When an Atlanta developer inked a deal in May 2017 to revitalize 145 acres of the former Fort McPherson, hopes were high the project would provide a boost to a slice of southwest Atlanta long starved for investment.
But two years later, the relationship between the government body overseeing Fort Mac and developer Stephen Macauley has soured, threatening to derail one of the city’s largest redevelopment projects in an area still reeling from the recession and the 2011 closure of the Army post.
Brian Hooker, the executive director of the McPherson Implementing Local Redevelopment Authority, or Fort Mac LRA, has called into question Macauley’s financial wherewithal, noting the collapse of Macauley’s business empire during the financial downturn. The agency also says changes to the agreement sought by Macauley and his partners would limit the public’s control and give the developer too much power.
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The dispute has also taken on racial overtones. In an April email to the agency’s chairman and others Macauley wrote that Hooker told him an adviser to Mayor Keisha Lance Bottoms said Macauley was being “‘coddled’ because I am white.” Macauley, in emails, alleges that Hooker hasn’t negotiated in good faith, has strung his team along for months and changed deal terms after the parties were near a crucial agreement in February needed to attract investors and banks to back the project.
Now both sides, through their lawyers, allege the other is in default of their agreement, documents and emails obtained by The Atlanta Journal-Constitution show.
The fracas could spill out before the public Thursday when the Fort Mac LRA board meets for the first time in nearly five months. That long delay in meetings is also part of the problem as the board until recently had too few members to hold a legal meeting.
Fort Mac LRA Chairman Cassius Butts told The AJC he and the board are committed to getting to the bottom of what’s going on. He said the board will demand answers Thursday of Hooker and Macauley and their answers will help determine if there’s a path forward to salvage the deal.
“Now that we as a new board are at full complement, we are committed to making sure this (development) is done and completed in a fair and transparent way,” Butts said.
Macauley did not provide comment for this story.
Fort McPherson, once home to the Third Army, U.S. Army Reserve Command and the United States Army Forces Command, closed eight years ago as part of a Department of Defense restructuring. The closure cost the region thousands of jobs.
Grand plans of converting the 488-acre site into a life sciences campus and mixed-use development were scrapped.
In June 2015, filmmaker Tyler Perry bought 330 acres of the site for $30 million and has since opened a sprawling film studio there.
The LRA retained about 145 acres for future development. In May 2017, Macauley was selected as master developer and crafted a master plan, won approval of regional planners and earned city and community backing for a total rezoning of the site.
The proposal includes retail, offices, hotels, a food hall, public spaces and about 2,400 residential units. Most planned residences would be reserved at rents affordable to people who make less than the area's median income.
Under the original terms, Macauley wouldn’t own the site, but would develop the land under a nearly century-long land lease.
But the proposed structure of the deal started to change several months ago and that seems to be the origin of the rift. Under Macauley’s new proposal, he and his partners would buy the vast majority of LRA land rather than lease it.
At a pivotal Feb. 21 board meeting, Hooker and Macauley were tasked with crafting a new agreement.
In emails and documents reviewed by the AJC, Macauley contends that essentially all key terms were agreed to in principle and that lawyers for his team and the authority were racing to draft a final agreement before an expected board vote on March 7.
Macauley wanted approval in early March to tap into investment funds created by a powerful federal tax incentive known as Opportunity Zones. Once official, the new deal would unlock all necessary investor and bank financing, he told the board.
In records reviewed by the AJC, Macauley’s team accused the authority of needless delays coupled with impossible deadlines to meet planning and other milestones.
Hooker, meanwhile, has said Macauley has been slow to provide the agency with financial information it needs to vet the project’s viability.
Hooker said the authority had misgivings about selling the land and losing control, particularly if the developer were to hit financial trouble, which might stall the project indefinitely. Macauley and his partners also wanted control of the LRA, with Macauley funding an agency that’s supposed to oversee the developer.
Those terms, Hooker said, were unacceptable.
Regardless, the March 7 meeting never happened, and the board hasn’t met since. Complicating matters, a board member left the agency, leaving it without enough members to hold meetings. Two new members are slated to be installed Thursday.
Hooker told the AJC the deal could still be salvaged but he said the redevelopment authority is concerned about Macauley’s ability to finance the project.
“Macauley has helped us create a compelling vision that has led to great interest in this property, and ideally he will see it through for us,” Hooker said. “If Macauley is unable to bring to bear the necessary capital to see through that vision, we would be well-positioned to find a new partner.”
Perry has a right of first offer for any land the LRA might sell. His spokeswoman declined comment.
‘We need to discuss’
The fight avoided public attention until earlier this month when longtime Atlanta business journalist Maria Saporta published a column on her website alleging Bottoms told Hooker and Butts in a Feb. 24 text message to “stop.”
Hooker and Butts told the AJC in separate interviews Bottoms didn’t direct them to stop, and text messages obtained by the AJC through an open records do not include such a directive from the mayor.
The communications show Bottoms wanted more information on the deal.
“We need to discuss before anything is finalized,” the mayor wrote. Hooker and Butts said they would follow up.
“That’s fine,” Bottoms wrote, “But I’m curious, at what point in the process were you planning on providing me a briefing?”
Saporta also reported that in March an adviser and mentor to Bottoms, attorney Alvin Kendall, indicated he didn’t want Macauley as the developer, insinuating race was a factor.
In an April 16 email, Macauley said Hooker told him that Kendall had said the developer was being “coddled” because of his race, and that the “LRA would have kicked out a black developer a long time ago.”
Hooker said Kendall’s remarks to him were misconstrued. Instead, Kendall asked if Macauley would be treated the same if he were a black developer rather than a white developer, Hooker said.
Messages for Kendall were not immediately returned. Bottoms’ office declined to answer specific questions about the negotiations.
In a statement, Bottoms spokesman Michael Smith said “There is a new administration with a new set of eyes who believes there is no harm in taking a fresh look at a major real estate transaction that has such a vast economic impact for the city of Atlanta.”
The story so far
In 2015, filmmaker Tyler Perry acquired most of the closed Fort McPherson. About two years later, the government agency overseeing redevelopment signed developer Stephen Macauley as its master developer for the remaining 145 acres. Emails and other records obtained by the AJC show the relationship between Macauley and the agency have soured and a Thursday meeting could prove pivotal to the future of the project.
Meanwhile, a separate real estate company is under contract to buy a former military command building on the post and plans to lease it to the U.S. Food and Drug Administration, which would relocate its Atlanta lab and 350 highly paid personnel from Midtown. That deal is slated for a vote Thursday.
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