The real estate gold rush ignited on Atlanta’s Westside by the Beltline and what will become the city’s biggest park has triggered a war between a well-known home builder and one of northwest Atlanta’s largest land holders.
Steve Brock, the founder Brock Built Homes, is suing real estate investor and broker Gregory Todey, accusing his one-time partner of essentially duping him out of his interest in dozens of acres near the future Westside Park at Bellwood Quarry.
Brock’s complaint, filed this month in Fulton County Superior Court, lays bare how investors hoped to cash in on depressed real estate prices and distressed properties near the park and the Beltline, the 22-mile loop of trails and future transit. The infusion of cash from speculators into one of the city’s more impoverished areas has already led to widespread displacement of longtime African American residents, community groups say.
The Westside Park’s $26 million first phase is expected to open this spring, and it will connect to a future section of the Beltline. In anticipation, speculators have spent more than $100 million in recent years buying nearby property, and the hype surrounding big projects like Quarry Yards could attract hundreds of millions more in investor cash.
Brock, who is seeking more than $11.5 million in damages, alleges Todey induced him into spending millions buying property and hiring consultants to craft a sweeping master plan including apartments, blocks of townhouses and detached homes, parks, schools and retail. The development they envisioned lay near Quarry Yards and the Beltline.
But the lawsuit contends Todey, while in partnership with Brock, secretly worked with Brock’s competitors to steal his plans and elbow him out as lead developer.
Efforts to reach Todey were not successful and a lawyer was not listed for him in the case file. Brock directed a reporter to his attorney, Brian Daughdrill, who did not respond to a reporter’s questions.
The suit and hundreds of pages of exhibits describe how the partners secretly crafted a master plan spanning 1,250 acres over several neighborhoods, including on land they hadn’t yet acquired.
“I was reluctant to do planning on land that we do not control,” Brock wrote in a November 2016 email from the court case. He added, “we are still flying under the radar, but this will only (last) a short time.”
Distressed properties targeted
Neighborhoods near the Proctor Creek Greenway and the future Westside Park have seen rampant speculation as investors such as Brock and Todey buy and flip aging homes and assemble vacant lots to build new homes.
Brock Built is an active builder in the area, selling $400,000 town homes in the English Avenue neighborhood and houses for $600,000 and up just north of the future Westside Park.
Todey, meanwhile, is a well-connected broker who helped a group known as the Northwest Atlanta Land Fund and related companies acquire hundreds of acres of land on the Westside. The land fund’s partners include Quarry Yards developers Mark Teixeira and Joel Bowman, who are not a party to the lawsuit.
Todey spent years assembling future development parcels on the Westside, and cleaning up titles on distressed properties in the largely poor black neighborhoods. He identified the potential early on for future development near Bellwood Quarry.
“He was ahead of the curve,” said Justin Bleeker, executive director of Grove Park Renewal Inc., a community nonprofit focused on stabilizing low-income residents in affordable housing. “He created the curve in some sense.”
Investor alleges millions lost
As the partners accumulated land, Brock took the lead role in zoning property and attempting to build community support, the lawsuit said.
Todey agreed to manage property under their control and said he could sell land to Brock from the Northwest Atlanta Land Fund at low prices, the suit said. Todey also told Brock he would form an investment bank to finance their plans, and had secured $100 million in funding, including from foreign investors under a federal immigration program known as EB-5, the lawsuit alleges.
EB-5 allows foreign investors to receive permanent U.S. residency if they invest in American business ventures. Recent changes raised the minimum investment to $900,000 for certain economically distressed areas.
Critics say it lets wealthy foreign nationals buy their way into the country.
A central piece of the lawsuit alleges Brock was defrauded out of his interest in distressed loans on properties making up a key piece of the project.
Brock alleges he paid $880,000 for $6 million in distressed loans on more than 50 Westside properties.
Brock alleges he assigned the debt to Todey with the understanding Todey would foreclose on the loans and sell the property to Brock at significantly reduced prices. The business arrangement would allow Brock to avoid the messy work of foreclosure and cleaning up title issues often prevalent in impoverished neighborhoods.
But the terms were not spelled out in a contract.
Todey didn’t foreclose for several years, the complaint said, allowing the distressed borrower to eventually pay back the loans and retain ownership. Brock alleges that cost him $5.1 million.
Todey, meanwhile, brought in other development partners and formed a new company that sidelined Brock, the lawsuit alleges.
Teixeira, a former Braves and Georgia Tech baseball player, said Todey served as Northwest Atlanta Land Fund’s broker.
Todey is not a partner in Quarry Yards and Quarry Yards property is not involved in the lawsuit, Teixeira said.
“We were pitched to invest in their partnership, and we were not interested,” he said.
Quarry Yards recently broke ground on its first phase, which will ultimately include 850 apartments, with 180 units reserved as affordable. It also will feature more than half-a-million square feet of office space, a hotel and shops and eateries.
Quarry Yards sparked a social media outcry last year for marketing materials that showed mostly white people. One page featured the phrase “A Community Created For The New Atlanta,” over an image of white adults lounging in a conference room.
The brochure was quickly revised with a new photograph depicting a young black woman addressing four seated white people looking up to her. The newpage said, “A Destination Created for One Atlanta.”
“One Atlanta” is the title of a city office established after Mayor Keisha Lance Bottoms took office with a stated purpose of promoting equity, diversity and inclusion.
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