Integral’s Egbert Perry finds stance of AHA and Mayor Reed ‘baffling’

By Maria Saporta

Affordable housing developer Egbert Perry, and his Atlanta-based company  – Integral, are fighting back against claims by Atlanta Mayor Kasim Reed and the Atlanta Housing Authority (AHA) that he had received a sweetheart deal to buy land next to his company’s existing developments.

In an effort to set the record straight, Integral and its development partners filed a legal response late Saturday to an AHA lawsuit. The response seeks to correct several statements AHA and Reed have made, which Perry said are  misrepresentations of his company’s actions and history.

The legal response also includes Perry’s recounting of a direct threat he received from city officials if he and his partners did not give up rights to a piece of property across from the King Memorial MARTA Station so the city could build a natatorium.

Egbert Perry

Egbert Perry, founder and CEO of the Integral Group, in a conference room at his company’s headquarters (Photo by Maria Saporta)

The lawsuit and response are just the latest in a feud that began nearly eight years ago, shortly after Reed was elected mayor.

Going back to the mid-1990s, Perry and Integral had partnered with AHA to redevelop Techwood Homes into Centennial Place – creating a national model for mixed-income communities replacing the dilapidated public housing projects.

Shortly after he became mayor in 2010, Reed tried to fire Renee Glover, CEO of AHA, despite the fact that she had received national accolades for transforming public housing projects into successful, mixed-income communities.

Throughout his administration, Reed has tended to view Perry and Glover as his adversaries, and the tension between Integral and City Hall has existed ever since.

The response to the AHA lawsuit states that on Sept. 16, 2011, AHA entered into option agreements to buy about 79 acres adjacent to its master-planned communities of Auburn Pointe, Capitol Gateway, CollegeTown and Villages at Carver.

Those developments, which each had different minority partners, were approved by AHA.  They contemplated developments with retail and a mix of incomes – including market-rate housing, so as to create viable communities.

Integral had options to joint venture with AHA in buying the 79 acres, and AHA retained 50 percent interest in the property and 50 percent interest on any profits or proceeds realized from the development of those sites.

On Nov, 3, 2016, the Integral development teams advised AHA they would exercise their options to purchase the 79 acres. That should have triggered both AHA and the development partners to each appoint an appraiser to determine the value of the land.

natatorium

The King natatorium the city sought to build opened on Oct. 30, 2017 with much fanfare (Photo by Kelly Jordan)

AHA declined to appoint an appraiser, and on Aug. 11 of this year, the development partners sent AHA a notice of default for not naming an appraiser.

On Sept. 1, AHA filed a complaint with the court asking for declaratory judgment saying the agreements were unenforceable and inconsistent with the City’s need for affordable housing.

That led to Integral and its development partners filing a motion on Nov. 4 to dismiss AHA’s complaint as well as documents to respond to the lawsuit along with counterclaims.

“I am proud of what the Integral Group has accomplished over the past 25 years,” said Egbert Perry, CEO of the company, in a statement. “Our Community Development Division has transformed many communities and produced approximately 8,000 affordable and workplace housing units across the country, with about half of those units in Atlanta.”

Perry went on to say that the already developed portions of the sites contain 60 percent to 80 percent affordable housing – far higher than any other project AHA and the city are currently proposing..

The Integral-AHA plan all along was to develop the 79 adjacent acres with retail, for sale residential and market-rate rental to ensure the developments would be sustainable mixed-use and mixed-income communities.

“The terms for acquiring and developing the 79 acres were legally negotiated and executed, beginning several years before the current mayor took office,” said Perry, reinforcing the fact that AHA would continue to own 50 percent of the developments without assuming any of the financial risk.

Perry also called the related publicity by AHA and Mayor Reed against Integral “baffling” – given that between 60 to 80 percent of what has already been developed is affordable. Even when the developments have been fully built out, more than half the units would be affordable.

natatorium

Mayor Kasim Reed on the interior walkway of the new Martin Luther King Jr. Recreation and Aquatic Center (Photo by Kelly Jordan)

The AHA “lawsuit is also baffling” given that during the past eight years, AHA has owned more than 300 acres of land on  a dozen other former public housing project sites, Perry said. He added that all of those sites “continue to sit vacant and untouched in spite of AHA’s reserves of well in excess of $100 million, while we find ourselves at the height of a housing affordability crisis.”

The legal response also describes a meeting Perry had with two City of Atlanta officials – Michael Geisler, then the City of Atlanta’s chief operating officer, and Amy Phuong, the City’s commissioner of parks and recreation – at their request. Also present in that meeting was Joy W. Fitzgerald, then AHA’s president and CEO.

The City wanted to acquire a key piece of land (known as the Annex site) across from the King Memorial MARTA Station (land that Integral and his partners had an option to buy) so it could build a natatorium.

The legal response describes the meeting this way:

On or about May 21, 2014, City of Atlanta Chief Operating Officer Michael Geisler and City of Atlanta Commissioner of Parks and Recreation Amy Phuong requested a meeting with Integral’s CEO to inform him that they had been directed to “to deliver one message to you and one message only.” Ms. Fitzgerald of AHA and Eric Pinckney of Integral were also present for the meeting. Mr. Geisler delivered the message: “You will relinquish your rights to [the Annex site to accommodate the natatorium], otherwise we will make it difficult, if not impossible, for you to do business in the City of Atlanta.” Mr. Geisler then repeated the message verbatim, and Ms. Phuong confirmed that he had accurately relayed the message.

The Integral development team and AHA finally agreed to a deal that would credit the developers more than $1 million as compensation against the purchase price of the remaining undeveloped portion. That agreement basically confirmed the Integral development teams’ options to buy land next to its existing developments.

In documents, AHA represented to the Integral development team that it would be donating the natatorium land to the City. But such a position would contradict AHA’s current stance – that selling the 79 acres at below-market value for development without affordable housing – renders the contracts void and unenforceable.

“The AHA’s behavior in connection with the natatorium land demonstrates that this lawsuit is pretext for a land-grab, orchestrated by the City,” said Billy Linville, an Integral spokesman. That would explain “Mayor Reed’s sudden interest in publicly litigating the matter, and personally attacking the integrity of Integral’s CEO.”

Read related column by Hattie Dorsey, a civic leader who was the founding and retired president of Atlanta Neighborhood Development Partnership (ANDP).

Integral housing

The Integral development teams have built communities with way more than half of the housing units being affordable (Chart: Integral Group)

King natatorium

The City of Atlanta reportedly threatened Integral CEO Egbert Perry to give up the ownership rights so it could build the natatorium, which opened Oct. 30 (Photo by Kelly Jordan)

A reflection in the new natatorium shows Integral’s development near the King Memorial MARTA Station (Photo by Kelly Jordan)

Maria Saporta, Editor, is a longtime Atlanta business, civic and urban affairs journalist with a deep knowledge of our city, our region and state.  Since 2008, she has written a weekly column and news stories for the Atlanta Business Chronicle. Prior to that, she spent 27 years with The Atlanta Journal-Constitution, becoming its business columnist in 1991. Maria received her Master’s degree in urban studies from Georgia State and her Bachelor’s degree in journalism from Boston University. Maria was born in Atlanta to European parents and has two young adult children.

10 replies
  1. George Hawthorne says:

    I have known Egbert and Integral since its formation. I would challenge anyone to find a developer that has done more to transform the face of public housing more that Integral and Egbert Perry. The real fact is that now the Mayor and AHA are trying to default on a deal based upon the increased current market value of the properties – and that “increase of value” is directly attributed to the capital invested and financial risks taken by Integral and Egbert Perry when he redeveloped the poverty ridden public housing that had been on the properties in question. I think that the Mayor’s intent to discredit and harm the “character and integrity” of Egbert Perry is a horribly misplaced tirade of the Mayor against a man that I have known for more than 25 years and whom has been a consistent and highly effective advocate for affordable housing and holistic community development of Atlanta’s community. Clearly, the track record of Integral’s and Egbert Perry’s development of affordable housing far exceeds that of and is far more evident than that the Mayor and AHA in the community development space. This is a horrible precedence and a sad chapter in Atlanta’s history of public private partnerships for community development and may have a chilling effect on future developers willing to provide investment in Atlanta’s affordable housing.Report

    Reply
  2. Burroughston Broch says:

    Baffling? Here is a potential scenario: His Dishonor wants to invalidate the Integral contract and then sell the properties to other friends, who will financially reward him.Report

    Reply
  3. John R. Adams says:

    Mr. Perry, I am sorry that you being treated so poorly by our clearly crooked and greedy mayor. What a shame. The only good news here is that Mayor Reed is going away soon. I hope you won’t be overly discouraged by his horrible behavior and will continue to do the Right Thing for Atlanta. Thank you.Report

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  4. Roy Beeson says:

    I agree fully with George.

    It is too bad that Atlanta is not blessed to have a visionary leader like Egbert as its mayor in lieu of a political operative like Reed.

    This article illustrates some of the reasons why many companies don’t want to do business with the City.Report

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  5. Carrie M Salvary says:

    At the same time as Integral was busy creating new communities out of existing public housing properties in Atlanta and other cities across the United States of America, Mr. Egbert Perry gave his personal time to assist a neighborhood based developer (Tyler Place CDC) in the Vine City neighborhood, to develop four (4) blocks of vacant and abandoned properties into affordable housing for existing and other new residents.

    As the President and Executive Director of Tyler Place CDC, I am eternally grateful that Mr. Perry did not judge us as being unfit for his time and talent, but more concerned that the neighborhood itself was in need of new sustainable development.

    I find it reprehensible that our Mayor, Kasim Reed could stoop so low with his egomania as to attempt to assassinate the professional and business character of the Integral Group and Mr. Egbert Perry.Report

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  6. Bruce C Gunter says:

    Egbert, i hope you are heartened by the expressions of support by citizens like myself who are aware of the tremendous work you and Integral have done over the years, work which has left our city–and so many of our less fortunate citizens–much, much better off. We have all seen this movie before, but know that since you have outlasted recessions, development challenges galore, and much more, you will emerge from this dust-up, too.

    Bruce GunterReport

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  7. Dr. D. Farmer says:

    This is absolutely unprecedented! There is nothing right about this and everything wrong with even trying to renig on an agreement already made and why now? The Mayor is a bully and he’s petty. There’s no telling how low he will go. In that cesspool where scandal is rampant and ignored the people who try to do right for the least of these are often put under attack! I could name them…..

    Egbert Perry is one of the most upstanding businessman in Atlanta. I’ve had the opportunity to work on projects he’s done and he’s honest, fair and really good at what he does! It’s a shame that everything that is wrong is right and everything that is right is wrong in Atlanta. The Mayor should stop it before no decent people want to live or do business in Atlanta. What happened to a man’s word being his bond?Report

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  8. C. Amiger says:

    I applaud you Mr. Perry, continue and don’t give up the fight. You are one of few developers who from many years back had the vision to to build mixed income/affordable housing when others have run to make huge profits with high rises and high rents.

    In addition, I appreciate your continued goal to offer beautiful and affordable senior housing with transit access and amenities. I read the deplorable comment in the 11.7.17 AJC article, ‘If Perry didn’t give up his claim to the property, “We will make it difficult, if not impossible, for you to do business in the City of Atlanta.” the city’s then-chief of staff told Perry, according to the filing.’

    In my 30 + years in real estate in Atlanta, I have seen and shown with pride, many of The Integral Group’s housing developments and know employees whom are proud to be associated with such a firm. As long as Mr. Perry continues on the right side of justice for the least of us, you will prevail.Report

    Reply

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