By John Schaffner
The Atlanta City Council voted 9-1 on Oct. 29 to issue $64.5 million in bonds for the BeltLine in a move designed largely to prevent the city from losing a $26 million investment in key property along the northeast quadrant of the 22-mile project.
BeltLine officials initially proposed a $120 million bond issue but scaled it back to $64.5 million because of the unsteady financial markets. Those who have followed the process closely indicated that no firm was interested in underwriting the full $120 million, at least not at a reasonable interest rate.
Officials said plans call for issuing the rest of the bonds next year, when the bond market is expected to be in better shape.
Of the $64.5 million the bond sale will raise, about two-thirds, or $45 million, will go to the family of Gwinnett County real estate investor Wayne Mason to buy 4.5 miles of land along the BeltLine’s northeast corridor, including through Piedmont Park.
The family had given the city an Oct. 31 deadline for completing the purchase of the land. Otherwise, the Masons would have regained control of the property and kept the money they already had received: $26 million, including interest payments.
That was not considered to be much of an option for the city.
“We don’t have a choice,” said Councilwoman Anne Fauver, whose district encompasses much of the property owned by the Masons. Fauver and some other council members supported the bond deal reluctantly because of the volatility of the credit market. The council agreed to a 6 percent interest rate on the bond issue.
The nine council members who voted for the bond issue are Kwanza Hall, Ivory Lee Young Jr., Cleta Winslow, Anne Fauve, Howard Shook, Jim Maddox, Joyce Sheperd, Mary Norwood and H. Lamar Willis. The lone vote against was cast by Felicia Moore.
Absent for the vote were council members Carla Smith, Natalyn Mosby Archibong, C.T. Martin, Ceasar Mitchell and Clair Muller.
The Masons reportedly paid about $25 million for the property when they bought it from Southern Railroad a few years back.
The family submitted plans to the city to rezone the property to allow dense housing, including two high-rise condo towers on the edge of Piedmont Park. In return, Wayne Mason offered to donate 43 acres to the city for the construction of the BeltLine transit line and paths.
Pressure from the surrounding neighborhoods forced the city to reject the Mason proposal, and the city entered into the agreement to purchase the land from the family more than a year ago.
The purchase of the land is important because it will bring the first part of the BeltLine right of way into city ownership, allowing officials to begin designing and routing the transit line and trail in that area. The remainder of the 22-mile loop around the city is still owned by freight and rail companies and the state Department of Transportation.
The second round of bonds could be a much larger amount after Georgia voters approved a referendum Nov. 4 to allow school tax money to help fund redevelopment projects like the BeltLine through tax allocation district (TAD) bonds. The state Supreme Court had ruled that the law before the referendum did not allow school tax money to be spent on anything but schools and education.
Also, the bonds just bought by SunTrust and Wachovia banks could be refinanced next year, said Terri Montague, the president and CEO of Atlanta BeltLine Inc., the nonprofit agency overseeing the BeltLine.
Members of the Atlanta Planning Advisory Board, a citizens group made up of representatives of all the neighborhood planning units (NPUs) around the city, have tried to get details from Atlanta BeltLine about where money is being spent, NPU-B representative Cathy Muzzy said, but “have been stonewalled.”
Muzzy told the Buckhead Reporter she understands $3.5 million has been paid to Barry Realty, which was brought into the purchase of the Mason property by Mayor Shirley Franklin and the BeltLine board but, she said, had little to do with the process.
She also said about $8 million is being earmarked to fund affordable housing initiatives. But none of the advisory board members has received a copy of the documents.