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Invest Atlanta reaches legal settlement with CAU; fate of Gaines Hall still unclear

By Maria Saporta and Maggie Lee

The city of Atlanta’s Invest Atlanta has settled a lawsuit with Clark Atlanta University over a property dispute involving land that used to belong to Morris Brown College – including the historic Gaines Hall.

The deal means the school will receive $750,000 to cover attorneys’ fees. The money will come from the Westside Tax Allocation District Special Fund, a zone of the city where a portion of property taxes are used to spur development.

Since a 2015 fire, Gaines Hall has continued to crumble. File/Credit: Kelly Jordan

Since a 2015 fire, Gaines Hall has continued to crumble. File/Credit: Kelly Jordan

The Invest Atlanta board approved the settlement during an executive session on April 18, according to meeting minutes.

The board resolution authorized “the execution and delivery of all settlement and release documents necessary to conclude the litigation” with Clark Atlanta. The settlement still needs to be sanctioned by the Superior Court of Fulton County.

No terms of the settlement were announced. And representatives from both Invest Atlanta and CAU declined to provide details of the deal. But documents provided to the IA board and obtained through an open record request revealed the settlement figure. The documents also indicated that Clark Atlanta and Invest Atlanta had entered into mediation on Nov. 30, 2018.

Meanwhile, it is unclear how the settlement will impact the future renovation of the fire-damaged Gaines Hall, a historic treasure that dates back to 1869.

The city’s Invest Atlanta and CAU have been in a prolonged legal battle for years over land that used to be owned by Morris Brown. The city and Friendship Baptist Church jointly bought 36 acres for $14.6 million on Aug. 29, 2014.

Friendship acquired 6 acres south of Martin Luther King Dr. for $4 million. The city bought the remaining 30 acres for $10.6 million. But 12 to 13 acres of the city’s share had once belonged to Atlanta University (now CAU). Atlanta University gave Morris Brown ownership of the land with a “reversionary clause,” that stipulated the land had to be used for educational purposes. If it was not used for educational purposes, the land would revert to Atlanta University (CAU).

After the city bought the land, the historic Gaines Hall caught fire in August 2015, and it was significantly damaged. Little has been done to stabilize the landmark, which holds a special place in African-American history.

When the city bought the Morris Brown land, CAU filed a lawsuit saying it was the rightful owner of the property. The city sued back. And the two were in litigation for years with the city losing at every turn – all the way to the Georgia Supreme Court.

After the city had exhausted all its legal options, CAU demanded that the city repay the university for all its legal expenses – at one time totaling more than $2 million.

There also was the issue of who would restore Gaines Hall. The building had been insured by the city at the time of the fire, but the insurance company paid the city only $1.4 million for the damage done at Gaines Hall.

Gaines Hall 2013

Before the fire: A boarded up Gaines Hall awaits its fate in 2013. File/Credit: Maria Saporta

Initially, the city had estimated that it would cost between $8 million to $12 million to restore the historic structure It has continued to degenerate over the past three-and-a-half years with a large part of the main façade crumbling last year.

The issue has been further complicated with a change of leadership at CAU. Former President Ronald Johnson stepped down from his post in early December 2018. Lucille H. Maugé, who had served as CAU’s executive vice president and chief financial officer, is serving as interim president. A search is underway for a permanent president.

Despite the litigation and the different leadership changes, people continue to state they want to preserve the fragile historic structure.

“We remain committed to doing what we can to preserve Gaines Hall,” said Matt Fogt, a spokesman for Invest Atlanta. “The insurance money is still in Invest Atlanta’s custody. We are having active discussions with Clark Atlanta on stabilization.”

It is not clear from the settlement agreement whether the city, CAU or both, would be responsible for restoring Gaines Hall.

Maggie Lee is a freelance reporter who's been covering Georgia and metro Atlanta government and politics since 2008.

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  1. […] April 18, the two sides lay down their arms and agreed to a settlement where the city agreed to pay $750,000 in legal fees that CAU had incurred due to the litigation (in […]Report

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