A rebirth deferred

Oft-delayed Westside project hits another snag

BY KEVIN GRIFFIS

Published 05.02.01

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Rebecca BeardA field of dreams lies fallow on Martin
Luther King Jr. Drive.A half-century ago, the
neighborhood around Hunter Street, in the city’s
southwest side, was an idea factory. Even after the
area’s commercial heart had eroded, the roots of black
political power held strong here. W.E.B. DuBois taught
at Atlanta University. Martin Luther King Jr. studied
at Morehouse College and lived on Sunset Avenue.
Maynard Jackson Jr., who would become Atlanta’s first
black mayor, grew up here. The city’s first black high
school was founded in this neighborhood.
Here, small mom-and-pop businesses — dry cleaners,
shoe stores and restaurants — catered to the
merchants who owned shops on Auburn Avenue but who
came home at night to homes in the Hunter Street
neighborhood.

But with integration and the opening of white-owned
stores to black customers in the 1960s, commerce on
Auburn and Hunter dried up.

Today, businesses along the stretch of Hunter (now
known as Martin Luther King Jr. Drive) between Ashby
Street and James P. Brawley Drive simply soldier on.
The buildings have a dog-eared charm, but when
compared to developments on the city’s northside, they
appear shabby and transplanted from another era.

There are no grocery stores here, no movie theaters.
If there’s such a thing as upscale, this is down.

The Historic Westside Village aims to change all that,
to breathe new life into sagging lungs. The Village is
a $130-million, 15-acre development envisioned along
MLK with its northern border on James P. Brawley. In
this predominantly black neighborhood, most of the
development will be handled by black-owned companies,
which should get a boost from $9.2 million in federal
money delivered through the city’s Empowerment Zone.

City officials envision the complex as the site of
91,000 square feet of retail space, a Publix grocery
store, 101 apartment units, 66 loft apartments and 60
three-story townhomes. Planners project 1,200 to 1,500
jobs will be created, 600 for Empowerment Zone
residents. Put simply, it’s the most expensive and
ambitious project in southwest Atlanta’s history.

“You cannot state the importance of revitalizing that
area enough times,” says Atlanta City Councilman
Michael Bond, whose district includes the Martin
Luther King Jr. Drive corridor. “That area is just
dripping with history — not just for
African-Americans but for all of Atlanta.”

But the project has hit snag after snag. The grocery
store and office building were supposed to be built by
last summer. That was delayed; workers aren’t expected
to lay the foundation of the buildings until next
month. The project’s biggest hurdle, though, came this
month when the Atlanta Development Authority, the
city’s economic development arm, realized it had
failed to follow federal rules that would allow it to
pay off a private loan that jumpstarted the
development.

To remedy the problem, the ADA is planning some
last-minute legal gymnastics. If they don’t work, the
plan to build a Publix grocery store, the
development’s anchor tenant, is thrown into question,
and the whole deal could break apart.

But there’s more than just economic implications at
stake here.

“This area was once the mecca of African-American
commerce in the ’30s, ’40s and ’50s in the South,” say
Atlanta Development Authority officials in an e-mail
response to CL questions. “In the ’60s, it was the
area where the leaders of the civil rights movement
met to plan strategy.”

And Paschal’s, a hotel and restaurant, was at the
center.

Black political power “was centered at Paschal’s at
breakfast time — when a host of politicians and
would-be politicians [came] there to eat and interpret
the day’s news,” says Julian Bond, Michael’s father
who served in the U.S. Congress and is now the
chairman of the NAACP’s board of directors.

Today, Clark Atlanta University owns the hotel and
uses it for student housing. But the restaurant is
still there.

If you venture by the Westside Village site today, an
impressive artist’s rendering of what the development
will look like stands over a field of calf-high grass.
In a few spots, the ground is orange where dirt has
been turned over — the only construction work done so
far on the project.

That bulldozing work and other predevelopment costs
were paid for by a $3.325-million “bridge loan” from
First Union to the ADA. It was intended to “bridge”
the gap between when work was supposed to begin and
the awarding of federal money from the Atlanta
Empowerment Zone to the ADA.

With a private loan, the ADA didn’t have to advertise
in newspapers, as federal procurement guidelines
mandate, for the predevelopment work, according to
state sources. Instead, ADA just sent out a flier to a
handful of companies. Thrasher Trucking handled the
excavating work, which started in the spring of 2000.

(Thrasher Trucking also donated money to Mayor Bill
Campbell’s 1997 re-election campaign and another
$15,000 to a fund created by Campbell to fend off
court challenges to the city’s affirmative action
program. Campbell also is chairman of the ADA board.)

But the plan all along was to repay First Union with
federal money. To do that the ADA would receive money
– now in the form of a 20-year loan — through the
Atlanta Empowerment Zone. Its board OK’d the use of
federal money for the Westside Village project in
1998.

But to accept federal money, the ADA had to follow
federal procurement guidelines from the beginning,
meaning it had to advertise the availability of the
site-clearing contract. It didn’t, and now the federal
money is in jeopardy, and that puts the project in
jeopardy.

ADA claims “administrative oversight” caused the
procurement problem, says an official familiar with
the project who requested anonymity. Somebody didn’t
pay attention to federal guidelines.

With a June deadline to repay the loan looming, the
ADA hopes it has found a way around the problem:
create a private, for-profit company that doesn’t have
to follow procurement guidelines.

As it is currently envisioned, the ADA wants to create
a for-profit company, Inner City Development
Corporation, with Harold A. Dawson and The Integral
Group — the Historic Westside Village’s primary
developers — that would receive the federal loan. The
new limited liability corporation would be run by the
ADA. The big question is whether the ADA can legally
do it. The loan might depend on the answer.

Some are pretty sure the outcome already has been
decided in Georgia courts.

“Does a governmental entity have the authority to
create a for-profit? The answer is a categorical,
‘No,’ ” says the official familiar with the project.

“We’d like to have an independent legal opinion, not
the ADA’s or the city’s attorneys; there’s not enough
arm’s length there,” says Fred Van Dyck, a former
program manager with the state Department of Community
Affairs who left the department Monday. “You can’t
allow the state to facilitate an end-run around
procurement regulations by creating a for-profit. We
want to make sure this is done legally.”

Van Dyck’s former boss, Chantal Matthews, the head of
the Department of Community Affairs’ Business and
Financial Assistance Division, takes it a step
further. She says the Department of Community Affairs
needs an opinion from the state Attorney General’s
office.

Matthews must sign off on the loan, and with Van Dyck
leaving, it isn’t likely there will be immediate
action.

The other thing the ADA could do is to contact the
federal Department of Health and Human Services, which
administers the country’s Empowerment Zone programs,
and see if it will waive procurement requirements.

But that’s not likely to happen, says the unnamed
official familiar with the project. It might have
under Clinton, “but I’m not sure anyone in this
administration is going to stick their neck out.”

The final wrinkle in this mess is the matter of a
second loan still pending with First Union. That loan
is supposed to fund the building of Publix’s store,
but if the first loan isn’t being paid off, First
Union will not close on the second loan — at least
that’s what the state has been told. First Union
officials could not be reached for comment.

The ADA, though, remains optimistic the deal will go
through even if this phase of the federal funding
falls apart. Say ADA officials: “It certainly makes it
a more difficult deal.”

kevin.griffis@creativeloafing.com