Atlanta housing agency: $120M windfall for developer in disputed deal

A controversial deal to require the city’s low-income housing authority to sell prime parcels of vacant land to a developer would hand them over at a $120 million discount, according to estimates obtained by The Atlanta Journal-Constitution.

If the sale goes through, it could amount to a king-sized subsidy towards the construction of high-end, market-rate homes, and harm the city’s efforts to create more affordable housing, public housing officials and affordable housing advocates said. Atlanta Housing Authority would give up control of one third of its vacant land, or about 100 acres, according to agency estimates, and there is no requirement that affordable housing be built on it.

The 2011 deal between the AHA and Integral Group came under scrutiny in March after the AJC raised questions about its terms. The deal gave Integral several years to exercise options to purchase the properties, and pricing was to be determined by a complicated formula weighted toward values that were years out of date.

Integral Chairman and CEO Egbert Perry told the AJC previously that he intended to sell homes he builds on the land at market prices.

AHA CEO Catherine Buell, who inherited the option deal with Integral, said moving forward with it would be bad housing policy for the city.

“Affordable housing is disappearing at alarming rates, and allowing a private developer to purchase our land to build condos for the wealthy exacerbates the housing crisis and pushes low-income residents even further to the margins of our city,” Buell said in a statement to the AJC.

Integral spokeswoman Shauna Grovell said in a written statement that she could not say whether AHA’s estimate is valid.

“Without a formal appraisal, frankly, no one can be certain of those values,” Grovell said.

Expert’s analysis: land worth $138 million

Perry previously argued that he deserves the discount because the properties were worth nothing until he and AHA redeveloped nearby parcels with mixed-income apartments. He informed AHA of Integral’s intention to exercise its options late last year.

Under Buell’s leadership, AHA filed suit in August asking a judge to kill the series of complicated contracts, which were signed as then-agency head Renee Glover faced pressure to leave her post. AHA would retain partial ownership of the properties, but Integral would have control over their development.

“The Atlanta Housing Authority is not a land bank for private developers to purchase land at rock-bottom prices,” Buell told the AJC.

An expert hired by AHA gave a September estimate for the land’s value at $138 million, according to more than two dozen pages of records obtained by the AJC that detail the calculations and methodology.

Integral Properties would purchase the parcels for about $17.5 million, the records state.

Whether or not AHA’s price estimate is accurate, the city’s affordability crisis makes it a bad time to lose control of acres of public land that could be used for homes, said housing expert Dan Immergluck, a Georgia State University professor.

“On its face, it’s concerning,” Immergluck said of the estimates. “Where there is room for housing, we should be building affordable housing, that’s for sure.”

The deal has sparked outrage among local affordable housing advocates with the Housing Justice League. The league’s members protested outside a speaking engagement by Perry on affordable housing at the Center for Civil and Human Rights in September. They also launched a petition drive that garnered 1,200 signatures and demanded that the developer immediately stop the deal.

“I am horrified,” said organizer Tim Franzen. “We’re not in a crisis of resources. We’re in a crisis of moral authority. This deal shows us this.”

Optioned parcels in hot neighborhoods

The deal now under dispute arranged for AHA to hold the property at the former Carver, Capitol, Grady, and Harris homes tax-free as Integral decided whether to purchase it. The terms specified that sales prices would be based in part on much lower property values that date to when Integral and the AHA first built mixed-income housing on these sites in the late 1990s and 2000s.

AHA demolished nearly all of its public housing projects during those years as part of its nationally recognized, two-decade effort to replace low-income housing through the federal HOPE VI program. It encouraged public housing authorities to form partnerships with private developers to build mixed-income housing.

AHA board members who served at the time of the deal told the AJC that they did not approve the options, and there is no evidence in U.S. Housing and Urban Development documents obtained by the AJC through a Freedom of Information Act request of a 2011 approval.

The September pricing estimates, made by a real estate expert hired by the authority, are not formal appraisals. Instead, the analysis uses historical sales records, holding costs and other data to make complicated calculations of sales prices for more than 100 authority parcels scattered across the city.

These plots include some of AHA’s most coveted properties. Some are located blocks from the Old Fourth Ward’s popular bars and restaurants. Others are near the former Turner Field, which is slated for redevelopment, or along to the southern leg of the massive Beltline project, where prices are expected to skyrocket.

Land values have climbed since the early 2000s at all of the sites involved in the options deal. At the former Grady and Capitol sites they have nearly doubled, the March AJC investigation found.

Perry said previously that he might be open to building affordable housing, but argued that there is already too much of it at these sites.

Reader Comments ...

Next Up in Local

Cool start before weekend warmup
Cool start before weekend warmup

Today: Mostly cloudy. High: 47 Tonight: Clear. Low: 39 Tomorrow: Mostly sunny. High: 54 It’s cold again. “Our wind chill in Atlanta makes it feel like it’s freezing,” Channel 2 meteorologist Karen Minton said early Friday. “So you need to bundle up.” Currently, the temperature is 43 degrees. ...
Georgia Democrats target net neutrality decision
Georgia Democrats target net neutrality decision

Demonstrators rally in support of net neutrality. AP Photo Georgia Senate Democrats introduced a measure Friday to require that Internet service providers operating in Georgia maintain existing traffic levels, an effort to counter a federal vote that could reshape how broadband companies control online access. The measure, sponsored by...
Family awarded $48 million in lawsuit over child's torture death
Family awarded $48 million in lawsuit over child's torture death

A jury awarded $48 million to the family of an 8-year-old girl who was tortured and killed in 2013 in a negligence lawsuit filed against the doctor who treated her, The Chicago Tribune reported. Jurors deliberated for two hours Wednesday before finding that child-abuse pediatrician Norell Rosado was medically negligent in his treatment of...
Police use Taser on Florida middle school student
Police use Taser on Florida middle school student

A school resource officer in Florida used a Taser on a middle school student while trying to break up a fight between her and another female student on Thursday, The Tampa Bay Times reported. The fight occurred after school in the bus circle at Morgan Fitzgerald Middle School, the Pinellas Park Police Department said. The officer tried to break...
Uber driver charged in rape of 16-year-old girl
Uber driver charged in rape of 16-year-old girl

An Uber driver in Georgia was arrested Thursday after a 16-year-old girl said she was raped in suburban Atlanta, police said. Abdoulie Jagne, 58, of College Park, was identified as the man police said allegedly raped a girl in the Gwinnett County city of Norcross, Gwinnett police spokeswoman Cpl. Michele Pihera said.  Uber officials said Jagne...
More Stories