So every good story only takes place in Chicago, NYC, or Boston?
I'm not trying to be a rah-rah cheerleader for my hometown (I'm not that type), but I think Atlanta was a decent town in which to shoot a movie - even back then. If nothing else, it was a nice change-of-pace from the overused NYC, and the much-used Chicago and Boston.
Not every movie has to take place in some huge urban metropolis. I wouldn't have had any complaints, for example - if this movie or a similar movie had been shot in Portland, Oregon - or Denver, Colorado. "Purple Rain" was shot in the Minneapolis area in 1984 - any complaints about that?
It can be fun to look at a movie like Sharky's Machine and compare 1981 Atlanta to the current version. For example - at the very beginning of the movie, there is an aerial shot of Atlanta that includes the future CNN Center and the Omni. Just beyond those buildings is a gritty-looking industrial area (with railroad tracks and underpasses). If you panned over that exact same area today, you would see Philips Arena in the Omni's place - and the Georgia Dome and "Building C" of the Georgia World Congress Center in place of that run-down industrial area.
Btw - if by mentioning the Goodwill Games you are implying that the Goodwill Games were held in Atlanta - then you are mistaken. The Goodwill Games were never in Atlanta - IIRC, the only U.S. host cities of the Goodwill Games were Seattle and N.Y.C.. Perhaps you meant the Olympic Games?
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