The city has rejected developer Ardent Companies’ request for a $30 million tax abatement as part of a mixed-use development off Buford Highway after no agreement could be reached on affordable housing.

But Neville Allison, managing director for Ardent Companies, said the deal with the city was a “real nonstarter” because the city insisted on becoming an equity partner when the project to be located on Bramblewood Drive sells.

Neville Allison of The Ardent Companies with a rendering of the proposed townhomes to be built on Bramblewood Drive at a December 2017 meeting. (File/Dyana Bagby)

“A city’s profit participation in a private developer’s real estate deal in exchange for a tax abatement is simply unheard of,” Allison said.

Ardent Companies submitted a multiuse project that called for 10 percent, or 30 units, of the housing to be affordable. The developer requested a 30-year tax abatement on all property taxes — school, county and city — totaling approximately $30 million, according a city press release.
Brookhaven Mayor John Ernst sent letters to property owners living on Bramblewood Drive, explaining that the sticking point was the true affordability of “affordable” housing.

“We could not come to an agreement as to the area median income (AMI) that would be the threshold for ‘affordable,’ ” Ernst said in the letter.

“Ardent Companies wanted to use an Atlanta region AMI of $68,000 and the city wanted to use the average AMI for the census tracts around Bramblewood Drive at approximately $50,000,” Ernst stated. “An AMI of $68,000 would essentially be out of reach for many living on Buford Highway, our city employees, or teachers serving local schools.”

Allison claimed his company’s AMI was a verifiable number that should have been used, adding it is the same AMI used for affordable housing along the Atlanta BeltLine.

“Obviously there were many points in this first proposal that we challenged and also most of which the city backed off of, but the AMI definition was one they [the city] stuck to and yet refused to provide an actual source,” Allison said.

City officials said their $50,000 figure is based on HUD numbers specific to the Buford Highway corridor.

Ardent Companies was seeking to rezone 15 acres on Bramblewood Drive and Buford Highway to build a 197-unit townhome development. There are currently 29 single-family homes in those 15 acres on Bramblewood Drive.

But in June the City Council deferred the rezoning for 90 days because members said they wanted to see a mixed-use development and different housing price points. Since that time the city and Ardent have apparently been trying to negotiate a deal on what to build on the Bramblewood property.

Allison disputed the city’s claim it was seeking an AMI of $50,000 and said the city was actually seeking an AMI of $35,000. That number was discussed early in the months-long negotiations, according to a city spokesperson, but the $50,000 figure was what was settled on.

Brookhaven City Manager Christian Sigman.

“All Ardent wanted was a fair and unbiased process for the rezoning that would bring a dynamic mixed-use development, including affordable housing to Brookhaven and the Buford Highway corridor,” Allison said. “It’s a shame that the mayor, City Council and the city manager prefer to bully and extort its developers rather than give developers a fair process.”

In his letter to the Bramblewood property owners, Ernst explained the “claw-back” provision the city was seeking as part of the negotiations on the tax abatement.

“Ardent would not consider a claw-back provision if the multi-family property sold at a price much higher than the actual cost,” he said.

“Specifically, if the Ardent Group sold the multi-family component within 48 months of occupancy at a greater price than 8 percent annual return on investment, the city would get a portion of the sales proceeds above the 8 percent rate of return.

“As a matter of prudent stewardship of taxpayer funds, the city’s $30 million contributions to the project should be reconsidered if the property flipped with an exorbitant profit within 48 months of opening,” Ernst stated.

The Atlanta Regional Commission sided with Brookhaven in its decision to break off negotiations.

“Housing affordability is a complex and context-sensitive regional issue. Therefore, it behooves each city and county to assess what makes the best decision for its community, based upon its economic situation and community goals,” said ARC Executive Director Doug Hooker in a prepared statement.

“It appears that Brookhaven has taken this approach.”

Allison said his company first introduced the idea of affordable housing in the proposed development project back in December and was originally seeking to build townhomes in the high $200,000 range.

He is unsure of what will happen with project moving forward.

City Manager Christian Sigman said the Buford Highway corridor is “home to many redevelopment opportunities from end to end.”