11 Aug

2nd UPDATE: Developer, city of Brookhaven, Ga., part ways over affordable housing definition

A proposal for a mixed-use development off Buford Highway in the City of Brookhaven, Ga., appears to be off the table after a dispute over affordable housing.

In a statement, the city said it was unable to reach an agreement on economic incentives with Ardent Companies, which planned an mixed-use development including apartments and town homes on Bramblewood Drive, off of Buford Highway.

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Map showing the location of The Ardent Companies LLC’s proposed townhome development in Brookhaven.

An executive for The Ardent Companies on Wednesday disputed the city’s account of the affordability terms negotiations for the project, and said the city had asked for a profit share in the development when it sold, which the company declined.

Brookhaven had been negotiating the incentives with Ardent for several months, the city said in the July 31 statement.

Ardent Companies’ submitted multiuse project 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 (schools, county, and city) totaling approximately $30 million, according to the city’s statement.

Brookhaven Mayor John Ernst sent letters to property owners explaining that the sticking point in the redevelopment negotiations was the definition of “affordable” housing.

According to the statement, the letter stated, “We could not come to an agreement as to the area median income (AMI) that would be the threshold for ‘affordable’. Ardent Companies wanted to use an Atlanta region AMI of $68,000 and the City wanted to use the average AMI for the census tracks around Bramblewood Drive at ~$50,000. 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.”

The Ardent Companies Managing Director Neville Allison, in an email to Atlanta Business Chronicle Wednesday, said, "First, Brookhaven did not offer to use $50,000 as the AMI. They wanted to use $35,000, without citing any sort of source. We wanted to use $68,000 which is the published AMI for the Atlanta MSA and what Invest Atlanta, the beltline, and the city of Atlanta uses (I’ve attached the link to their chart here.)

"– The AMI for the city of Brookhaven is actually a little higher than the Atlanta MSA at $71,000. It should be noted that the city of Brookhaven has no published guidelines or standards for affordable housing.

"The real issue with the tax abatement is as follows: Mayor John Ernst told Ardent that he wanted to abate the property taxes (school board gets the majority of property taxes) for every project that came through Brookhaven as retribution for the school board voting to relocate Cross Keys High School outside of the city limits. Further, the city wanted a kickback from Ardent in the form of a profit share in the development when it sold. Essentially they demanded an equity return in our private development in exchange for abating the property taxes which they were not entitled to (county and school board portion of the property taxes). Not only had we never heard of such an arrangement, it did not seem ethical or legal to Ardent to allow the city to receive monetary compensation in exchange for the tax abatement.

"I’ve attached the City’s draft framework requiring $35,000 as the AMI and their request for the kickback/ profit share. To be perfectly clear, we told the city from the very beginning that there was no scenario for which we would allow them profit share in the development in exchange for the tax abatement," Neville Allison’s email concluded.

In an emailed statement to the Chronicle, Brookhaven’s mayor responded that the City Council’s July 24 decision to reject The Ardent Companies’ proposal had nothing to do with the school board. Ernst said in the email:

“One of the frustrating things about talking with Mr. Allison is his propensity to take facts out of context.

"At the time that the DeKalb School Board announced its decision to relocate Brookhaven’s only high school, I was very vocal about my position. It is also a fact that as Mayor, I am not a party to the negotiations on this, or any other development project.

"The City Council rejected Ardent’s best and final offer on July 24 after a presentation and evaluation from City staff. In the end, it had nothing to do with the school board, and everything to do with an unreasonable request for $30 million in tax abatements for a project with no appreciable affordable housing component and the apparent sole intent of using $30 million in taxpayer dollars to finance a private development.

"We do, however, appreciate the effort, and wish Ardent well in their future endeavors.

Mayor John A. Ernst, Jr."

As far as the area media income (AMI) discussions, city spokesman Burke Brennan said in an earlier email "The $35,000 figure was discussed in earlier negotiations, but it was not where the City of Brookhaven ended up in discussions with Ardent. In subsequent communications with Ardent, Brookhaven’s position was $50K, based upon publicly available data as listed below:

HUD defines median income in metro Atlanta as $67,500 regardless of HH (household) size. Below is pulled the HUD 2018 summary of income limits for metro Atlanta Region receipt of federal aid—mainly housing subsidies. This is general guidance, and census block information overrides.Extremely low $20,160Very Low $30,400Low as $48,600

"This would indicate that a $35,000 critical point would assist the very low to extremely low income families in the metro Atlanta area and a $50,000 critical point would assist low income HHs.

Brennan said the census block information, specific to Brookhaven Bramblewood block, says the census block AMI is $45,839, and 38.1 percent of households in the block have income below $35,000. Averaging the AMI of the five census blocks surrounding the development (including the significantly sized one it is in) gets to the $52,604 AMI, Brennan said.

"While including the block immediately to the west would not be an appropriate comparison as it is Lenox/Buckhead and its irregular shape brings it from a low income area to high, it should be noted that over 20% of (households) in that block have an income under $35,000 and would likely qualify for federal subsidies," the city spokesman said.

"This is how we arrived at $50,000, and this was the offer to Mr. Allison by City Manager Christian Sigman and Economic Development Director Shirlynn Brownell on July 11. We stand behind the statements made in our announcement on 7/31," Brennan said in the email.

Brookhaven is working on a zoning rewrite, expected to be available in mid-August, that will include many recommendations by the city’s Affordable Housing Task Force. The recommendations the task force submitted to the City Council in July 2017 included exploring creative innovations and cross-sector solutions to protect existing affordable housing and incorporating affordable housing into the 2017 Brookhaven zoning rewrite.

“While we applaud the developer’s effort to include an affordable housing component, but the corresponding incentive request to abate 100 percent of property taxes for 30 years was not realistic” City Manager Christian Sigman said in the statement. “The Buford Highway corridor is home to many redevelopment opportunities from end to end. This particular plan did not work out, but it was an educational and cathartic exercise for us as a City.”

“We look forward to working with other development partners in Buford Highway corridor,” said Sigman.

“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 Doug Hooker, executive director, Atlanta Regional Commission, said in the statement. “It appears that Brookhaven has taken this approach.”

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