BeltLine CEO leaving after city audit that angered mayor, factored in failure of region’s transportation sales tax
By David Pendered
BeltLine CEO Brian Leary will leave the organization by the end of the month and COO Lisa Gordon will take over immediately as the BeltLine’s interim leader, Atlanta BeltLine Inc. board president John Somerhalder announced Friday afternoon.
Leary has been under increasing pressure since at least May for expenses made on behalf of the BeltLine. Atlanta City Auditor Leslie Ward released a comprehensive audit in late May that raised major questions about the manner in which BeltLine managers were spending taxpayer dollars – including an executive retreat, staff dinner, and pension benefits that exceed city standards.
Atlanta Mayor Kasim Reed is said to have been outraged by the findings of the audit. Reed reportedly predicted the findings would be used by critics of the proposed transportation sales tax to “prove” that government wastes money. Some critics did just that, as part of their successful campaign to defeat the proposed sales tax.
The BeltLine was to receive almost $600 million from the transportation sales tax. Reed fought hard to get that sum into the budget and keep it there, overcoming critics who contended that the BeltLine should not be in line to receive a tenth of the $6.14 billion that the sales tax was to generate.
Meanwhile, in another sign of the mayor’s sentiment about the findings of the audit, Reed in May quietly approved a major cut in funding he had proposed for the BeltLine’s parent, Invest Atlanta, which is the city’s development arm.
Invest Atlanta, incidentally, was the subject of the main part of the city audit because it oversees the tax allocation districts. The audit determined that a number of management issues should be resolved to tighten the city’s oversight of its primary tool to retool blighted neighborhoods. The BeltLine is the only one of the city’s TADs that has its own staff and board of directors.
Here’s the full statement issued today regarding Leary’s departure:
“Statement from John Somerhalder, Chairman of the Atlanta BeltLine, Inc. Board of Directors on Change in Leadership
“The Atlanta BeltLine remains the single most compelling vision for the future of Atlanta. It came to fruition through deep, broad and passionate grassroots support that brought communities across this city together like never before. That foundation of public support is still the bedrock of the Atlanta BeltLine and remains the single most important element in moving the project forward. The progress we have made with the help of the community and our strong and numerous partners will continue as we realize this powerful vision for the future of our city.
“To continue this great progress, the board has determined that it is in the best interest of the organization to make a change in leadership. Today, the board has unanimously agreed that Brian Leary will transition out of the organization by the end of this month. During that time he will assist the board in its planning efforts to transition to new leadership. Effective immediately, in her role as Chief Operating Officer, Lisa Gordon will lead the organization reporting to the board of directors in an interim capacity. The board will establish a process to search for a new President and CEO.
“The board thanks Brian for his service and all of the accomplishments we have made as a team under his leadership. Since its inception in 2006, Atlanta BeltLine, Inc. has worked under extremely challenging conditions to deliver significant portions of the project. The master plans, parks, trails, affordable housing, public art and foundational studies for transit would not have happened without strong public involvement and the commitment and dedication of an expert staff who believe as strongly in the vision of the project as anyone. Their work and progress will continue.
“Invest Atlanta and Atlanta BeltLine, Inc. have strengthened policies regarding the expenditure of TAD funds that will ensure good stewardship of taxpayer money. As stewards of taxpayer dollars, we must hold ourselves accountable and will not accept anything less than prudent, transparent and efficient use of public funds.
“We celebrate the tremendous progress the Atlanta BeltLine has made and remain committed to moving the Atlanta BeltLine forward as quickly as possible, working with the Mayor, City Council, Invest Atlanta and all of our partners and stakeholders.”
End of statement.
Leary is known most recently for his work with the BeltLine. But it was for his graduate thesis on a redevelopment project that became Atlantic Station that earned Leary’s spurs in the development world.
After Leary was graduated from Georgia Tech, he worked to create Atlantic Station with Jacoby Development and its partners. As developer Jim Jacoby left the scene, Leary became an executive with AIG when the insurance and real estate giant emerged as a major financial backer of Atlantic Station. As AIG collapsed during the recession. Leary left AIG as it was exiting its real estate ventures and quickly was hired to head the Atlanta BeltLine’s implementation program.
In hindsight, Leary’s personality may have been better suited to the private sector world of development than to a high-profile government project that operates in the public eye.
Leary was a charismatic presence when he discussed the BeltLine. But grumbling has risen in some corners of the development community about the creation of a BeltLine staff that seems to duplicate some duties now carried out by other agencies within Atlanta’s city government.
Incidentally, Ryan Gravel, the Georgia Tech graduate student who wrote his thesis on an idea that became the BeltLine, is now working with a private company that’s designing various aspects of the public portions of the BeltLine.
The Atlanta City Council is poised to tighten its control over the BeltLine. That effort is part of the council’s broader intention to rein in Invest Atlanta, the city’s development arm that oversees the city’s primary tool for retooling blighted neighborhoods – the financing instrument known generally as tax allocation districts.
On July 9, just a few weeks after the city’s audit was released and read by councilmembers, proposed regulations were outlined by the chairmen of the council’s Finance Committee and Community Development Committee.
Finance Committee Chair Felicia Moore said the proposals would be on the table when the council returns to work this month, after its summer recess. A final set of regulations are to be enacted by the council by year’s end, Moore said in July.
The measures expected from the Atlanta City Council are to match the five recommendations of the performance audit that reviewed the city’s use of tax allocation districts. TADs enabled construction of such signature projects as Atlantic Station, Georgia Aquarium, projects along the Atlanta BeltLine, and the Center for Civil and Human Rights.
Issues raised by the city audit into the BeltLine stem from a $1.3 million reimbursement request submitted by the BeltLine’s managers in March 2011. The questioned expenses include:
- “$232,749 for staff salaries and benefits, which included pension contributions on previously granted bonuses totaling $26,000 to two employees. Benefits include a 15 percent contribution to employees’ pension accounts, which is considerably more generous than the city’s 6 percent contribution to employees’ defined contribution plan accounts;
- “$59,243 in payments to Invest Atlanta for shared services and allocated staff time;
- “$25,000 for two monthly retainer fees for a lobbyist;
- “$9,835 for credit card charges, travel and miscellaneous expenses, including an executive retreat and staff dinner.”
The audit made five specific recommendations for the council to consider. They are listed on pages 65 and 66 of the 94-page audit.