An independent investigation of Roswell’s Oxbo Road project found extreme mismanagement that is costing the city millions of dollars.
The city is realigning Oxbo Road and nearby side streets and intends to build a safer intersection with South Atlanta Street. But work on the closed road stopped months ago. The project costs have zoomed past its $9 million budget to reach almost $14 million. In February, Roswell Mayor Lori Henry launched an investigation into mismanagement of the project.
A report by Jarrard & Davis law firm, hired by Roswell to look into the troubled project, found delays and cost overruns are the result of several factors including the failure to have a project manager, no utility relocation plan and failure to follow proper steps to purchase private property or access rights.
Henry released a statement on the investigation late Thursday afternoon and a link to the law firm’s findings.
“Mayor and Council were aware there were issues with the Oxbo Realignment project because of delays in construction,” Henry said in the statement. “However, I was surprised and disappointed to learn in the report of the extent of the issues with this project, particularly with the right-of-way acquisition.”
Councilwoman Christine Hall said she was shocked by the findings.
“It’s a travesty for the citizens,” she said. “This is horrible that anyone would operate in this manner.”
The Oxbo realignment is currently funded via a transportation special purpose local option sales tax project approved by voters in 2016.
The project’s timeline dates back to 2006 when it was included in the Transportation Master Plan, according to the law firm’s report. In 2009, the city paid $122,000 for a land survey and initial engineering services for the project.
In February, officials estimated Oxbo Road was costing the city nearly $14 million — a significant increase from the original budget of $9 million — due to issues including a $2.5 million legal settlement paid to property owners. The settlement was paid to Jason, Alfred and Benita White, family owners of Roswell Hardware Company, formerly located at the corner of South Atlanta Street and Oxbo Road. The city had defaulted on a temporary property ownership agreement after paying the family $3 million in 2017.
Residents have called the project located near historic downtown Roswell an “epic failure.”
The Jarrard & Davis investigation report shows several payments to property owners over the years from less than $10,000 to hundreds of thousands of dollars for the city to acquire easements or outright ownership. That was often necessary in order to relocate Georgia Power utility poles, according the city and the report.
In conducting transactions for property, the city didn’t follow state law, the report said. The investigation found properties were not appraised properly to set a basis for “just compensation” before beginning negotiations with owners.Given the numerous transactions, Councilwoman Hall said it’s difficult to trust the project’s inflated price tag.
“I don’t have confidence in that $14 million number … based on the sloppiness and lack of accountability and lack of responsibility for this project,” Hall said. “I would have to revisit (the expenses) to see what makes up that $14 million. It might be right. It might not be.”
Councilman Marcelo Zapata said that in addition to Oxbo Road he’s concerned about management of other major projects in Roswell such as the $50 million Roswell Historic Gateway Project.
“It’s very unfortunate what happened (with Oxbo), but people saw this coming,” he said. “We cannot make the same mistakes moving forward.”
In releasing the report to the public, Henry wrote, “...The report provides a number of recommendations that the City will be implementing immediately. I want to assure our citizens that the issues outlined in this report will never happen again. We will be looking at everything including process, procedures and personnel.”
The full investigation report by Jarrard & Davis can be found on the city website roswellgov.com/government/mayor.
Three “problems” cited in the investigation
In 2010, Roswell agreed to purchase an “old” 18-unit apartment complex at 15 Oxbo Road from a private owner for $700,000. The city appraised the property after the sale. That appraisal said that property was worth $700,000, but the city also agreed to give the apartment owner another city-owned lot that was sold in 2017 for $430,000.
In 2017, Roswell agreed to acquire the Roswell Hardware store property at 685 Atlanta Street for $3 million with the understanding a portion of the property would be returned to the owner in a developable state by 2020. The city failed to do so and paid the owners another $2.5 million to settle all claims.
In 2018, Roswell paid a company $300,000 for properties on Maple Street, including some it did not own. The city later paid the actual property owner another $375,000 for property and to remove buildings. The report says the company did not refund any money and the city has suffered at least $299,000 in damages.
