett County? No. Does Smyrna? No. What happened is they sent their homeless citizens to downtown Atlanta. And so downtown Atlanta, with a big heart, kept building more and more homeless shelters and social services, and more churches came in to do mass feedings. And so now you have thousands of shelter beds in downtown Atlanta. How can we have a healthy heart of the region when the neighboring, successful suburbs aren’t doing their fair share? So it’s a really challenging issue, but it’s all going to start with awareness and making it something that we talk about more honestly and more openly.
So homelessness and the unhoused is the number one challenge by far in downtown, and it was all done with well-meaning and a big heart to try to help people, but it has to be something that is not concentrated. Concentrated poverty has never worked, and it never will work.
David, I really appreciate your leadership on this issue and talking about it and bringing us the opportunity to help solve it with Atlanta Ventures. So please keep tuned in to South downtown.
When you bring up the issue of homelessness and the unhoused, issues of safety, issues of urban blight, and unintentional bad development, like parking lot after parking lot, things like that—are you attracted to buying those parcels for purely financial reasons?
No, this is the worst real estate investment ever, not because the buildings aren’t beautiful and not because the land isn’t great, but because there’s a giant disconnect between rental rates and the cost of construction now. Right? So with COVID and the bout of serious inflation, construction costs have gone up 40% in the last four years, and so there’s a huge disconnect, and it’s going to be there for a while between rental rates and construction costs. And then you layer on the challenges that downtown has, and it’s going to take a long, long time before that equation actually balances, cost of construction relative to the rents.
And then, from an Atlanta point of view, Atlanta being a boom town, it’s a town that, through our real estate cycle, has built tens of thousands of new apartments. You look out the window, and you see tons and tons of new apartments and condos just in Midtown alone, not counting the BeltLine. And so in Atlanta, rental rates for apartments declined 6% year over year. So the cost of housing is actually going down in Atlanta. So construction costs went through the roof, and rental rates are going down. So from an investment point of view, it is a very poor financial investment, but a very strong investment for helping Atlanta over the long haul.
So a lot of people call that philanthropy, a word we don’t necessarily like to use in Atlanta, but I’d like to somewhat change the narrative on that, especially in our partnership at Valor, our community of courage. Truly, founders are called to problems, and you’ve solved many a problem with software, then solved many a problem with communities like the Atlanta Tech Village, and now parlaying that into, I believe, a new skill set that you will no doubt excel at beyond our wildest dreams—philanthropy. Do you think that’s a natural arc? I know that’s not a word that’s well-beloved by us capitalists. Tell me how you feel about that.
I admit I don’t love the word philanthropy for what we’re doing. I like to think of it really from an entrepreneur-first principles. This is a problem we believe we can solve, and that problem, in this case, might lose lots of money, but solving the problem is something that is worthy of the mission. And so while it might be considered philanthropy, I view it as, you know, when you’re given a lot of opportunities, a lot is expected of you, and so this is a way to make a difference.
I’m really glad one of America’s great leaders is here with us in Atlanta. Lynn?
Lynn:
What can we learn from the BeltLine, though? Because I feel like the BeltLine has created economic value that we didn’t understand development could do. Or am I making that up?
So the BeltLine—and this is getting into the weeds here—has a tax overlay district, so there’s a bunch of rules and regulations for if you’re within a certain number of feet of the BeltLine, and it’s all outlined. It’s all on their website. And so what’s happened is you have to pay in sort of like a self-taxing district, Community Improvement District, or a BeltLine Business Improvement District. A few months ago, the city of Atlanta proper received a AAA credit rating from the rating agencies. And the reason the city, amongst other reasons, but primarily good financial management, is that the city of Atlanta proper had two economic miracles occur in the last 12 years.
Economic miracle number one is outside of our window—$10 billion of new development just in Midtown proper—and then another $10 billion of development on the BeltLine, primarily on the east side trail. So $20 billion of development, not counting all the other stuff that took place in the city limits. So the city coffers are full. The city credit rating is spectacular, and rightfully so. The mayor of Atlanta, his number one priority is affordable housing, and so Invest Atlanta, which is the city’s economic development arm, is working toward that. The actual legal name of Invest Atlanta is the Atlanta Downtown Development Authority.
Fascinating.
So the original, the real name of Invest Atlanta is just doing business as a DBA.
Long story short, tons and tons and tons of money is coming in because of the Midtown property taxes and the BeltLine property taxes, and the city’s Mayor, Mayor Dickens, is funneling that through Invest Atlanta to affordable housing. So it’s actually helping in a big way, but it’s a process that has lots of zigs and zags to it.
We touched on it last night at dinner, those of you who were there, the fact that downtown Atlanta actually has, in addition to things like an unhoused situation, an amazing number of jobs for the number of places to live. What was that set? 20 jobs for every one place to live?
Buckhead and Midtown has roughly two jobs—two office jobs, two retail jobs, two jobs—for every one housing unit. A housing unit would be a condo, an apartment, a single-family home, or a townhome. Downtown Atlanta has 20 jobs. These are jobs at Georgia State, the different government offices, and the businesses. Downtown proper has 20 jobs for every one housing unit in downtown Atlanta.
David, this has really been incredibly enlightening, listening to where you’re putting your attention, your focus, your passion, your entrepreneurial talent. Is there anything else anyone in the room should know about South downtown as a to-do item?
The biggest thing is that we need to continue to chip away at local Atlanta’s view of downtown. Downtown is challenged—downtown between the Gulch, South Downtown, Two Peachtree, Five Points, MARTA, and all the big mega projects that are taking place right now. Our biggest challenge in 24 months is going to be convincing Atlantans to give it another shot. So be thinking of ways to get your fellow Atlantans to go revisit downtown with fresh eyes. That’s going to be our biggest challenge 24 months from now. Right now, we’ve got to get through the construction.
Awesome. Speaking of construction, you have a big opening coming up.
We do! January 8, we are opening our flagship Atlanta Tech Village downtown location. So on the screen, you saw the red brick building with the big windows. We have 31,000 square feet of coworking tech space opening downtown, combined with another 8,000 square feet next door for neighborhood businesses. So two buildings for tech startups and entrepreneurs, and then one dedicated building for Main Street neighborhood entrepreneurs who want to build downtown.
Restaurants, coffee shops, anything! Alright. Well, guys, we have our work cut out for us in Atlanta. We already knew it, but now we have a huge advantage. David Cummings, leadership, thank you very much.
Thanks, Lisa,
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