Land deal could be $120M boon for developers
Backers of affordable housing fight possible sale by Atlanta agency.
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 highend, 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the properties, and pricing was to be determined by a complicated formula weighted toward values that were years out of date.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 saidin 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 hede serves 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 fifiled 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 mil- lion, according tomore 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, thecity’s affordability crisis makes it a bad time to lose control of acres of public land that could beused 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, weshould 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 garnered1,200 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 fifirst 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 effffffffffffort 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 tomake 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 fromthe 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.
Housing agency CEO Catherine Buell, who inherited the deal, said it is bad policy.