The Atlantic Steel Co. sits, literally, on the wrong side of Atlanta's tracks, cut off from the city's bustling development to the east by 12 lanes of heavily traveled highway. Its isolation is ironic in a city that owes its very existence to movement - first as a major railroad stop in the 1800s, and now more recently as an important hub for the airlines.

Yet it may be another Atlanta symbol - the Phoenix, rising from its ashes - that motivates a handful of developers who are working to revitalize all 144 acres of the Atlantic Steel site.

"It could be the gateway to Atlanta, finally tying east Midtown to west Midtown," explains Jim Jacoby, chairman of Atlanta-based Jacoby Development Inc. (JDI), which contracted to buy the site in 1997 for $76 million.

The company plans to redevelop the brownfield as a mixed-use project with as much as 7 million sq. ft. of office space, 5,000 residential units, nearly 2,000 hotel rooms and 1.5 million sq. ft. of retail/entertainment space. (The Atlantic Steel Co., which has been manufacturing steel on the property since 1901, is responsible for the remediation of the site, estimated to cost as much as $20 million.)

Jacoby says much of the development, including the residential units and retail space, will be completed within three to four years, but acknowledges a longer timeframe - up to 15 years - before the entire project is completed.

The Mills Corp., Arlington, Va., is developing 1.2 million sq. ft. of the project's retail space with tenants that include Virgin Records and the Rainforest Cafe. Post Properties, an Atlanta-based multifamily housing developer, plans up to 2,400 residential units on the site, and Hines Interests L.P., a Houston-based real estate firm, will develop up to 5 million sq. ft. of office space.

None of which, however, changes the fact that the proposed development remains cut off from Atlanta's thriving Buckhead and Midtown neighborhoods. Only a bridge spanning Interstates 75 and 85, the roads that divide Midtown Atlanta, can correct that problem.

"Connectivity is definitely the linchpin of this deal," admits Charles Brown, president of Atlanta-based CRB Realty Associates and a consultant for JDI on the Atlantic Steel project. "We want to build a bridge that connects the east and west sides of the freeway, and we're suggesting that it not only have vehicular access but also do it in the form of a linear park so pedestrians and cyclists can use it." Brown estimates the cost of the bridge, which would be funded by state, federal and private funds, to be between $15 million and $25 million.

But building a bridge in Atlanta, a city that violates the Clean Air Act and has no formal plan to correct the problem, isn't as simple as it seems.

"Beginning this year, all new highway projects, even those that had already been approved, could not proceed because of Atlanta's conformity lapse with air quality standards," explains Jim Kutzman, Environmental Protection Agency deputy director for the Air Management Division, Region 4.

Kutzman is reviewing JDI's proposal to determine whether the Atlantic Steel project qualifies for an exemption to the current ban on highway construction. In order to qualify for an exemption, Kutzman says, the project must de monstrate some superior environmental benefits to the community. "In their favor, Jacoby's going to be cleaning up a brownfield and, being that it's also an in-fill project, it's an efficient use of space," he notes. "On the downside, there's the possibility of increased traffic."

Although Kutzman says it's too early to predict which way the decision will go, he anticipates a final announcement by May 1999.

Even if the EPA grants Jacoby an exemption, called a traffic control measure, there's still another hurdle to clear.

As part of its proposal, Jacoby not only wants to build a bridge that spans I-75/85, locally known as the Downtown Connector, the company also wants to build access ramps to the interstate on both sides of the bridge. Ramp construction happens to be the domain of another regulatory agency, the Federal Highway Administration, which must determine what kind of impact the project would have on area traffic.

"It's a good project but there are a lot of unanswered questions," says Faye DiMassimo, assistant division administrator for the Federal Highway Administration. "We're estimating two years for a final decision, assuming things go reasonably well."

Both Kutzman and DiMassimo say the decision process is far from finished, but add that neither of the agencies they work for would be involved with the project unless they thought it had a chance of succeeding.

"I can't sit here and say everything's OK, but we think the project is worthwhile," Kutzman adds.

If JDI does get all the approvals it needs to proceed, the project could dramatically alter Atlanta's landscape. A host of powerful private and political groups are working to help ensure that it does.

Atlanta Mayor Bill Campbell calls the Atlantic Steel project the city's "most important development in the past 50 years." He is meeting with U.S. Transportation Secretary Rodney Slater to discuss the development and the projected 20,000 jobs it could bring to the city.

Neighboring groups on Atlanta's westside, including Georgia Technical Institute and Coca-Cola, also want in on the action. They are discussing the idea of building a light rail system to connect the Atlantic Steel project with their own facilities, as well as Centennial Olympic Park and The Georgia World Congress Center.

The Atlantic Steel project is JDI's first foray into mixed-use development, much less urban renewal and highway construction. The company is known more for building "Power Centers," large retail projects with anchor tenants such as Wal-Mart, than for developing in-fill sites or restoring brownfield areas.

But under Jim Jacoby's leadership - he is an environmentalist whose work restoring estuaries in his home state of Florida is well chronicled - the company is going to continue developing environmentally damaged areas and in-fill sites. Jacoby is currently considering redeveloping former military bases in California.

"This isn't a one-time deal for us," he adds. "An opportunity to do a mixed-use project like Atlantic Steel isn't something that's necessarily a give-back to the community, but it is a win-win for the environment and the economy."