A view of apartment homes located in the Village of East Lake complex. AJC FILE PHOTO ( /AJC staff)

Refinancing, renovation of Villages of East Lake to be delayed

The development team behind the Villages of East Lake will have go back to the drawing board for its plan to refinance debt on Atlanta’s landmark mixed-income housing complex after the board of the city’s housing agency declined to hold a meeting to vote on the deal.

The board’s move likely will delay $17 million in renovations the developers and the Atlanta Housing Authority both say are vital for residents of the east Atlanta community.

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Plans to refinance debt and renovate the development, Atlanta’s model for mixed-income housing, have been held in limbo for more than three years despite AHA staff support, the developers have said. AHA CEO Catherine Buell said this week the board has some discomfort with long-running operating deficits and the structure of the proposed deal.

The impasse erupted into public view in recent days, with Lillian Giornelli, the president of the CF Foundation, a partner in the project, sending a pointed letter to the AHA board demanding a special meeting to approve the plan. She also accused the AHA board of moving the goalposts for reaching an acceptable deal.

A deadline passed Wednesday for the Villages to obtain a $5 million federal HOME housing loan managed by the state Department of Community Affairs. That loan required AHA’s board to approve the refinancing plan. Buell told the AJC this week there was no plan to meet.

The developers will have to find a new source of funding to replace that $5 million loan. It could come from the HOME program, though there are no guarantees that the project would obtain a similar loan when funds are made available again starting in July.

But the sides appeared to try to lower the temperature on the dispute late Wednesday.

“It is vitally important to put in place an updated and viable financial structure that will ensure the sustainability of the project for decades to come,” Christopher Edwards, the AHA chairman wrote in a response letter to Giornelli. He called HOME “an important and essential part to overall restructuring, and a new round of HOME funds will be available as early as July.”

“Those few months will provide this board and our partners the time needed to ensure the project is sustainable, and allow the committee to complete its work,” Edwards wrote.

In a statement, Giornelli said, “while AHA did not schedule the meeting we requested, we did receive substantive feedback, which we look forward to discussing and resolving in very short order.”


AJC Business reporter J. Scott Trubey keeps you updated on the latest news about economic development and commercial real estate in metro Atlanta and beyond. You'll find more on myAJC.com, including these stories:

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