Thomas Wheatley, Creative Loafing – Published 07.30.08
Before the Beltline can unite and connect Atlanta, it first has to experience Atlanta’s tale of two cities.
Visit a study group north of I-20, say near Buckhead and Tanyard Creek, and residents fume about bike-trail paths. Venture down to Metropolitan Parkway and in southwest Atlanta, and you hear pleas for economic development, jobs and, most importantly, attention.
Which is why last week’s decision by Beltline leaders to spend almost half of the $98 million in initial bond proceeds to pay for a sliver of land in northeast Atlanta has many concerned that all the benefits of the Beltline are going to be felt north of I-20.
Even the advisory committee formed to oversee Atlanta Beltline Inc. is critical of the decision.
“Based on our assessment of what the Beltline wants to do, there is no equitability in the allocation of those dollars when you’re going to use 80 percent of it in the northeast quadrant,” says Eugene Bowens, chairman of Tax Allocation District Advisory Committee.
At issue is a 4.5-mile stretch of land owned by Gwinnett County developer Wayne Mason and his son, Keith. The Masons purchased the land near Monroe Drive and Piedmont Road for $26.5 million in 2004, and announced plans to build two high-rise towers. The Masons also promised to donate their railroad right-of-way to the Beltline project.
But opposition from the neighborhood led the city to reject the Mason plan. The Masons, in turn, accused the city of refusing to negotiate a compromise that would have made both sides happy. In the end, the Masons walked away from the deal, taking a vital piece of the Beltline with them.
They later worked out an agreement for Atlanta Beltline Inc. – the nonprofit group in charge of coordinating and planning the massive project – to purchase the property for $66 million, nearly a 200 percent profit.
The Beltline group made an initial $21 million payment to the Masons, and the rest of the note is due Oct. 31.
Terri Montague, CEO of Atlanta Beltline Inc., says the nonprofit has no choice but to use $45 million of the money received from the Tax Allocation District created for the Beltline to complete the sale. The Beltline group has to snag at least two of the four right-of-way segments to be eligible for sorely needed federal funding. Currently, it holds the title to only one.
Before the deal can be completed, it has to go before Atlanta City Council. Councilwoman Mary Norwood says she’s disappointed the Masons won’t restructure the deal for a longer term. The advisory committee overseeing the Beltline made the same recommendation.
“I’m hopeful that between now and the time the closing happens, the Masons will decide they won’t need to have all their money in 2008,” Norwood, who is a candidate for mayor, says. “When you look at everything from the Olympics to Grady Hospital, people make decisions all the time that help the greater good of the city and the region.”
Montague says the Beltline partnership tried unsuccessfully to convince the Masons to give them more flexibility.
“In March and April, ABI repeatedly requested to restructure or defer Northeast [corridor] loan payments and the Masons declined to do that unless ABI put up a $45 million line of credit” as collateral, Montague said through a Beltline representative.
Jane Langley, a spokeswoman for the Masons, denies Montague’s statement, saying they never received a formal request to restructure the deal. She declined to say whether the Masons would agree to renegotiate. “I’m not going to speculate on that,” Langley says. “The joint venture has honored all their obligations to date and we expect them to do so.”
The larger issue, according to the Beltline advisory committee, was the Beltline’s decision to purchase the entire Mason property rather than just the railroad easements. They argue that it was an unwise business decision in today’s real estate market.
Bowens also says the Beltline partnership excluded his group from the decision-making process even though it is required by law to seek the advisory committee’s input on the spending of any TAD money.
“We did not have the opportunity to make recommendations in that regard,” he says. “We found out about it after the fact, and that’s not the way that’s supposed to happen. If we are going to be advisers, then call upon us. Give us the opportunity to advise you.”
A Beltline representative says the group was briefed prior to the negotiations.
At this point, Montague says, the Beltline is in a damned-if-you-do and damned-if-you-don’t situation.
If it doesn’t follow through and purchase the Mason property now, it would go into foreclosure; the Beltline has already paid $26 million, plus monthly $450,000 interest payments since March.
And a foreclosure would only complicate the situation, forcing the city to condemn the property to obtain the right-of-way. “We’d be looking at two to three years of litigation that every attorney we’ve consulted has said we’d lose,” Montague says.
City Council is expected to vote on the allocations of Beltline TAD funds in late August. The council will also vote on an affordable-housing board’s list of recommendations as to what type of strategies should be used along the 22-mile project – a Beltline component that is required by law – at that time as well.
These difficult decisions are all thanks to a Georgia Supreme Court decision in February that ruled the state’s process for TADs is unconstitutional. It didn’t affect the money already received by the Beltline and other TAD projects. But to obtain additional funding, voters statewide must approve a referendum in November.
If not, Montague says, the Beltline will have to find other ways to be built, such as ramping up efforts for private contribution or even extending the lifespan of the original TAD.
And in doing so, the timeline of the project would slow to a crawl.
Norwood thinks appealing to the philanthropic side of the Masons could be the key. “At the end of the day, this is not about the city government,” she says. “This is one of the biggest urban greenspace developments in the country. It’s become larger than ‘we’re annoyed with the way the city government treated us.'”
From Native New Yorker (Brooklyn) to Atlanta Realtor, with a love for architecture and design. Atlanta based Real Estate Consultant working to restore and sell Intown Homes; REO,South West (Westside,West End, Westview Communities 30310,30311,30314,30318 zip codes)
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