Alpharetta’s peculiar and convoluted virtual apartments

Several weeks ago, around the time of Alpharetta’s Planning Commission actions on Avalon, I began researching the transfer of development rights of apartments (TDRs). At the time there was lively discussion online surrounding this proposed zoning condition. North American Properties would be required to purchase the right to build apartments from parcels already zoned for them but were un-built. Some in the community wanted to know which parcels this applied to. Many of those inquiring minds were ardent Avalon supporters who were interested to know if there were conflicts of interest. It was a fair question.

Unfortunately no list was provided of parcels that had these virtual apartments available for transfer. So I did the next best thing. In one hand I took Alpharetta’s zoning map. In another hand I had google’s satellite view of Alpharetta. In a third hand (actually these were browser windows) I had the Fulton County Assessor’s webpage.

I scanned the zoning map looking for parcels with R-10M zoning then checked to see if they were undeveloped. There were only two of any significant size. They were:

The Ellman Tract - This property sits at the southwest corner of GA-400 and Webb Bridge Road, catty-corner from St James United Methodist Church. This 10-11 acre piece of land has played an important part of Avalon/Prospect Park’s history. I mentioned it in my article about Westside Parkway and how difficult it was to put together this deal.

Dunn Foundation Tract - Located on the northeast corner of GA-400 and Old Milton Parkway, across from Burger King and Waffle House.

I also found a few tiny parcels near downtown Alpharetta with R-10M zoning but were not of significance.

In the end, I didn’t write about this issue before Avalon’s zoning for a few reasons. First, I wasn’t confident that my information was correct. The Fulton Assessor’s office isn’t exactly known for their data accuracy. I believe some of their ownership information may have been out of date. And second, I didn’t see any clear conflicts at the time. I believed Ellman was still owned by Prospect Park’s former developer, Stan Thomas. I figured the city now owned the land under Westside Parkway but that Thomas owned the rest.

Fast forward to Monday night’s Council meeting. NAP frontman Mark Toro mentioned during his presentation that he had acquired some apartment development rights and was ok with a TDR zoning condition. What a relief! I later found out that my research on the Dunn Foundation tract was correct as it seems NAP purchased their apartment rights in a private transaction. All is perfectly legitimate at this point. Keep following along.

Next comes the reading of the zoning motion. The wording of the TDR zoning condition suggested that rights could possibly be purchased from the city. Up went the corner of my eyebrow.

Lo and behold it turns out that the city of Alpharetta owns the entire Ellman Tract, not just the portion under Westside Parkway. This fact was not disclosed to the public during the Westside Parkway announcement (unless I missed it). It certainly wasn’t brought to anyone’s attention when public discussion was taking place over the last few weeks.

This tract represents slightly less than half of the unused apartment development rights in the entire city. The city wrote a zoning condition that says the applicant must negotiate the purchase of an intangible asset… from the city… before the city will allow apartments to be built. At best it is peculiar.

From this point on the city will take the role of a land owner/developer and negotiate the sale of this intangible asset. Were the city a private entity wishing to maximize profit, they would market this asset to any potential apartment developer. That might include AMLI (who has another pending apartment zoning application before the city) or perhaps a developer like Rob Forest. But the city is not likely to sell to someone like this. But if the asset isn’t at least put up for bid in this manner then how does the city put a price tag on the rights?

Or how about looking at this on the flip side. NAP has to continue negotiations with the city over apartments, even after the zoning is approved. Their TDR condition says they can come back before Council to renegotiate the zoning if they wish. What are they gonna say? “We couldn’t reach an agreement with the owner of TDRs (the city) so we are requesting the city to allow us to move forward without buying TDRs (from the city).”

You wouldn’t think Mark Toro would like this kind of relationship. One could make an argument that the city has a fiduciary responsibility to maximize its investment in the Ellmen property and its virtual apartments (a truly rare asset). If that’s the case then they had better be taking the bull by the horns with Toro (no pun intended).

On the other hand, Toro once said that a TDR zoning condition would make Avalon too expensive to build. Yet that didn’t seem to be the case Monday night as he easily agreed to the condition. Is the city making this transaction too easy for Mark Toro?

Did I mention peculiar? Convoluted might be another way to describe it as I feel there may be more to this issue. One thing is sure… the issue of Avalon’s apartments is not over. I expect the city to hold a vote on the sale of the apartment rights. You might also see NAP come back before Alpharetta to renegotiate apartments all over again.

So there you have it. I don’t think Alpharetta fully disclosed the purchase of the Ellman Tract. This arrangement didn’t come to light until the 11th hour after the period of public comment was closed. And the city has to wear two hats in a convoluted relationship.

 


View Undeveloped R-10M Zonings in a larger map

17 Responses to “Alpharetta’s peculiar and convoluted virtual apartments”

  1. Bob Strader April 26, 2012 at 7:40 am #

    Wow Lee! Really interesting and great that you dug this up. It’s certainly peculiar but I can’t say it bothers me too much. We all know the city has a huge incentive to get this deal done and if this makes it happen then so be it. In the end, if it satisfies the concerns over rent ratios in the city and get’s NAP what they need, then the city and it’s residents get a great development. Great research!

  2. Lee April 26, 2012 at 8:49 am #

    Thanks Bob. And thanks for reading that entire post. At a thousand words, only a true zoning policy wonk would wade through it all!

  3. Kim April 26, 2012 at 10:25 am #

    Bob,
    It matters because there might be other strings attached that we will never know, such as campaign contributions or some other backroom deal. It is an incestuous relationship at best. That the information was not disclosed to the public beforehand despite many people asking for it smells really bad.

  4. Mike April 26, 2012 at 1:02 pm #

    Lee,

    Hope this helps. Google’s a wonderful thing:

    http://roswell.patch.com/articles/alpharetta-reaches-agreements-to-get-property-for-last-section-of-westside-parkway#comments_list

    http://alpharettaga.suiteonemedia.com/web/Player.aspx?id=19&key=&mod=m&mk=-1&nov=0

    Start at about the 6:20 mark on the council meeting video from 11/28/11.

  5. Lee April 26, 2012 at 1:54 pm #

    Thanks for the comment, Mr Kennedy. I believe I was at this meeting in November. It wasn’t clear to me then that the city purchased the entire tract of land or just the road right of way. I posed that very question to several people in city government very recently and they were not sure.

    In addition to this, I don’t understand why the city didn’t volunteer this information during the time when the public was kicking around TDR concerns online.

    Being forthcoming with the public is also a wonderful thing.

  6. Mike April 26, 2012 at 2:02 pm #

    I told you back on April 12th — 11 days before the Avalon public hearing and 14 days before this blog post — that the city owned the Ellman Tract. Don’t know what else I can do.

  7. Lee April 26, 2012 at 2:21 pm #

    Mike, I went back through our emails from April 12th. My questions were not directly answered back then (I didn’t realize it at the time).

    You were not sure if the city got road or land at Ellman, saying we “never got that deep into details.” I also asked about NAP buying TDRs from the Ellman tract and if the city would be involved. You only said at the time that NAP was looking at private parcels.

    The city was sitting on over 100 apartment development rights and no one talked about it. Part of it might be my fault for not asking the right questions at the time. But if the plan was to have NAP negotiate with the city for these, I think it should have been better disclosed, before the vote.

  8. Kim April 26, 2012 at 3:45 pm #

    But if the plan was to have NAP negotiate with the city for these, I think it should have been better disclosed, before the vote.

    Indeed.

  9. Mike April 26, 2012 at 5:57 pm #

    Lee,

    Let me summarize this way. The city got the right-of-way for most of the recent Westside Parkway addition from North American in exchange for impact fee credits. The city also bought the final piece of road right-of-way and adjoining land from Stan Thomas after a professional appraisal and for less than what our legal counsel thought it would cost to take the property through eminent domain (as you suggested). We also just approved a $700 million mixed use development that’s the envy of every city in the southeast with what will very likely be close to a net zero increase in apartment rights.

    Do you think it might be possible, for once, to give the parties involved the benefit of the doubt until the final details are worked out? You know, I know it’s hard to believe, but there’s always a chance that this will be a win/win for everyone involved.

  10. Kim April 26, 2012 at 10:19 pm #

    Mike,
    Were negotiations between the city and NAP discussed (even if in ballpark terms) before Avalon approval on Monday night? If I were a developer, I would want to know what I was jumping into before I accepted the deal on the table. All along Toro was saying that TDRs were a deal-breaker, but apparently that wasn’t so. What changed his mind? So I ask again, were there any negotiations between anyone from the city or NFCID and NAP before Monday night? Would you say that on a witness stand under oath?

    Trust is broken when time and again we cannot get straightforward answers, not just on this issue but others. Vagueness invites scrutiny. Why so vague with Lee in your previous emails if there is nothing to hide? Especially when there was lots of conversation about it on the blogs? It makes people wonder what is going on.

  11. Greg April 27, 2012 at 10:32 am #

    Here’s a different perspective: Alpharetta has a self-imposed limit of 15% for apartments in the city, yet we’re already up around 25%. Now we find out the city owns the rights to build 100 new apartments. I think if you were to ask 100 citizens, 95 would say, “Great! Use this opportunity to get closer to the limit by deleting those rights.”

    Of course, you feel it’s worth it because this project is “the envy of every city in the southeast.” Other supporters claim it will be a national icon. Personally, I’m not seeing it. Certainly no other NAP property can make that claim. When was the last time you made the drive down to Atlantic Station to enjoy its great vibe and excitement? Exactly.

    Maybe I’m being shortsighted. Time will tell. But in the meantime, do you think it might be possible, for once, to listen to your constituents? This idea that we have to fight the developers AND those who represent us is getting old.

  12. Lee April 27, 2012 at 10:37 am #

    Greg, that is a great point. If we had the chance to discuss this issue ahead of time then I would have pushed for that very thing. Retire the Ellman apartments. I suppose the city council could choose to do that even still, but the public doesn’t have a lot of say at this point. Avalon’s zoning condition was written in such a way that they need to buy city-owned apartment rights.

  13. Travis Allen April 27, 2012 at 11:41 am #

    Mike-

    I don’t believe “every” other city in the Southeast is envious, in fact, people here in Milton could probably care less.

  14. Kim April 27, 2012 at 12:49 pm #

    Somehow I’m not feeling like the object of envy. I feel like I’ve just been in negotiations with a used car salesman.

  15. matt g April 27, 2012 at 3:17 pm #

    Lee, this is a fantastic article. I supported NAP’s proposal without conditions, and ultimately, that is exactly what happened. If the city acquired apartment development rights, then those rights are “retired” by definition. Once purchased from the city, the development rights become “re-issued.”

    So essentially, NAP is paying a fee for the issuance of new apartment development rights. I’m 100% fine with this as I support this approach. I am 100% NOT fine with the absolute lack of transparency of how this played out. The net result is an increase in non city-owned apartment rights. I am OK with this because I do not consider NAP’s “apartments” to be “apartments.” But for citizens who do NOT support the issuance of ANY additional apartment rights, you were just misled. The city council can do better..

  16. Lori April 28, 2012 at 9:16 pm #

    Hi,
    I love your blog and can’t wait to read the blog on Taste of Alpharetta! I saw you made mention of AMLI in our of your blogs. We are actually opening AMLI North Point in June 2012 and will be the first LEED certified project in the City of Alpharetta! This means we are are designed to be built for LEED certification and will include all the green living features such as: low VOC in paint, carpet, and adhesives, Merv 8 filters, carbon monoxide monitors, digital thermostats, on site recycling, fresh air ventilation, and more! Plus the property is a Breathe Easy community which means we are smoke free – inside and outside the community. We look forward to being part of the Alpharetta community and welcome your support!

  17. Lori April 28, 2012 at 9:19 pm #

    Excuse the typos… meant to say I saw you made mention of AMLI in ONE of your blogs and I put are are in another line, eek.

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