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Entangled in Vine City; 'The city lost control': Officials scramble to save project to renew Historic Westside Village
Atlanta Journal-Constitution
07/28/03
By David Pendered
Atlanta city officials are scrambling to salvage what they can of a major development project designed to restore a historic black community so blighted that heroin dealers and hookers work openly just blocks away.
Located near the Georgia Dome in an area known as Vine City, the Historic Westside Village was planned as a showcase of government-designed urban renewal. After 25 years on the drawing board, Westside Village was to open fully by 2002 as a mini-city providing up to 1,500 jobs, new housing, retail, offices, a multiplex movie theater and a six-story hotel.
But the project, with the Atlanta Development Authority as master developer, was loaded with so many expectations that it is imploding. The federal government has issued a scathing report on the city's oversight, the primary developer has pulled out, a bank has called for early payment of part of its loan because a construction deadline was missed, and the only buildings on the site house a Blockbuster, Publix, SunTrust branch bank and a restaurant where workers are finishing the interior.
"The city lost control of the project," is the blunt assessment in a recent audit by the federal Department of Housing and Urban Development, which provided a loan and grant to the project totaling $7.2 million.
The audit charges the city gave private developers land that should have been sold to pay off HUD loans, spent $1.35 million without competitive bids or contracts, lost records related to expenditures and paid above-market prices for some of the land.
A list of vendors HUD says were hired without competitive contracts include some key associates of former Mayor Bill Campbell. Among the records the city says are lost are those involving 23 land deals, plus general ledgers for 1994 through 1997, the audit says.
HUD's Office of Inspector General recommended to regional HUD officials that Atlanta be compelled to repay $1.35 million. This is the amount the audit alleges was spent on contracts that either were not put out for competitive bid or whose files are incomplete.
The alleged infractions are so serious that auditors recommended in their report that regional HUD officials consider permanently barring some of those involved in the project from ever again handling federal dollars. The city is trying to negotiate lesser penalties. HUD's report does not mention criminal sanctions.
The day-to-day development effort was overseen by Kevin Hanna, the former development authority president who resigned in December to take a similar job in Philadelphia. Hanna declined comment through his lawyer in Philadelphia, Edward Hoffman.
The project is so far behind schedule that Wachovia has demanded Atlanta pay $250,000 for missing a construction deadline the bank insisted on before issuing a $4 million loan.
The primary developer, Integral Group, has pulled out of the project. The company's president and chief executive, Egbert Perry, sent the city a letter saying Integral resented the "unfounded and negative cloud" the HUD audit places over Integral and that the company "had stayed on the project far too long."
Perry said in an interview: "Our decision was easy. Our withdrawal allows the city to rebid the project and get the project going without an ongoing cloud over it."
Despite the challenges, city officials see a glimmer of hope.
For starters, they say the area around Westside Village is wealthier now than a few years ago because of new residential construction and the demolition of a public housing project that was replaced by a mixed-income community.
The city's idea is to turn Westside Village over to the private sector, which the city's planning commissioner thinks is better at development than is government. Later this year, the city expects to issue requests for proposals to developers.
City still involved
This is a huge policy shift. The city plans for the ADA to relinquish the role of master developer, although it would continue to guide the project.
"We want to let the private development community identify the highest and best use and move this forward," says Charles Graves III, the city's planning commissioner whom Franklin recruited in November. "The problem in the past was ADA being the master developer."
This change would strip away many of the social engineering components of Westside Village that Campbell encouraged. Campbell had tremendous sway over the project because, as mayor, he chaired the development authority.
The authority never had developed a project. It took on that complex role after rejecting Integral Group's proposal to start with a small retail center. The development authority viewed that plan as not ambitious enough to revive what had been a vibrant commercial hub built by black entrepreneurs in the 1940s and '50s.
The main east-west street then was called Hunter Street and now is known as Martin Luther King Jr. Boulevard. Portions of the area remain a proud neighborhood that is home to the nation's largest collection of historically black colleges and universities.
Campbell clearly wanted the project to be bold and impressive. It would be one of his legacies in a city where he vowed to do all he could to help blighted neighborhoods.
He christened Westside Village a statement of African-American economic power. When the development authority got through with plans, the scope of work had skyrocketed from an initial estimate of $16.8 million to $140 million, according to the HUD audit.
The size of investment wasn't the only thing that got bigger.
The development authority layered on social goals that resulted in a vast majority of contracts for the development being awarded to black-owned businesses. Future tenants would be urged to hire nearby residents --- even if that meant creating training programs that cut profits.
Westside Village "symbolizes that black empowerment means more than political power," Campbell said in 1999. "It also means economic power."
The late Maynard Jackson, who was mayor when talk about reviving the area started in the 1970s, proclaimed when the city unveiled its project: "It's the most significant development in the black community in several generations."
Waiting four years
That was four years ago. Today, Franklin and her planning commissioner just want the project built.
So do the neighbors.
"It's needed, because we've got nothing over here," says Princeston Diamond, who lives in a small building next to the shuttered Atlanta International Worship Center, a few blocks from Westside Village.
Diamond embodies the challenges of redeveloping this neighborhood without public dollars. He says he got out of prison in October after serving time for selling crack cocaine on Boulevard, another tough area of Atlanta.
His home, owned by the church, has no electricity. That means there's no fan, let alone air conditioner, so he escapes the indoor heat by sitting outside on a folding chair. From there, he watches the church in his role as caretaker, hoping to ward off criminals.
"They shot at me back in March or April," he says. "They were breaking in the front door, and I chased them. They came back to the back door and started shooting at us. We found three .32-caliber shell casings."
Diamond says he tries to avoid the heroin dealers who trade beneath a tree a few blocks away, on James P. Brawley Drive. Some of the women constantly walking around the area bare their breasts to passers-by.
Diamond says the neighborhood really needs Westside Village to succeed.
"It's welcomed," he says. "The Publix has good sales, and when you're on food stamps you want to get the most you can. This area would support a movie theater."
Optimism reigns
Renee Glover, the head of the Atlanta Housing Authority, thinks Westside Village's problems will be solved. Demand for housing is high and new residents will have enough income to support existing and planned retail, she says.
The housing authority is doing what it views as its part to redevelop the area.
The authority knocked down the crime-ridden John Egan Homes and hired a Florida developer to build the Magnolia Park mixed-income community, adjacent to Westside Village. It is 95 percent leased and has a waiting list.
Just this month, the development authority approved $11.3 million in tax-exempt bonds to retool the old Harris Homes housing project, a few blocks from Westside Village, into a mixed-use community. The housing authority and Integral Group plan a $21 million development of 196 residences, a combination of market rate and subsidized units.
"Clearly the residential component drives everything," Glover says. "At the end of the day, the disposable income will impact how much retail is viable and the quality of retail. We're very excited about the long-term potential of that neighborhood."
Atlanta's planning commissioner, Graves, thinks the city can satisfy HUD and that Westside Village will be developed.
"We recognize we're going to have to stimulate the market by subsidizing some of the developments on the project," Graves says. "It's a good project with community support, city support, HUD wants to make it successful, and with that backing, I think we can move it forward."
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