Lawsuit: Dispute over land led Reed officials to threaten developer

Egbert Perry, CEO of The Integral Group, alleges that members of Mayor Kasim Reed’s administration threatened his ability to business with the city during a meeting over disputed property in 2014. J. SCOTT TRUBEY/STRUBEY@AJC.COM

Egbert Perry, CEO of The Integral Group, alleges that members of Mayor Kasim Reed’s administration threatened his ability to business with the city during a meeting over disputed property in 2014. J. SCOTT TRUBEY/STRUBEY@AJC.COM

Senior members of Mayor Kasim Reed’s administration allegedly threatened a prominent developer that he would never again do business with the city unless he relinquished a claim to property the city wanted for a new recreation center, according to court papers filed Monday.

The filings allege the threat was made during a meeting between Reed’s former chief operating officer, his parks commissioner and developer Egbert Perry, CEO of The Integral Group, on May 21,2014.

If Perry didn’t give up his claim to the property, “We will make it difficult, if not impossible, for you to do business in the City of Atlanta,” the city’s then-chief of staff told Perry, according to the filing.

The allegation emerged as part of a lawsuit and political battle between the developer, Reed, and Atlanta Housing Authority. At stake is control over at least tens of millions of dollars worth of the authority's vacant land, much of it in rapidly gentrifying neighborhoods close to public transit and jobs.

A Reed spokeswoman fired back against Perry and what she called “his immoral and repugnant behavior” in a written statement to The Atlanta Journal-Constitution.

“Egbert Perry is lying,” the statement said, accusing Integral of trying to make “a windfall profit at the expense of Atlanta’s low-income families.” The statement did not directly address whether the threats were made.

In 2011, AHA's prior leadership gave companies tied to Integral an exclusive right to purchase the land, including the property Reed sought for the recreation center, for several years. Now AHA wants out.

The city faces an affordable housing crisis, and the contracts held no guarantee that Perry would build housing for low-income and working-class residents. AHA estimates that the deal gives Integral a $120 million discount on the land, a figure the developer disputes because no formal appraisal has been done.

The housing authority's current leadership filed suit in September to kill the agreement. In October, Reed weighed in publicly with a blistering letter to Perry demanding he resign his post as board chairman of home finance giant Fannie Mae over the deal, which he described as "unlawful" and "unethical."

Perry argues that there is already too much affordable housing on these siteswhich previously held public housing projects. Building more affordable housing would re-concentrate poverty on the sites where new, mixed-income housing was built to break it up. Also, AHA has plenty of other vacant land, Perry said.

“During the past eight years AHA has owned, and continues to own, over 300 acres of land on approximately 12 other former public housing project sites, all of which continue to sit vacant and untouched,” Perry said in a written statement.

Michael Geisler, then the city’s chief operating officer, delivered the alleged threat in a meeting with Perry, lawyers for Integral state in their court filing. AHA’s Joy Fitzgerald, then the interim head of the authority, and Atlanta Commissioner of Parks and Recreation Amy Phuong were there as well.

“Mr. Geisler then repeated the message verbatim and Ms. Phuong confirmed that he had accurately relayed the message,” the filing states.

Attempts to reach Geisler by telephone and email were unsuccessful. Fitzgerald said she was out of town visiting family and did not have time to comment. A city spokeswoman did not make Phuong available to speak before deadline.

Current AHA CEO Catherine Buell said through a spokesperson that she was unaware of any such threat to Perry. AHA Director of Communications Cecilia Taylor stressed that the authority’s land should be used in the public’s interest.

“It’s unfortunate that AHA would have to plead with any of our development partners to use public land for public benefit,” Taylor said.

Grady LLC, the entity related to Integral, gave up its rights to build on the natatorium site in exchange for more than $1 million in credit that it would use to purchase land involved in the 2011 deal, according to records of AHA minutes submitted with Monday’s court filing.

The $24.4 million Martin Luther King Jr. Recreation & Aquatic Center opened on the disputed site late last month.

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