ATLANTA-One of the most ambitious redevelopments in the city’s modern annals is at first base today after Ponce Park LLC, a consortium of five local development groups, closed on the $6-million purchase of a 6.5-acre site on North Avenue.

The developers also gave the city a $1-million non-refundable deposit on the pending $27-million purchase of the two-million-sf former Sears Roebuck Co. catalog warehouse. The 75% vacant, 77-year-old asset is on Ponce de Leon Avenue near Midtown.

The entire mixed-use redevelopment will cost about $375 million, a Ponce Park representative tells GlobeSt.com. Other sources close to the project previously told GlobeSt.com the venture would cost at least $400 million.

The developers, as GlobeSt.com previously reported, are the Morsberger Group of suburban Lawrenceville, headed by Emory Morsberger; Adams & Co. Real Estate; Lane Investment & Development LLC; Integral Group; and the Atlanta Neighborhood Development Partnership.

Ponce Park LLC expects to start the first phase of the two-phased, seven-year project this summer, converting the acquired land into a public park, condominiums and apartments. Lane Investment is directing Phase One. At the same time, Adams & Co. will be building about 10,000 sf of retail fronting North Avenue.

Phase Two is tentatively scheduled to start in 2008 with the conversion of the three-winged Sears Roebuck structure at 675 Ponce de Leon Ave. The building is scheduled to have 182,610 sf of retail; 154,380 sf of office; and 1,167 lofts, condos, apartments, affordable housing and housing for seniors.

There will also be 40 residential units for persons with physical and developmental disabilities. Shepherd Center and the Jewish Family & Career Services will be working with the disabled residents, a representative for Ponce Park LLC tells GlobeSt.com.

For the city, the deal for the sale of the City Hall East property gets a white elephant off its hands; provides an opportunity for the city to acquire a new mixed-use community; and gives the developers a new arena to generate potential profits, sources in a position to know tell GlobeSt.com.

GlobeSt.com previously reported the city paid $12 million, or $6 per sf, for the City Hall East structure in 1990 after the building sat vacant for 10 years. The $27-million pending sale price of City Hall East equates to $13.50 per sf.

The city has invested about $22 million in renovations and upgrades since its purchase and still owes about $19 million on loans it took out to modernize the 10-story building, as GlobeSt.com previously reported. The city’s debt load is not part of the purchase contract, sources intimate with the deal tell GlobeSt.com.

Current tenants at City Hall East are the Atlanta Police Department, the Atlanta Fire Rescue Department, and the Atlanta Department of Parks, Recreation and Cultural Affairs. The city agencies will eventually move into a new Public Safety Headquarters building Downtown, city staffers tell GlobeSt.com.

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