Bond deal enables Beltline purchase

The Atlanta City Council approved a deal Wednesday aimed at preventing the city from losing a $26 million investment in a key piece of property along the ambitious Beltline project.

The council voted 9-1 in favor of issuing the sale of $64.5 million in bonds for the Beltline, a 22-mile loop around Atlanta’s core that many city leaders envision will blossom into new residential development, parks, affordable housing and transit in coming years.

About two-thirds of that bond money, $45 million, will go to the family of Gwinnett County real estate investor Wayne Mason to buy 4 1/2 miles of land along the Beltline’s northeast corridor.

The Masons have given the city a Friday deadline for buying the land. Otherwise, the Masons regain control of the property and keep the money they’ve already pocketed —- $26 million including interest payments.

City officials decided the loss of that money was not an option.

“We don’t have any choice,” said Councilwoman Anne Fauver, whose district encompasses much of the property owned by the Masons. “We’ve got to buy them out.”

The sale is significant because it will bring the first part of the Beltline right of way into the city’s hands, freeing officials to design the route of the proposed transit line and trail in that area. The rest of the 22-mile loop is owned by freight rail companies and the state Department of Transportation.

Fauver and some council members supported the deal reluctantly, particularly because of the volatility of the current credit market. The city agreed to a 6 percent interest rate, which Beltline officials said would have been lower before the economic crisis battered the bond markets.

Beltline officials initially proposed a $120 million bond issue, but scaled it back to $64.5 million because of the unsteady market. Plans call for the rest of the bonds to be issued next year, when the bond market presumably will be in better shape.

The second bond issue could be much larger if Georgia voters approve a referendum next week that would allow school tax money to help fund redevelopment projects like the Beltline.

The bonds, bought by SunTrust and Wachovia banks, could be refinanced next year, said Terri Montague, president and CEO of Atlanta BeltLine Inc., the city’s nonprofit arm overseeing the Beltline.

Mason originally had sought to rezone the property to allow for dense housing, including a pair of condominium towers near Piedmont Park.

In return, he had offered to donate 43 acres of the property to the city for the construction of the transit line and trails.

But Mason’s plans were bitterly fought by area residents, who favor smaller-scale development that they say will better fit the neighborhood’s character. Mason withdrew his zoning request more than a year ago.

Staff writer Paul Donsky contributed to this article.