Beltline leaders have waited since 2005 for their first major infusion of money to get the 22-mile loop of parks, trails and transit jump-started.
And now that the first of a series of bonds estimated to generate up to $120 million is on its way to Atlanta Beltline Inc., the entity at the helm of the $2.8 billion project, the irony is that a substantial portion of that money may have to be used to pay for one sliver of land that could have been had essentially for free two years ago.
The bonds are expected to be approved in September by Atlanta City Council – but there's just one hitch. Beltline leaders have to pay Gwinnett County developer Wayne Mason and his son, Keith, $45 million before the money comes in.
Beltline leaders say they're exploring options with a range of different lender and investor prospects, including commercial banks and private investment companies.
Late last year, ABI agreed to pay $66 million for property and rail right-of-way near Piedmont Park that belongs to the Masons. The 80-acre property represents about one-fifth of the Beltline.
ABI partnered with Ben Raney and Barry Real Estate, and put down a $24.5 million down payment. The Masons loaned the joint venture another $45 million. The father-and-son developer team deferred principal and interest payments for the first six months. That grace period ended April 30, and now ABI is obligated to pay nearly $465,000 every month in interest and to settle the outstanding loan before Oct. 31.
The Masons had planned to build two high-rises at the corner of 10th Street and Monroe Drive, apartments and townhouses at Amsterdam Walk, and several shopping districts. The Masons offered to donate more than 50 percent of the land – which included the vital rail right-of-way – to the project and said the development would have generated $100 million that could be used to improve other parts of the project. The city rejected the plan because of the impact of the high-rises in an already congested area.
The obligations come at a time when the project leaders were expecting more but are making strides with less. The Beltline will be largely funded through a "tax allocation district" that was created by the city and was expected to generate an initial $200 million.
But a ruling in February by the state Supreme Court took away $80 million of that anticipated money. Fingers are crossed that voters in November will approve a constitutional amendment that would restore the full power of TADs. If approved, future bond offerings would ostensibly have double the purchasing power.
Beltline leaders now expect to receive as much as $120 million when the bonds are issued in September. But they won't have a clear idea of how much money the mechanism will generate until the 2008 Fulton County Tax Digest is released. The city's estimates are expected in mid-July.
According to a financial analysis obtained by CL, the project could be left with as little as $68 million to $75 million until the next round of bonds are issued in 2010. Of that, at least $31 million must be paid to the Masons by Oct. 31. The Beltline is also required by law to set aside a percentage of the bond funds for affordable housing along the project.
The idea that the largest chunk of TAD funds – which are traditionally spent on impoverished areas – going to the most affluent segment of the Beltline concerns the group that oversees the project. It wants to ensure that funds from the TAD are distributed "equitably" throughout all segments of the project.
The Tax Allocation District Advisory Committee includes civic leaders, stakeholders and residents. It serves a dual role as watchdog and partner to Atlanta Beltline Inc. The group has kept a watchful eye and hasn't held its tongue – in late February, it penned a letter to Beltline officials that criticized their lack of effort to engage the public and involve residents in key decisions.
Eugene Bowens Sr., chair of the committee, says he understands the concern that the most affluent area of the Beltline will reap more benefits than other traditionally overlooked areas such as southwest Atlanta. "That's where TADAC comes in," he says. "That's our mandate. To be sure that this type of scenario doesn't turn out for the Beltline."
Bowens says he understands the need for the Beltline to own the property. But he says it's vital that other monies go to other areas of the project.
Liz Coyle, who serves on a Beltline advisory board, says the Mason property is critical because it includes the rail right-of-way. She calls the rail lines circling the city the "spine of the Beltline," and vital for the project to take full shape.
The rail rights are critical because the hope is that there will be light-rail service to move the large number of people who will live adjacent to the Beltline. According to a recent estimate, more than 50 developments have already sprung up along the 22-mile belt.
MARTA recently agreed to loan Beltline leaders $5 million for a joint environmental study the two entities are conducting. Beltline leaders also plan to conduct transit studies for various areas of the project – two signs that offer hope that the project is adhering to its original vision and not simply a gold mine for developers.
"It is important to understand that attracting development around the Beltline is important to making transit feasible and to fueling funding of the project via the TAD," Beltline CEO Terri Montague says.
But Bowens warns that without scrutiny, irresponsible development could kill the goals of the Beltline – to connect and benefit Atlanta neighborhoods with transit, parks and trails.
"I hope that we are going to be able, as a community, [to maintain] the standards and quality of the vision that was originally laid out before us," he says. "And that that would not be for sale, so to speak."
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