People hang around the entrance to the homeless shelter on Pine Street near the intersection with Peachtree Street in Atlanta. (Jason Getz / AJC file photo / December 2011)
Photo: Jason Getz
Photo: Jason Getz

Controversial homeless shelter allowed to continue court fight to survive

The Georgia Supreme Court on Monday allowed the Metro Task Force for the Homeless to continue its legal battle to regain possession of its controversial shelter at Peachtree and Pine streets.

In a unanimous opinion, the state high court said a jury should decide whether the foreclosure sale of the task force’s building was illegal. The court also said a jury should decide whether business leaders conspired to interfere with the task force’s donors to deprive the shelter of the funding it needed to stay afloat.

“I’m delighted,” Steven Hall, the task force’s attorney, said of the opinion.

On Sunday night, 505 people — 400 men and 105 women and children — slept at the shelter, safe from the below-freezing temperatures outside, Hall said. “Now they will get their day in court over this whole thing. I couldn’t be more pleased.”

Attorney Steve Riddell, who represents Central Atlanta Progress, one of the defendants in the case, also expressed satisfaction with the decision.

“The vast majority of the claims brought in this case have now been thrown out,” he said. “We wish the court had thrown out the last few claims, but we’re fully prepared to go try these issues. We think the jury will hear the story that the task force was unable to pay its bills long before this alleged conspiracy happened.”

Attorney Lee Clayton, who represents another defendant, the Atlanta Downtown Improvement District, said he shared Riddell’s thoughts and was also pleased with the ruling.

The highly contentious litigation over the Peachtree and Pine shelter has been ongoing for more than five years and involves the task force’s inability to pay its bills. The shelter’s financial troubles became embroiled in litigation in 2010 after Ichthus Community Trust bought the notes on more than $800,000 in loans owed by the task force.

After the task force missed payment deadlines, Ichthus foreclosed on the property and put the shelter up for bid on the courthouse steps on May 4, 2010. Ichthus, as the sole bidder, bought the property but later transferred its interest to another company.

After buying the property, Ichthus sought possession of the shelter and eviction of the task force. But the task force countersued, alleging claims such as wrongful foreclosure, racketeering, illegal interference with business relations and slander.

The task force filed a separate lawsuit, alleging many of the same claims against a number of other parties. These included: Central Atlanta Progress, the Atlanta Downtown Improvement District and businessman Emanual Fialkow.

Attorney Matt Moffett, who represents Fialkow, said his client is a respected businessman and philanthropist who did nothing wrong. “We are confident that a jury will vindicate his reputation against these unfounded claims,” he said.

In its litigation, the task force alleged that, since 2006, a group of powerful business interests conspired to drive the task force off the property by destroying its relationships with public and private donors and using its weakened financial position to acquire the notes secured by the property.

Justice Robert Benham, who wrote Monday’s opinion, said the crux of a key claim lodged by the task force is whether the defendants improperly influenced the mayor’s staff to write letters to the state that recommended it cut off funding for the task force. “For example,” Benham said, “there is evidence, in the form of an email, that defendants wanted to ‘shut off’ the task force’s public funding and wanted to apply ‘continued pressure’ to achieve that goal.”

The shelter was in the news this summer, when Mayor Kasim Reed said he wanted to close it down for health reasons. He called it one of the leading sites for tuberculosis in the nation. In response, the task force’s executive director, Anita Beaty, said the shelter was “100 percent compliant” with federal protocols for spotting, treating and avoiding the spread of TB.

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