Atlanta Housing officials may be forced to sell off acres land that otherwise could have been used to develop affordable housing in order to raise several million dollars to settle a years-old legal dispute.
The move may be necessary because officials from U.S. Department Housing and Urban Development say federal funds cannot be used to settle the lawsuit filed during former Atlanta Mayor Kasim Reed’s administration. The lawsuit, against Egbert Perry of Integral Group, was dismissed.
Atlanta Housing has agreed to pay $1.8 million in legal fees and transfer 75 acres of prime city real estate to Integral Group.
On Friday, Integral Group attorneys filed a motion in Fulton County Superior Court to enforce the terms of the settlement agreement. The motion alleges that Atlanta Housing (formerly the Atlanta Housing Authority) had breached its terms and it is seeking additional attorney fees.
An Integral spokesperson said in a statement Friday that further attempts to stymie finalizing the settlement could wind up in a jury trial.
“If Integral and its partners choose to walk away from the settlement agreement, it will only be because we are walking into the courthouse to finish the fight that AH started,” the statement said.
In the waning days of his administration, Reed accused Perry in 2017, who had redeveloped four public housing projects into mixed-income developments, and former Atlanta Housing Authority Executive Director Renee Glover of engaging a secret backroom deal.
During the early 2000s, Perry pioneered mixed-income developments in Atlanta that became a national model for how to replace distressed public housing complexes.
The housing authority alleged in a lawsuit that Glover had given Perry options to buy 75 acres of vacant land around the housing projects for commercial uses at were severely undervalued prices that soared by millions as Atlanta’s real estate market boomed. Although real estate prices have risen, Perry has argued that his developments have also vastly improved the value of the vacant land.
The housing authority’s suit was ultimately dismissed.
Companies affiliated with Perry filed a counterclaim, but it was tentatively settled by the Atlanta Housing board in February. Reed attended one of the meetings to express his opposition.
In a letter dated in March, HUD said that it approved the terms of the suit settlement, but rejected a request to use federal funds to pay Perry.
Atlanta Housing Chief Operating Officer Eugene Jones Jr. denied on Friday that his agency was attempting to avoid finalizing the settlement. Although the agency is mostly federally funded, he said that money could be raised for the payments by selling agency-owned property.
“We are working with Integral,” Jones said. “We are working with HUD.”
He added that the regulations surrounding the property transfers were complex.
But the motion filed late Friday by Integral alleges that Atlanta Housing was avoiding finalizing the settlement.
“AHA’s behavior since ... the execution of the settlement agreement has been a classic display of eight months of obstinance, subterfuge and uncooperativeness in bringing this litigation to a conclusion,” the motion says.
In a statement Friday, Reed said he didn’t regret the lawsuit against Perry and that the suit should have never been settled.
“Ordinary folks deserve the right to live in the city that they help to build every day,” he said. In my opinion, history will show that it was the people of Atlanta who were harmed here.”