Fresh Loaf

Paul Donsky of the AJC reports that Wachovia Bank has filed a lawsuit against Wayne Mason, the Gwinnett County developer who in 2008 made a windfall off Beltline property in Northeast Atlanta. The lawsuit stems from a $7.5 million loan that Mason took out in 2004 to buy three units in Buckhead medical office building.

According to the lawsuit, filed Monday in U.S. District Court in Atlanta, Mason failed to pay $7.07 million remaining on the loan that came due in February. The lawsuit names both Mason and a company he controls, Lone Pine, as defendants.

In a statement issued through a spokeswoman, Mason said he received a copy of the complaint Wednesday afternoon.

“Our lawyers will be reviewing its allegations and we’ll respond accordingly,” he said.

Documents included in the lawsuit say Mason and Lone Pine borrowed the money to buy three units at the Palisades at West Paces, a medical office building near I-75 and Northside Parkway. The lawsuit did not say what Mason did with the property.

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The vacant building that once housed the notorious Gold Club could again become a nightclub – providing nearby homeowners drop their opposition.

On Tuesday evening, Buckhead’s Neighborhood Planning Unit B gave a thumbs-up to a proposal by a group calling itself F & C Buckhead Investments to reopen the property at 2416 Piedmont Road as a new nightclub.

It was the applicants’ second appearance before the NPU. Last month, admits partner Jonathan Clay, they weren’t prepared to answer details questions about landscaping plans, floor plans, management team, etc.

“People had concerns just based on the history of the property,” says Jeff Shell, the NPU chairman.

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STILL GOING Dispute over Beltline tracks riles residents

After two hours of debating administrative minutiae, the Georgia Department of Transportation board nearly brought an end to the bitter dispute the state agency and Amtrak started with the City of Atlanta over Beltline tracks near Piedmont Park.

At the end of today’s board meeting, Boardmember David Doss of Rome — who it should be noted, hasn’t always been the biggest advocate for rail projects — asked the board to consider withdrawing its stay of abandonment of the “Decatur Belt,” a 4.2-mile segment of unused tracks which stretch from Ansley Park to DeKalb Avenue. Those tracks are a vital piece of the Beltline, the 22-mile loop of parks, trails and transit proposed to circle Atlanta’s core. Amtrak and GDOT say they want the tracks preserved for future commuter rail service into downtown Atlanta.

Doss said he proposed the same motion yesterday at an intermodal committee meeting.

“The idea of commuter rail or high-speed rail going through Piedmont Park makes little sense to me,” Doss told boardmembers. He said the two modes are not compatible with plans the city has already made for the property, which it purchased from Gwinnett County developer Wayne Mason last year for more than $66 million.

Suddenly, a booming voice sounded from the ceiling. Boardmember Steve Farrow of Dalton, participating in the meeting via conference call, objected.

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HIT THE BRAKES Beltline faces another obstacle — from GDOT and AMTRAK

If there’s one thing we’ve learned about the Beltline, the 22-mile loop of parks, trails and transit proposed to circle Atlanta, it’s that surprises are to be expected. And some interesting developments are afoot with the $2.8-billion project.

If you recall, Atlanta Beltline Inc. — the nonprofit agency in charge of planning and implementing the project — finalized its purchase of a 66-acre piece of property in October owned by Gwinnett County developer Wayne Mason and his son Keith, an Atlanta attorney. The Mason property included  land and transit right-of-way. The $66 million purchase riled city watchdogs not only for the ultimate payout to the Masons — more than double what father and son originally paid for the land in 2004 — but also the deal ABI cut with a private partner group it needed to buy out if it wanted to use tax-exempt bonds to finalize the purchase before a Halloween deadline. That’s background, and for all intents and purposes, irrelevant for the moment.

Beltline leaders hoped to complete planning the area, implement transit, and sell off excess land to developers. They would then re-invest the windfall from those sales back into the overall project. But before it could do anything with the property, it first had to abandon the transit right-of-way. That humdrum process is conducted by the U.S. Surface Transportation Board and largely involves just some time for public comment and a shuffling of papers. It was supposed to be a walk in the park.

Looks like that’s not turning out to be the case. An eleventh-hour move by the state Department of Transportation and AMTRAK has potentially thrown a wrench in the Beltline. And why those two odd entities decided to hold hands and insert themselves into the conversation — this late in the party — is making folks scratch their heads.

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Consider, for instance, recent negotiations to purchase the northeast quadrant of the Beltline, a 22-mile loop of transit and trails that will one day circle the city.

That deal — and the history of the controversial plot of land — has resulted in the city parting ways with two developers and paying millions of dollars that critics say was squandered.

Mike Dobbins, a Georgia Tech professor and Atlanta’s former planning commissioner, says the city rushed to pay Gwinnett County developer Wayne Mason and his son Keith $65 million for land that could have been had for much, much less.

“Buying out Mason was a flawed proposition,” Dobbins says. “I mean, name me anyone who wouldn’t love to make a 300 percent profit in three years on a $25 million investment. It’s crazy.”

Says Keith Mason: “I’m pleased with the outcome.”

Read the rest of this story.

(Photo by Jim Stawniak)

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Congratulations, fellow citizen! If things go according to plan, come Friday at 10 a.m. you’ll be a co-owner of 66 acres of prime property in Northeast Atlanta.

The Atlanta City Council today approved 9-1 the issuance of $64.5 million of Beltline TAD bonds. Councilmember Felicia Moore was the lone vote against the deal.

Atlanta Beltline Inc. Finance Director Richard Lutch says the project will meet the Oct. 31 deadline set by Gwinnett County developer Wayne Mason and settle the $45 million debt Mason is owed for property near Piedmont Park.

Beltline leaders will also use $3.5 million of the bond funds to buy out the remaining stake in the property held by Barry Real Estate and Ben Rainey, its private partners in a joint venture that was created to purchase the land from Mason late last year. Beltline leaders must then must transfer the property to the Atlanta Development Authority. (The land must be owned by a public agency to meet tax-exempt bond regulations.)

After the vote, Tax Allocation District Advisory Committee Chair Eugene Bowens, Sr. said that the citizens’ group — while supportive of the deal — still feels it’s not being involved enough in how funds from the TAD bonds are used. By law, the committee is charged with ensuring those public funds are spent in a “fair and equitable manner.” Numerous times in the past — most notably when Beltline leaders decided to spend a large chunk of funds to pay off the Mason property in affluent Northeast Atlanta — the committee has said they have been kept out of the loop. He said TADAC members were only notified of today’s bond deal at a meeting last night with Beltline leaders.

This development raises many questions, such as what direction the project takes now and where it will focus its energy, how the city plans to act on property that it must rezone if it plans to sell, and how future allocations and deals will be handled. Feel free to chime in below if you have any thoughts.

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If Atlanta City Council gives them the OK, bonds set to be issued this week to pay for Beltline projects will be worth $64.5 million — a much lower amount than the $117 million initially anticipated before bond markets ground to a halt because of Wall Street’s meltdown.

Atlanta Beltline Inc. CEO Terri Montague says more bonds will be issued in mid-2009. The tax-exempt bonds will be split in half and sold to Wachovia and Suntrust with a 6.2 percent interest rate. She says the reason the offering is much smaller is because debts — most notably, the Wayne Mason property in the 22-mile project’s northeast quadrant — must be paid. Additional bonds are planned to be issued in in mid-2009. Montague says the affordable housing component will receive roughly $8.5 8.8 million.

Beltline leaders will also have to buy out Ben Rainey and Barry Real Estate, its private partners in a joint venture that purchased the 66-acre Mason property, to meet regulations established for tax-exempt bonds. Montague says the two partners agreed to settle for $3.5 million — they originally wanted $10 million.

Beltline officials appear before Atlanta City Council at 3:30 p.m. to seek its approval before proceeding with the deal. Should City Council fail to approve the bond offering, the city would lose both the property and $26 million its already paid to the Masons.

Should voters approve Amendment 2 on the General Election ballot, Montague says, the next Beltline TAD bond offering could potentially be much larger.

More updates to come.

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Sources tell CL that Atlanta City Councilmembers were given notice that a special-called meeting will be held at City Hall tomorrow at 3 p.m. Details are vague, but the event could mean developments are underway for the 22-mile loop of parks, trails, transit.

Why? Well, as we’ve been reporting, the Oct. 31 deadline for Beltline leaders to settle the debt on property purchased from Gwinnett County developer Wayne Mason is drawing near. The property — a 66-acre parcel of land and transit right-of-way located near Piedmont Park in the project’s northeast quadrant — generated controversy this summer when Beltline leaders decided to allocate nearly half the TAD bond funding to settle the debt. If it’s not repaid, the Mason property could enter foreclosure.

Because of the virtually shutdown bond market, those TAD bonds have been delayed until the project’s financial wizards could secure the best possible deal. Beltline leaders would most likely have to brief City Council on their progress.

Regardless, we’ll be there and update once we hear word.

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Beltline bonds scheduled to be priced this week have been delayed until mid-October, a spokesperson for the 22-mile loop of parks, trails and transit says. Project leaders say the bonds — estimated to be worth $117 million — are now scheduled to be issued the week of Oct. 20.

Timing is of the essence, however, as that issuance cuts close to an Oct. 31 deadline to settle outstanding debt on a vital piece of property in northeast Atlanta near Piedmont Park. The property includes transit right-of-way and was purchased late last year from Gwinnett County developer Wayne Mason and his son, Keith. The decision to allocate the majority of Beltline bond proceeds to the Masons was opposed by community groups, but ultimately determined necessary to ensure the future of the project.

Should Beltline leaders not settle the Mason debt by the deadline, the property could risk foreclosure, placing valuable intown property on the real-estate market and in turn, making it harder to secure.

The national market for municipal bonds — for years the go-to financing mechanism that’s kept cities apace — has been essentially closed since the fallout on Wall Street, leaving many projects as grand as the Beltline and as everyday as highway repairs in a lurch. Athens-Clarke County recently put three long-planned sewer treatment plants, to be paid for with bonds, on the backburner until the market improves.

Atlanta is currently sitting on four upcoming bond issuances: The Beltline and Perry Bolton TAD bonds, the General Obligation refinancing bonds, and the Downtown Redevelopment bonds. Dana Boone, the city’s debt and investment chief, says most buyers in the market are hesitant to make purchases until Congress acts on the controversial bailout package. (The U.S. Senate approved the $850-billion, 450-page package last night.)

“The belief is that there are not a lot of issuances going out to market and postponing deals because there aren’t a lot of buyers in the market,” Boone says. “The costs would be too high. The issuers that are pursuing bond issuances are those with high needs.”

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A Beltline advisory committee charged with ensuring the 22-mile project sticks to its vision of connecting Atlanta in an equitable manner told Beltline leaders the project should not spend a large chunk of its first allocation of funds on a vital piece of property that runs along Piedmont Park.

In a polite-yet-firm letter addressed to Atlanta Beltline Inc. CEO Terri Montague, Eugene Bowens, Sr., chair of the independent advisory committee, said the group could not agree with what’s looking to be a necessary move — use more than half estimated $122 million that will become available later in the year to pay off loans and debt for the land.

“TADAC is deeply concerned that using such a large portion of the bond proceeds in this way and for the Northeast quadrant alone is not equitable or appropriate and that other key BeltLine projects will be limited or deferred altogether,” Bowens says. “While TADAC acknowledges ABI’s need to be responsive to the dynamic and often unanticipated demands of the market, TADAC’s understanding of and limited involvement in the decision-making leading up to the transaction, together with the other concerns that are raised in this letter, prevent us from supporting the transaction (and its subsequent refinancing).”

The committee advises Beltline leaders to try to alter the financing deal, reduce funding for the northeast section of the Beltline that encompasses the property, and dedicate future sales of land to other parts of the Beltline.

The property is owned by Gwinnett County developer Wayne Mason and his son, Keith. ABI and Barry Real Estate entered a joint agreement to purchase the land after a prior deal with the father and son ended in the two walking away frustrated by the city.

The issue strikes at the core of the Beltline — using an ambitious project to not only connect all 45 neighborhoods along it, but also attempt to right past wrongs and revitalize areas of the city that have long languished in blight and watched progress blossom elsewhere. It also raises the question currently being debated by Beltline leaders, activists and the city as to what “equity” really means.

Beltline CEO Terri Montague was asked last night how she felt about the letter. She said she had only just received it and was not prepared to comment.

Full letter is pasted after the jump.

For background on the Mason property, click here. A May article explored how this issue would be a touchy one.

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Keith Mason just released a statement announcing the finalized sale of 66 acres of northeast Atlanta property to a joint venture comprised of Atlanta Beltline Inc. and Barry Real Estate. The deal was valued at $66 million by a spokesperson for Mason. The Masons will provide interim financing — temporary lending to the joint venture — until it can establish its own means of financing the deal.

The Masons caused an uproar in 2004 when Keith and his father, Gwinnett County developer Wayne Mason, bought 72 acres of land along the 22-mile project of trails, park and transit, and proposed erecting two tall towers overlooking Piedmont Park. They offered to donate 43 acres if the city agreed to rezone the area for the towers and other pockets of development. The city balked, and for quite some time the future of the project seemed in limbo. Now that this piece of the Beltline has fallen into place, expect eyes to focus on the northwest quadrant of the project, a heavily traveled rail section that is owned by shipping company CSX.

Atlanta Beltline Inc. hasn’t released a statement as of this writing but we’ll post it once they do. Here’s Atlanta Beltline Inc.’s announcement. After the jump, read Keith Mason’s statement.

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