ATLANTA - The City of Atlanta has lost its final bid in a university land dispute that may cost taxpayers more than $20 million.
This month, the state Supreme Court ruled against the city, requiring it to return 13 acres of premium property that sits near Mercedes-Benz Stadium to its rightful owner, Clark Atlanta University.
The move ends a four-year legal battle with CAU, which sued the city several years ago, and records reveal costly expenditures and demands related to the sale.
Invest Atlanta, the city’s economic development arm, acquired the land in 2014 in a $14 million transaction with a bankrupt Morris Brown College. The school used the money to dig out of financial woes, while the city began major development plans, including the new stadium.
But a portion of the purchase was in question from the start. A 1940 deed outlined Morris Brown’s obligation to return the 13 acres around the historic Gaines Hall and Herndon Stadium back to Clark Atlanta because the land was no longer being used for educational purposes.
In an October 2017 interview, then-Mayor Kasim Reed told Channel 2 investigative reporter Nicole Carr that the city wasn’t convinced the deed was valid.
“You know there were differing opinions at the time,” Reed said. “It wasn’t as clear that a letter agreement would be binding over all of those years.”
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“And the second part was Morris Brown was continuing to operate,” Reed added, suggesting the land was technically being used for educational purposes.
Reed also revealed he’d been in talks with movie studios to develop the land, despite an appellant court’s ruling against the city that month.
The comment frustrated Clark Atlanta’s president, Dr. Ronald Johnson, who was interviewed by Carr the same day.
“It’s not about my understanding or the mayor’s understanding, it’s about what the law says,” Johnson said.
A COSTLY SALE FOR TAXPAYERS
The portion of land lost in the dispute is worth an estimated $10 million, according to legal documents.
Clark Atlanta University confirms it is seeking $2 million in legal fee reimbursement, and another $8 million to $12 million in restoration money to rehab historic Gaines Hall, which caught fire in August 2015 during the city’s claim to ownership.
Additionally, a government invoice database shows the city has spent more than $400,000 in legal fees associated with the CAU legal dispute.
If the courts decide the city must reimburse Clark Atlanta, the loss of this legal fight could cost taxpayers more than $20 million.
The Invest Atlanta board was advised of the costs in a recent executive session.
One of the most vocal board members told Carr the board will have to take a look at how decisions to continue fighting the university have impacted taxpayers.
Behind closed doors, the board members were assured there was a chance Clark Atlanta would end its fight for the 13 acres.
“I think the public should know the mayor (Reed) said he believed he could settle this for a reasonable sum,” Julian Bene told Carr.
A spokesman for Invest Atlanta declined to comment on whether the board will agree to reimburse
Clark Atlanta for millions spent in legal fees, citing pending litigation.
Carr ran into one of the agency’s senior vice presidents at a community event on Friday morning.
“So yeah, actually I'm not authorized to talk about that,” Alan Ferguson told Carr.
“But you guys fought them for a long time,” Carr said referring to CAU.
“Yeah, I understand that, but I'm really not the person to talk about that, so I appreciate that,” Ferguson said, referring Carr to the agency’s spokesperson, Matt Fogt.
Former Mayor Reed’s spokesman did not respond to a message for comment. Mayor Keisha Bottoms said she is committed to working with the university on West Side development.
“I look forward to us now just moving forward. And I've had many conversations with President Johnson and I'm very excited about all the great work that we will do together,” Bottoms told Carr.
In a statement to Channel 2 Action News, Clark Atlanta's president said he was pleased with the high court’s decision, and the university’s ability to move on with finding beneficial use for its scholars.
“Clark Atlanta University is a proud Atlanta citizen, and it is my hope that we can work with the city to bring historic Gaines Hall, which is the city’s second oldest building, back to its original glory,” said Johnson.
“Restoring Gaines Hall ties into our desire to be an engine of economic mobility for Atlanta’s West Side community, as well as our desire to preserve areas of the city that were significant in the civil rights movement.”
Invest Atlanta does confirm it is moving forward with a $3 million sale of land it does own from that transaction. It borders the land lost in the Supreme Court fight, and includes portions of
Griffin Street Northwest, Sunset Avenue Northwest and Magnolia Street Northwest.
The plan is for the Housing Authority of Atlanta to develop 7 acres in a mixed-use, mixed-income development through the Choice Neighborhoods housing initiative.
The developer is McCormick Baron Salazer.
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