The Atlanta Journal-Constitution
Darlington renovation stuck in legal tussle
Consultant said he’s owed $700,000 by the developer.
A 1950s-era apartment tower in South Buckhead once known for its affordable units is the center of a legal squabble that has slowed the site’s redevelopment.
Ironically, the disagreement involves payment for consulting work to lower the number of affordable condos in the building’s multimillion-dollar renovation.
Atlanta developer Varden Capital Properties is converting The Darlington on Peachtree Road into 276 “affordable luxury” condo units priced between $300,000 and $500,000. Marketed under the building’s new name The Lofts @
Twenty25, the first units are expected to be ready this fall.
Before Varden’s $30 million acquisition of the building in 2016, The Darlington contained one of the largest collections of affordable apartments in pricey Buckhead, though it had fallen into disrepair. Land-use restrictions on the property required it to have 214 affordable housing units, of which 122 were to be rented to very low income tenants. In return, the owner received tax credits.
Varden hired consultant William C. Butler for advice on reducing the number of affordable units, according to a lawsuit Butler filed in Fulton County Superior Court. Varden has not paid Butler for that work or for work he did to secure a higher price on an adjacent lot the company sold, the lawsuit claims.
Varden CEO Trace McCreary declined to comment. His attorney, John Christy, did not respond to a request for comment.
Butler’s suit says his work cut in half the required number of units for very low income tenants to 61. That allowed Varden to add more luxury apartments, boosting the building’s value.
“Butler’s efforts increased the value of the property by millions of dollars,” his attorney Cary Ichter said.
The suit also claims Butler advised Varden to raise its $5 million to $6 million price for an adjacent parcel it was selling to $9 million. The lot sold for the higher price. Gipson Co. plans to develop a 75,000-squarefoot medical office building on the site.
Varden owes Butler $700,000 for his work, the suit says.
Varden’s response to the suit says it never had an agreement with Butler. And it would be legally forbidden from paying him since he’s not a licensed real estate broker and such a payment would be a real estate commission. Butler lost his state license after a 2010 felony conviction, according to the lawsuit.
Ichter acknowledged that Butler lost his real estate license after “he had some legal issues arising out of a family dispute.” But he’s actively trying to regain certification, he said.
Ichter said Butler did not provide real estate brokerage services to Varden in either instance but offered informal advice.
Butler did not respond to a request for comment.
Varden has asked Fulton County Superior Court Judge Jane Barwick to remove a notice that Butler placed on the building’s title warning the public of a pending lawsuit. Varden says the title notice is preventing it from closing a loan with Ameris Bank for work on the property. Barwick had not issued a ruling as of Wednesday afternoon.