The Atlanta Beltline Inc. has taken a turn into the condo business.
On Monday, Beltline launched a marketing campaign for 30 units in a Memorial Drive condo building that it quietly bought in September. It hopes to sell the 2-bedroom units fast for $150,000 each and then go back to building parks, trails and a transit loop.
The Atlanta organization paid $3.7 million for the Triumph Lofts, which sits along the Beltline's path in the Reynoldstown neighborhood east of downtown.
The South Beach-style condos in a former motorcycle factory fell into distress during the real estate bust, leaving the $200,000 to $300,000 units unsold. Then a tornado hit the building in 2008, causing some water damage.
“The private sector was unable to complete it," said Brian Leary, president and CEO of Atlanta Beltline Inc. "We it bought out of receivership and are basically serving as the developer of last resort.”
He said the move won't detract from Beltline's primary focus on greenspace and transit but fits with a mandate to spend some of its money on housing.
Beltline Inc. was set up by the city of Atlanta as master developer for a 22-mile loop of mostly unused railroad tracks around the city. Most of the plan involves transit and parks, but Beltline also is supposed to set aside some money for affordable housing. Organizers wanted to keep existing residents of Beltline neighborhoods and attract middle income workers to the ring as development occurred.
Over the life of the $1.7 billion in bonding capacity for the Beltline, $240 million must be directed towards affordable housing, Leary said. So far, $8.8 million has gone into the Beltline's affordable housing trust fund.
While this is the first building Beltline has bought, the funds also have helped 50 families with down payment assistance. Beltline wants more families to take advantage of that program, Leary said. To qualify, a 2-person family, for example, cannot earn more than $68,300, must be buying a home within the official Beltline overlay district, must be able to bring $1,500 to closing, have a fixed rate mortgage and have good credit.
If they can meet all of the requirements, they may be eligible for down payment assistance that would get the mortgage and homeowner association fee on a loft to less than $1,000 a month.
“Affordable workforce housing has always been part of our mission,” Leary said. He added that the money allocated to housing “will be deployed to create more than 5,000 new homes, so that all residents, not just higher income residents, can afford to live in proximity to all the new improvements.”
Beltline has hired The Integral Group to prepare the lofts for sale, and The Marketing Directors to advertise and sell them under the new name "Lofts at Reynoldstown Crossing." A radio and web campaign targets potential buyers like teachers, firefighters and police officers.
Despite the soft real estate market, officials expect interest to be so high they plan a drawing on Dec. 10 to pick qualified buyers. Potential buyers must register by Dec. 7.
John Sherman, president of the Fulton County Taxpayers Foundation said affordable housing is “desperately needed in the county” but added he’s afraid the $2.8 billion Beltline project could leave taxpayers on the hook if the bonds that will fund the development are defaulted on.
“We feel the Beltline should be reconsidered for just the park and the greenway aspects and without pursuing the transit, or buying condominiums and reselling them, or getting involved in moderate-priced housing,” Sherman said.
The Beltline, however, says its bonds are backed by development that is already in the ground, and taxpayers aren't on the hook. The cost of buying and refurbishing the condo units will be made up by the sale price, officials say. The property includes an adjacent lot that could later be developed, adding to the tax base that helps fund the Beltline.
Bruce Gunter, who chaired the Beltline Affordable Housing Advisory Board that helped set the vision for the Beltline’s housing policy, thinks the purchase was creative and necessary.
“This is certainly not how anybody envisioned it to play out, that is to say buying it [the housing] directly,” said Gunter, who also develops affordable housing. But he added: “It’s consistent with the overall mission. I think it’s smart, creative and aggressive and the circumstances indicate it.”
John Coleman, director of housing development for Resources for Residents and Communities, was happy to see the Beltline buy the vacant building and put it within the reach of some of the workforce.
“Without the Beltline stepping in, this obviously had no shot at being affordable,” said Coleman. “The Beltline resources are what will make it affordable.”
Leary said the Beltline has no plans for further more condo purchases, unless another opportunity like this one crops up. He said his staff will remain focused on building parks and trails, working on next year's one cent transportation referendum -- which includes Beltline funding -- and preparing the transit piece. If voters approve the tax, the$2.8 billion Beltine project is slated to receive about half of Atlanta’s transit funds, or $289 million.
Beltline info:
The Atlanta Beltline is a 22-mile loop of largely unused railroad tracks that circle around the core of Georgia's capital city. Atlanta political and business leaders embraced a Georgia Tech graduate student's suggestion to make better use of those lines and began an effort several years ago to build more homes, office space, parks and trails and construct a light rail line along the Beltline. The effort is expected to take at least another decade before it is completed.
For more on The Atlanta Beltline, its housing assistance program, or the sale of the Reynoldstown lofts, go to:
http://beltline.org
http://homes.beltline.org
http://loftsatreynoldstowncrossing.com
For more on the Fulton County Tax Payers Foundation, go to:
http://fctf.org
