Developer’s $4.2M tax break scrutinized

Senior living complex’s units for those with low income rent for $3,200.

The deal was a sweet one: For building a large, upscale senior living community in DeKalb County, the Alpharetta-based developers would receive $4.2 million in estimated property tax breaks.

In exchange for the incentives, the Holbrook of Decatur agreed to set aside 10% of its units for “affordable housing,” with strict limits designed to help low-income residents.

But more than two years after that 2017 agreement, the Holbrook, which opened earlier this year, is charging a monthly rate of $3,200 for its least expensive units, The Atlanta Journal-Constitution has learned.

“I’m a DeKalb taxpayer ... they’re getting this million dollars-plus tax break for affordable housing, but they’re charging $3,000,” said Andrew Dubyak, a resident who encountered the issue firsthand while looking for an apartment for his mother-inlaw. “It’s something that most people would probably want to know: Their tax dollars are not really going where they should be.”

The tax incentives were granted by Decide DeKalb, the county’s economic development author

ity. After learning of the Holbrook’s rates from Dubyak, the agency said it planned to do an internal review of its processes “to see where improvements could be made to strengthen contractual requirements,” Decide DeKalb said in a statement to the AJC. It also created a committee to address policies for future affordable housing incentives, officials said.

Alfred Holbrook, the chairman of the development company behind the project, Solomon Development Services, defended the $3,200 monthly rate and provided no indication that the Holbrook would lower the rent.

What is affordable?

The tax breaks Decide DeKalb granted in 2017 will save Solomon Development Services about 36% on its property taxes over the next 10 years, the AJC reported at the time. That incentive allows the developer to keep tax money that would otherwise go to the county government and school system.

In the lease, the county was specific about its affordable housing provision: 5% of the 200 units had to be set aside for seniors with an annual income of $16,675 or less, and another 5% for residents who make $28,971 or less. Those numbers were calculated based on DeKalb’s mean Social Security

income and the average per capita income.

The agreement didn’t specify what rents the Holbrook had to charge for those 20 affordable units.

A $77 million project, the complex is a luxurious new building facing Clairmont Road near North Druid Hills Road. The five-story facility opened this spring, advertising upscale residences and amenities for active seniors.

Dubyak and his wife moved to DeKalb from York, Pennsylvania, about two years ago, and he hopes his mother-in-law, 66, will soon be able to join them in the Decatur area. Her only income comes from Social Security benefits, he said, which would qualify her for the low-income units.

Earlier this year, Dubyak set out to look for independent senior living facilities in DeKalb with affordable housing options and came across the AJC article from 2017.

When Dubyak reached out to the Holbrook, he said, representatives told him the monthly rate for a studio was $3,200, which would come out to $38,400 a year. They said that was “considered the affordable option,” according to Dubyak, 35.

“I went to Decide DeKalb and said, ‘How is this possible?’” he said.

Decide DeKalb contacted the developer to get more information. The agency said in its statement that Holbrook management had said

“rates for certain units will be reduced to assist with affordability.”

But when asked by the AJC in October, Alfred Holbrook stood by the $3,200 rate, writing in an email that it “includes much more than the real estate component” of the monthly fee. He mentioned that it covers utilities, a $900 monthly meal allowance, maintenance and security. He also pointed out other activities and services available in the facility, such as a pool, a spa, fitness classes, hydrotherapy and preventative medicine. He said the company intends to honor its agreement with Decide DeKalb but declined to elaborate on how low-income residents will be expected to pay for rates that would be higher than their income.

The Holbrook also did not say what other units in the building cost.

Luxury apartment developments for active seniors have become common across metro Atlanta, and costs to live in one can be expensive. In metro Atlanta, the cost for independent senior living can run as high as $4,100 per month, according to the latest data from A Place for Mom, a senior living referral service. But the median monthly cost in the Atlanta area, the data shows, is $2,400, lower than the Holbrook’s rate.

Dubyak, meanwhile, is continuing to look for an affordable home for his mother-inlaw, who is still in Pennsylvania. He’s expanded his search beyond the Decatur area and is now looking in other communities around DeKalb.

Progress reports

Developers of the Holbrook will be required to submit reports to Decide DeKalb to show they are in compliance with the affordable housing agreement. The first reports are due by early 2021, the agency said.

After accounting for the tax incentive, the Holbrook will still pay $7.5 million in property taxes over the next decade, according to a fiscal analysis by Decide DeKalb.

If the Holbrook does not rent to the required percentage of low-income residents, the company risks losing the property tax incentive, Decide DeKalb said.

The agency’s board members are appointed by the county’s commissioners and approve tax breaks independent of the County Commission. Allen Mitchell, DeKalb’s community development director, said it’s crucial that agencies like Decide DeKalb check to make sure the agreements are being followed. “You have to really monitor to make sure they are not going over the limits of what we view as being affordable,” said Mitchell, whose department was not involved in the deal. “There needs to be more follow-up to ensure the commitments are being adhered to.”