Tuesday, September 29, 2009
News TAD development falls into foreclosure
Posted by Scott Henry @ScottTheHenry on Tue, Sep 29, 2009 at 10:44 PM
Well, now we know that simply getting tax allocation district funding doesn't guarantee a project's success.
Renaissance Walk, a 161-unit condo complex located smack-dab in the Auburn Avenue historic district, went belly up last week after lenders rejected a restructuring plan.
The 27,000-square-foot development was one of seven projects in the Eastside TAD that was approved in 2005. The product of a partnership between the Integral Group and Big Bethel AME Church, Renaissance Walk cost $48.5 million to build and received $4 million in TAD funding.
What will be the impact on the TAD itself? Very little, says Cheryl Strickland, Managing Director of TAD programs at the Atlanta Development Authority. The project is already built, the bonds are in place and so, as far as the city's concerned, the foreclosure has about the same effect as any other kind of ownership change.
According to a press release, Integral, a well-connected and ambitious developer with offices just around the corner from the project, will lose close to $20 million on the deal. That's got to hurt.
But that's not the only thing lost in this debacle. To make way for the condos, several old buildings had to be demolished over the pleas of preservationists who argued that Sweet Auburn's legacy as "the richest Negro street in the world" — as John Wesley Dobbs famously described it — demanded that developers find a way to preserve the area's history while bringing progress.
But Big Bethel had spent years buying up property along Auburn and Renaissance Walk was supposed to be its vehicle for cashing in on that investment. So the old buildings came down, replaced by a huge, nondescript condo complex — and now the church has lost out on its gravy train. Anyone believe in karma?
Comments (10)
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What a shame. Renaissance Walk most definitely not nondescript; in fact, Renaissance Walk is one of the most urban, pedestrian friendly projects built in Atlanta. Although it may be encountering some difficulties now, this area (with GSU's continued support) is set to boom in the years ahead as people look towards a more walkable lifestyle.
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Nondescript, yes, maybe pedestrian friendly, let's see after all the vacant units are occupied. What's frustrating is that this is another example of speculative demolition of historic structures that has happened over and over during up and down economic times in Atlanta, leaving in its path (see midtown and downtown atlanta) now mostly surface parking...
ADA may not care, but foreclosure means the value of property in that TAD cannot be what was hoped. That means property taxes to the TAD will be lower than planned and it will take longer to pay off ADA's bonds. The city will have to wait longer before property taxes start to contribute to the city's budget. ADA should ask itself what proportion of Atlanta's development this decade has been TAD-supported and to what extent did TADs promote the glut. By the way, surely Integral won't have stayed on the hook for nearly 50% of the cost of the condo building? Some bank - and then possibly the FDIC - will be taking the big hit.
Cityzen -- the bulk of the condo glut has been in Midtown and Buckhead, outside TAD boundaries.
Perhaps you should actually take a look at the development-- not only were four historic buildings preserved (most of the existing buildings on the block) saved and restored as a part of the 27,000sf+ street level retail... The project has also recently received one of the most prestigious design awards offered in the Southeastern Region recently—As a work of architecture, it was recognized as a model for sensitive contextual urban development—Responsive to the historic nature and scale of its extremely important Auburn Ave./ King District site… No condominium development in Atlanta large or small has sold much since the recession hit over a year ago—Only in this unfortunate category is Renaissance Walk is just one of many…
Yeah, I gotta chime in and agree with the others who have protested the 'nondescript' claim. I think this is one of the best mixed use projects I've seen in the city as far as the way it fits well into the architectural fabric of the existing, surrounding buildings. To me, it's very attractive. I'm sorry for the developers' loss with the foreclosure, but regarding the city's input into the development, I don't think it's a loss. I think this mixed-use project could still be the anchor for a revitalization in this area -- and it really does need to be revitalized. It's a crime that a place with so much rich history and significance to the city (and the city's Black community) was ever allowed to become as worn down as it was.
Point taken, ya'll. My "nondescript" description was, in retrospect, overly harsh. Before the project was built, I wrote a cover story about the street and the argument by preservationists that the area's planned revival was coming at the expense of historic properties. I still believe not enough was done to maintain the historic fabric of the street, but I agree that, by most standards, RenWalk hits all the right notes in terms of pedestrian-friendly, smart-growth development.
Gotta chime in here... I toured (and made a vid featuring) Renaissance Walk. I thought it was marvelous. Still is. I'd have bought a place there too, but the pay in social media is lousy so I can't afford it either. But glad our tax dollars could be allocated to... make someone rich in this process, although for the life of me I can't figure out who gets the money this go 'round. But someone always does! (Get the money.) Typically it's not me, that I do know. Vid of some cool stuff going on at Renaissance Walk is here: http://vimeo.com/3445540
Joeventures - Perchance you should put your ear to the ground, or look about, a bit more carefully. Vacant condos abound within spitting distance of Auburn Ave - the monster sitting on Freedom Pkwy at Boulevard a huge example; The Stacks are in distress; and all that is about a 7 min drive from the two-for-one offer of Viewpoint on P'tree. The glut is all over, and with more coming on-line, and intowners living lives of quiet desperation, it will continue. I disagree with the "preservation" aspect, but then actually working with preservationists as opposed to looking at things from the outside in gives one a different perspective. The National Park Service was against the plan, and some quietly were even more against it b/c they questioned the financial reality of it all. And they were right... Maybe as the bulldozing of Section 8 housing and the closing of schools in the immediate area continues, the poor will be run out on a rail from Kwanza's district and all the nice rich college students will fill the void...
OK, the only viable plan is to cut all city workers' pay by ~25% and give them rent vouchers for the same amount - good only for apts in the city limits. That would sop up a few thousand empty in-town apts, reduce commuting and stick it to the burbs. City property tax and sales tax would rise. Cops and firefighters living in town would possibly make the place safer. What's not to like? C'mon Kasim, you're the only one with the cojones to do it.
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