Newspaper Page Text
( ilonetnber 23, 1994
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ages
by Pete McCommons & Dennis T. Gnccnia
I Unfazed By Fact*
Word was out that the Athens Housing Authority (AHA)
was about to convert the University Garden Apartments on
Baxter and the College Place Apartments on Broad into pub
lic housing.
An irate crowd of homeowners was expected at the AHA
meeting last Thursday. Instead, a belligerent real-estate, de
velopment and investment crowd showed up.
The AHA was meeting to reconsider a deal it had turned
down in October. The AHA under Georgia law has the au-
thonty to issue tax exempt securities. Barry Wolfson, of Claudel
Investment Company out of Atlanta, was trying to rescue his
deal whereby the AHA would issue bonds that would be used
by a non-profit Texas social services company, Guadalupe Eco
nomic Services Corporation, to buy the two apartment com
plexes here.
The AHA’s tax-exempt bonds carry the stipulation that at
least 20 percent of the apartment occupants have incomes
less than 50 percent of the median local income. (The me
dian income here is $34,100, which means that 20 percent of
the residents would make no more than $ 17,050 — “poor" by
federal standards but not the very poor. Some married stu
dents would qualify. The renovation of the downtown Geor
gian Hotel, for instance, was financed with AHA tax exempt
bonds.)
This time around, the deal had been restructured to in
clude among other inducements, splitting pan of the proceeds
with a local group, Housing Economic Leadership Program
(HELP), which helps low-income people buy and rehabilitate
homes of their own. AHA also stood to make some money
from bond fees and from other long-range benefits.
The AHA staff had spent weeks analyzing Wolfson’s latest
offer and had prepared analyses of coverage ratios, debt ser
vice, carryback, etc. with overhead projections and narrative
by AHA Director Rick Parker.
Before Parker got his time at bat, AHA Chairman Ken
Dtous opened up the meeting for questions from the audience,
and what followed was a two-hour performance of a show that
could have been labeled “We’re Mad As Hell And We Want
You To Know It And Don’t You Dare Try To Confuse Us With
Any Facts”
In many ways it was a comedy special. Leonard (Leonard s
Losers) Postero entertained his colleagues by haranguing the
AHA, turning “wholly-owned subsidiary" into sarcastic ref
erences to these “holy" properties. Morgan R. Redwine, Jr,
insisted on referring to the Texas organization as the
“Guacamole" company, and Bill Simpson, in extended re
marks, likened Wolfson, the bond agent, to comedian Bill
Murray
Athcns-Clarke County Commissioner Tal I3uVall, before
rushing on to other appointments, hurnedly castigated the
AHA for their effrontery in holding a meeting without in
forming him and causing him to receive 73 irate telephone
calls Finally, A-C Commissioner-Elect Doc Eldridge dem
onstrated his consensus-building skills by complimenting the
AHA and HELP for their work before going on to explain
that the Texas-based company was an unknown and appar
ently shaky enterprise and therefore not welcome in Athens.
Throughout the two-hour tirade. Director Parker repeat
edly rose to dispel rumor and false information; no federal tax
money is involved in the project; no local tax money goes to
AHA, the AHA has no ownership or management of these
properties under this deal and is in no way using it to develop
more public housing; the AHA has no present plans for in
creasing public housing in Athens; the property stays on the
tax rolls; at least 20 percent of the current residents of the
apartments earn less than 50 percent of the median income;
and the property is already owned out-of-town — by the Swed
ish government.
“The deal either works well enough to sell on the open
market, or it doesn’t," Parker summarized “There are no sub
sidies involved. Frankly I’m disturbed and disappointed at the
assumption that the Athens Housing Authority would do
something to increase the housing stock without considerable
debate"
With every question he answered, Parker assured the audi
ence that if they would just stay for the staff presentation, ev
ery one of the questions they had raised had already been ex
amined and answered by the staff.
But lunchtime had long since passed, and the protesters
had had their say. They began drifting out and then the rest
just got up and left, leaving the staff to present its analyses to
the board, the principals and three newspaper reporters
Before the staff could begin, however, board member Mary
Betts announced, “I think we would be extremely derelict in
our duty if we earned this any further."
But the board voted to hear the staff’s analysis, and Parker
ran through what was planned as a two-hour presentation in
about 30 minutes He finally boiled down all the graphs and
charts to the following synopsis.
Pro; The coverage ratio is strong; the deal provides income
for HELP; there’s a 10-percent debt-service reserve; it stabi
lizes the property, it provides non-federal income to AHA.
Con: The past history of the property: it has been churned
four or five times, and the rental history is not particularly
good; the size of the project: it is larger than what Guadaloupe
has done, there’s no equity, no up-front investment; occu
pancy-percentage assumptions are optimistic; and the deal is
loaded with fees and commissions between the $12.5 million
purchase price and the $17 million bond issue.
The AHA board finally voted on a motion by Mary Betts,
supported by Hilton Young and opposed by Rev. Charlie
Maddox not to issue the bonds. Chairman Dious could only
have voted in case of a tie.
The properties still await a purchaser who may or may not
be able to stabilize them against their present downward spi
ral. That deal will likely be transacted without the kind of
public-interest analysis supplied by the AHA in this one and
no public comment by the real estate development commu
nity (PMC)
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