Thrive Homes, Decatur Development Authority to work on ‘model’ for affordable development
By Cathi Harris, contributor
The Decatur Development Authority board voted on Friday to recommend that Thrive Homes (also known as Park 108, LLC) be allowed to amend its existing conditional use permit (CUP) and continue its work redeveloping the old AT&T learning center at the corner of Park Place and East Lake Drive into condominiums.
An ordinance containing the revised conditions will be voted on by the City Commission at its June 17 meeting.
The developer has scrapped plans to add a third story to the building, which means they are “back to the drawing board” in terms of the number, design, and type of units that will be built, Thrive Operations Manager Crystal Robinson told board members.
Currently, they plan on a combination of studio and one-bedroom apartments and nothing larger, she said.
Draft conditions approved by the city planning commission on Tuesday still allow the developer to build up to 34 units in the existing building, but getting that many may not be feasible. Depending on the final design, they may end up with fewer units, though the goal would be to maximize the building’s potential and construct 34 slightly smaller condos than they originally wanted.
A key point of contention between Thrive and the city is the condition imposed on the original CUP that calls for four units — just over 10 percent of the total planned — to be reserved for workforce housing.
The revised ordinance approved by the Planning Commission calls for Thrive to work with the DDA to determine the number of units and the manner in which they will be reserved.
At the DDA meeting, Laurel David, the attorney representing Thrive, told the board that Thrive is prepared now to designate two studio units as affordable housing, to be sold for $246,000 each. Those would be within the affordability threshold for someone making 100 percent of the area median income (AMI) of $74,800.
Since all of the units are planned to be small one-bedrooms and studios, they anticipate that the market-rate studios would sell for around $300,000, which is under the affordability threshold for someone making 120 percent of AMI. So, much of the market-rate housing there could be considered affordable.
Thrive would then need to work out with the DDA how the affordable units would be managed separately from the market-rate ones.
Similar developments in the City of Atlanta, like The Lofts at Reynoldstown Crossing, received substantial subsidies from nonprofit groups, which helped bring down both the development costs and the final purchase prices for the buyers.
“We won’t have access to that. So, what we end up doing will ultimately serve as a model for how this can be done by others,” David said.
This could be a potential project for the newly formed Decatur Land Trust, noted Assistant City Manager Lyn Menne. The trust, established in May, will be the vehicle that supports the city’s cottage court affordable housing project and, likely, these condo units as well.
Land trusts are a mechanism by which cities can buy and set aside property to be preserved for affordable housing development. In some cases, the trusts retain ownership of the properties long-term to ensure they remain affordable.
“The [land trust] board is currently in the process of working through policies and procedures specifically around the Cottage Court project and will be the vehicle to maintain permanent affordability of the condo units we discussed this morning,” Menne told Decaturish after the DDA meeting. “We are working closely with consultants who were involved in the Athens Georgia Land Trust to assist us with creating these policies and procedures. We also plan to meet with the Atlanta Land Trust to find out how they handled the purchase, resale and management of condominium units set aside for affordable/workforce housing in a market rate condominium project.”
In similar projects around the country, land trusts have been able to conserve affordable housing by maintaining ownership of the land and then structuring lease agreements with buyers to ensure that they can realize some equity profit when they want to move and sell the individual house or condo, but that properties in areas with rapidly rising home prices, like Decatur, the properties would not just flip at the market rate.
While it is true that the Park 108 development is not directly comparable to the Reynoldstown Crossing project, Menne believes they can structure the affordable units in a way that is sustainable and still allows Thrive a profitable return on their investment.
During the meeting, the DDA board members did not feel that they had enough information to specify the number of affordable units that Thrive would be held to, asking that the draft language for the amended CUP state that Thrive would, within 60 days, provide schematic plans for the development, including the specific number of units that would be built as well as an estimate of the base price.
“I think we definitely want to work with you. We don’t want to do anything that will kill this deal for you,” board member Conor McNally said. “We just need a bit more specific information.”
The board, with member Fisher Paty abstaining, voted unanimously to recommend the draft amended condition stipulating that Thrive would provide more details to the DDA and work with the board on the affordable housing component.
The City Commission, at its next meeting Monday night, will vote to approve or deny the amended conditions to the CUP to allow the project to continue.