DARP, controlled by record producer Dallas Austin, has walked away from a five-month-old deal to buy the property from Miami owner Harold Gelber, City Realty Advisors LLC broker Tim Holdroyd tells GlobeSt.com.

City Realty had an exclusive listing on the property which has an asking price of $5 million, or $56 per sf, about $100 less than today's replacement cost of a class A office building. Holdroyd says DARP had planned for Crow Hospitality to redevelop the historic structure as the Arts Hotel, a 140-room boutique inn. The development cost was projected at $160,000 per room, or a total $22.4 million. Rick Standard of Leo Daly was selected to design the building which currently has two parking garages and 266 surface parking spaces.

The deal's demise surprised Holdroyd, especially because of the increased development and investment activity Downtown. "During the five-month due diligence period, the property had been included in the new west side tax allocation district," the broker says. "The $220-million Atlanta Aquarium has begun construction; the Barry Cos. have announced that they will build the 260,000-sf Southern Co. headquarters building; and Novare has announced that it intends to build over 1,000 condos, all within a few blocks" of the Medical Arts Building.