Brookhaven and MARTA deal for new City Hall to revive transit-oriented redevelopment

By John Ruch

Brookhaven aims to build a new City Hall on a prime MARTA station lot in a quietly planned lease agreement intended to revive long-stalled and controversial plans for transit-oriented redevelopment.

The deal gives Brookhaven a 50-year lease — with an option to buy for $10 after that — on a 1.24-acre parking lot at the Brookhaven/Oglethorpe MARTA Station at 4047 Peachtree Road. That’s about three-quarters of a mile south of the current City Hall at 4362 Peachtree, which is rented space in an office building slated for redevelopment.

The MARTA station and its sprawling parking lots have been the target of transit-oriented redevelopment (TOD) concepts and debates for at least 15 years, even before the young city’s incorporation in 2012. A detailed plan that included a new City Hall as an anchor progressed until 2017 when the City abruptly derailed it and MARTA and private developers withdrew. Community pushback over density and City grumbling about a lack of a unique designs were among the factors.

The City is now finalizing a “City Centre Master Plan” of visions for redeveloping the station area as well as other nearby commercial properties. The draft includes a new City Hall at another Peachtree Road location, Brookhaven Park, though some public comments supported the station site. The privately negotiated station lease, approved by the MARTA board on June 9 and the Brookhaven City Council on June 14, trumps that and essentially relaunches the station redevelopment effort.

MARTA spokesperson Stephany Fisher said the transit agency has continued discussing the redevelopment with the City since the problems in 2017.

“Over the past five years, representatives from MARTA and Brookhaven have had informal discussions on upgrading the Brookhaven/Oglethorpe site to better meet the transit needs of the region while partnering with the local municipality to address the growth and mobility of the area,” Fisher said. “This collaborative effort [on a City Hall lease] allows both parties to move forward.”

Mayor John Ernst echoed that in a MARTA press release, which was paired with a City press release using similar or identical language about the project rationales. “This is the result of a collaboration with MARTA which has been ongoing for five years,” said Ernst in the press release. “We were all seeking a transit-friendly live-work-play solution that meets the current and future lifestyle needs of residents and our greater regional community. I am looking forward to continuing the partnership with MARTA as we create a permanent City Hall.”

According to MARTA, the lease agreement was privately negotiated with the City represented by Shirlynn Fortson, the director of economic development, and Steve Labovitz, an outside attorney with the powerhouse firm Dentons whose prior work includes the deals for Atlanta’s State Farm Arena and Mercedes-Benz Stadium. The lease is expected to be signed next week, according to MARTA.

Word of the City Hall lease came first from the MARTA board’s June 9 approval of a resolution authorizing it. At the time, MARTA would not reveal details of the agreement prior to the City Council’s vote, which followed on June 14. The City also did not respond to questions at that time.

Asked why MARTA chose to lease the land — a particularly choice parcel fronting on Peachtree — without a public procurement process, Fisher cited only the transit agency’s legal ability to cut private deals directly with a government.

A related issue is how MARTA determined that a city hall is the best use of the property. The publicly owned land at transit stations often makes TOD an attractive option for much-needed affordable housing, as noted by such policymakers and advocates as the U.S. Department of Housing and Urban Development.

Asked about the City Hall usage at the Brookhaven station, Fisher cited some numbers, specifically the lease revenue and the expected increase in ridership from an estimated 180 City employees plus visitors to its departments and community events. And there’s the key expectation that it “will inspire future development all around the station.”

Some other rationales are more about marketing and branding, such as making “a powerful statement about the centrality of public transit” and creating an “iconic City Hall that identifies Brookhaven as a forward-thinking city.”

The money part of the deal means the City will pay MARTA at least $8.5 million over the 50 years, by SaportaReport’s rough calculation — assuming construction happens as expected.

The lease sets the annual base rent at 6 percent of the appraised value, which is currently $2.9 million. That amounts to $174,000 a year. The base rent increases annually by either 2 percent or the increase in the U.S. Bureau of Labor Statistics’ Consumer Price Index — whichever is less. In addition, the property’s value will be reappraised at years 20 and 40 of the lease agreement but will be capped at a maximum of 12 percent of the previous year’s amount.

The deal also gives the City rent discounts prior to opening a new City Hall. The City pays only 25 percent of the base rent prior to construction and 50 percent during construction.

The City and MARTA say there is no construction timeline yet, and no budget has been announced. MARTA will retain property rights and the deal specifies that transit operations must not be affected by the plans, which the agency will have the authority to review and approve.

The City Hall lease is just part of a sizable spending program by the City on various new headquarters. A new police and court headquarters, costing roughly $18 million, is coming soon along the Peachtree Creek Greenway trail behind Buford Highway’s Northeast Plaza. The City’s quest for land for that headquarters was a factor in another development deal gone wrong that earlier this year cost the City a loss in a zoning lawsuit. The City also recently approved a $5.4 million purchase and upgrade of its soon-to-be-former police headquarters on Buford Highway for use by other City departments, presumably pending the new City Hall’s construction.