Stadium deal: Clock ticks as city, neighborhoods deal on jobs, public safety, other community benefits

By David Pendered

To get a sense of the complexity of providing assistance to neighborhoods near the future Falcons stadium, consider the case of just one house built under a benefits program created when the Georgia Dome was built.

Atlanta city officials and neighborhood advocates are negotiating a community benefits deal to address blight and other woes near the future Falcons stadium. Credit: Kristian Weatherspoon via marketplace.org

Atlanta city officials and neighborhood advocates are negotiating a community benefits deal to address joblessness, blight and other woes near the future Falcons stadium. Credit: Kristian Weatherspoon via marketplace.org

The house at 221 Maple St. was built with a $79,000 construction loan from the $8 million Vine City Trust Fund. Vine City Housing Ministry, Inc. sold the house in 2002 for $118,000. Today the house is valued by Fulton County at $28,900 and the trust fund is owed just over $59,000 of the $76,100 in mortgage financing it provided the buyer, according to records of Invest Atlanta and Fulton County’s tax assessor.

Multiply this type of dynamic across multiple issues – job creation, environmental mitigation, public health and safety, historic preservation, and green space – and the task of finalizing a community benefits deal in the next four weeks of September takes on a whole new perspective.

The time seems ripe to pull back and review some of the components of the community benefits deal being discussed.

The legislation passed by the Atlanta City Council in March, to provide $200 million in construction financing for a new retractable roof stadium, requires that the bonds be sold only after the council approves a community benefits deal. The city has had similar programs in place at least as far back as the 1996 Summer Olympic Games. Atlanta included such provisions when the council approved the use of property taxes to incentivize construction along the Atlanta BeltLine.

The stadium bonds are to be repaid by Dec. 31, 2050. The bond market has been volatile this year, with investors demanding higher returns as maturity dates extend to 15, 20, and 30 years, according to an Aug. 8 report by Morgan Stanley Wealth Management. The longer terms required yields of almost a half a percent higher than 10 year bonds, according to the report.

The community benefits deal is to address four neighborhoods near the future stadium. Click on the map for a larger version. Credit: Invest Atlanta

The community benefits deal is to address four neighborhoods near the future stadium. Click on the map for a larger version. Credit: Invest Atlanta

Five public meetings on the stadium’s community benefits deal have been conducted, and two more are scheduled before the deal is finalized. The next meeting, on Wednesday, is scheduled to last 90 minutes and the other is planned for Sept. 18. All previous meetings have been scheduled for 90 minutes.

Invest Atlanta has produced a calendar that calls for the community benefits deal to be finalized on Oct. 2. The timeline Invest Atlanta unveiled July 2 envisioned the deal being put before the city council in late October. Proceeds of the bond were to be available in early 2014, suggesting the plan was to sell some or all of the bonds in late 2013.

The community benefits deal has two stated goals and one that is understood:

  • Shape the list of projects to be funded with $15 million in city property taxes collected through the Westside Tax Allocation District. The board of Invest Atlanta has the final say over the selection and timing of projects to be funded;
  • “Inform” the list of projects to be funded by $15 million allocated by the Neighborhood Prosperity Fund (the Blank Foundation). The board of the Blank Foundation has final say over the timing and selection of projects.

The unstated objective that’s outlined in the Invest Atlanta presentation is to provide information about challenges and opportunities related to the new retractable roof stadium. This information is intended for four departments – planning and community development, police, public works, and watershed management – and Invest Atlanta, which is the city’s development arm.

Future apprentices in construction trades hope to land jobs related to the construction of a new Falcons stadium. The pre-apprentices in the program offered by Georgia Trade-Up include Tyeshia Foster (left to right); Lisa Brooks; Jacquelyn Treadville-Sanders (class president); Leslee Shepherd (class coordinator); Janell Carter; Joanne Barker; Chamena Johnson (class secretary). Credit: David Pendered

Future apprentices in construction trades hope to land jobs related to the construction of a new Falcons stadium. The pre-apprentices in the program offered by Georgia Trade-Up include Tyeshia Foster (left to right); Lisa Brooks; Jacquelyn Treadville-Sanders (class president); Leslee Shepherd (class coordinator); Janell Carter; Joanne Barker; Chamena Johnson (class secretary). Credit: David Pendered

The committee that’s guiding recommendations for $30 million in investments related to the stadium has 16 members. Eight of the members are from the executive, legislative or administrative branches of Atlanta City Hall or Invest Atlanta:

  • Mayor Kasim Reed’s representative;
  • Invest Atlanta’s representative. The mayor chairs the board of Invest Atlanta;
  • City council President Ceasar Mitchell;
  • Four city council members;
  • The city planning department’s representative;
  • Two representatives of NPUs (neighborhood planning units L and M);
  • Representative of Vine City Civic Association;
  • Representative of the advisory board of the Westside Tax Allocation District;
  • Representative of each of the four stadium neighborhoods (downtown, Marietta artery, English Avenue, Castleberry Hill).

The process of crafting a deal has been hobbled by uncertainty over where the stadium will be built. Until the site has been determined, any decisions seemed premature regarding the type and extent of relief to be provided the four neighborhoods, Mitchell said when he presided over the Aug. 7 meeting. The initial deadline for site selection was  Aug. 1, but the deadline has become flexible as negotiations have continued with two churches in the way of the south site.

Councilperson Michael Julian Bond has emerged as the committee chair. Bond is unopposed in his reelection bid this autumn. Reed contributed $2,500 to Bond’s reelection campaign fund, according to the mayor’s campaign disclosure report received July 6 by the state.

The $8 million Georgia Dome Trust Fund that helped build and finance the house on Maple Street has been a hot topic among some community advocates who have attended the committee meetings. Following requests for an accounting of the money, Invest Atlanta released a report that shows the fund that was created in 1989 and funded with proceeds of a bond sale has produced the following direct results:

  • Funded $8 million in projects;
  • Constructed 21 houses;
  • Provided 47 single family mortgage loans;
  • Financed construction of two apartments developments with a total of 309 units.

Invest Atlanta reported that the total results include:

  • $54.4 million leveraged;
  • $15.8 million expended;
  • 815 units produced;
  • 119 loans to homeowners;
  • Twenty loans to developers.

 

About David Pendered

David Pendered, Managing Editor, is an Atlanta journalist with nearly 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.
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3 comments
Wishing for Milton County
Wishing for Milton County

Is that all of the "REPORT".  This is a summary not a report.  Who were the developers?  Did they pay back the 20 loans.

What is the deliquency rate on all loans? Where were the houses built and for whom?  Who owned the land the houses sit on?

Same for the apartments?

Was this info reported.  Or did you just take this "report" as gospel.

This is the kind of information needed to see if the funds were truly used for the "communities" benefit or to benefit a few political cronies (which has happened to often).

There are way to many of these "funds" and quasi governmental non profits for the ordinary citizen to keep track of.  These are the funds that politicians love to "manage" and where the true corruption lies.

If you can, please show the information above!

Greg Hawthorne
Greg Hawthorne

David,

In your article today you mentioned my organization, Vine City Housing Ministry (nka Vine City Health and Housing Ministry), and a house we developed at 221 Maple.  I agree with the overarching proposition in your article that there should be more thought and time put into crafting the community benefits plan/agreement, but I am concerned that the use of a summary description of what was a complex lease/purchase transaction may be construed negatively against Vine City Health and Housing Ministry. 

David, I think you used that particular deal as an example of how some outcomes are difficult to anticipate, and to show why there should be more considered thought as we prepare to memorialize the current set of community benefits.  I believe, and sincerely hope, you did not intend to portray that transaction as an example of some kind of mismanagement of funds by our community-based organizations, because that would simply not be true.  And based upon your reply to my private message earlier, I am glad to know with certainty that such a negative portrayal was not your intent.

Some facts I want to weave into the record to properly portray this particular transaction are:

  • This was a lease-purchase transaction with a well deserving low income family with children that already had a longstanding stake in the community, and desired to increase their stake by becoming homeowners.
  • This transaction upon completion of construction was almost entirely managed by the professional asset management team at Urban Residential Finance Authority for the City of Atlanta.
  • The extraordinary measures to approve the family’s purchase, including a lease period of about 4 years, is unprecedented with this type of transaction.
  • At the closing we granted back to the family 100% of its rent payments ($21,678.74) to be used towards the purchase of the home, an exrtraordinary measure unprecedented with lease-purchase transactions.
  • Affordable homeownership development is complex, requiring layers of subsidies to accommodate low income families.
  • Managing a low-income buyer's income and credit issues are what typically make this type of homeownership transaction especially difficult.
  • The final sale of this unit included the use of three (3) different lending facilities in addition to the granted rent payments.
  • The Vine City community has had a longstanding goal for over 20 years to increase the level of homeownership to combat the very low percentage (10-12%) of owner-occupied housing.
  • Single family housing development in these types of communities using market forces alone will certainly cause the gentrification of the indigenous population.
  • Assuring affordable homeownership opportunities in this community is critical to creating a sustainable and vibrant mixed income neighborhood.
  • The property valuation problem brought out in this example should only be considered in light of the depressed real estate values caused by the greatest real estate depression in the history of the world that occurred in 2008-09.


David, we believe it is appropriate to attempt to create an ownership stake in the real property in this community for current residents and other true stakeholders.  It would be unjust if those who have pushed and struggled through the years of hard times working to make our community great are not able to participate in the upside of the struggle and enjoy what they’ve worked so hard to accomplish simply because they’ve been gentrified.  We look forward to being a part of creating additional opportunities for real property ownership and other long term benefits.

Greg Hawthorne, Executive Director

Vine City Health and Housing Ministry Inc.

Gil
Gil

Though there is a process and a time line for the City, the Developers and the Communities representatives  the missing piece is the most important needed resource: TIME and ORGANIZING. Though ADP strategic planning implementation recommendations indicates worthy directions to go for redevelopment and leveraging the New Stadium opportunities, we are far from having the input of those who are not at the table of this 'high level' process: seniors, poor people and youth. A pre-development resource allocation with a community coordinator (hired to reach out and engage these citizens) is needed. The CBA should indicate the guidelines, principles of these benefits, establish the process to authorize the investments and provide the control mechanism for implementation of these resources. Invest Atlanta and the Blank Foundation should consult with this pre-development team  to establish common guidelines ( not separately designed) so that the criteria and the outcome will be in sync with the communities. Their respective Boards do not necessarily received the bottom up  input needed to make this opportunity a breakthrough success for the City and The Falcons to show real care for the surroundings.