Atlanta—At the intersection of streets named for two civil rights leaders, a historic neighborhood here is getting a push toward revitalization in the form of a new workforce housing development.
Sky Lofts, a $35 million condominium and townhouse project aimed at working-class and middleclass African-American buyers, sits at the corner of Ralph David Abernathy and Joseph E. Lowery boulevards. The two men were leaders in the Southern Christian Leadership Conference, a pivotal organization in the civil rights struggles of the 1950s and ‘60s.
The West End neighborhood where Phase II of the project is under construction is poised for a comeback after deteriorating for the last few decades, said Jerome Russell, CEO of local developer H.J. Russell & Co. He’s expecting Sky Lofts to be part of that revitalization. The project is being developed by Russell Green Pastures, LLC, a joint venture between Russell New Urban Development, LLC, and Green Pastures Christian Ministries.
The 101 condos and four townhomes in Phase I of the development were priced at around $140,000 for one-bedroom units and $190,000 for two-bedrooms, according to Russell. That’s a low enough price to keep the units affordable to households earning between 80 percent and 100 percent of Atlanta’s median income of about $51,000, he said. All but 11 of the units were sold as of mid-August.
How was the developer able to keep prices that low without using any subsidy? By getting a good deal on the land, selling off a portion of the parcel at a nice profit, and working with the city to get a tax abatement on the property, according to Russell.
The developer paid about $2 million for a partnership interest in the 6-acre parcel, or roughly $333,000 per acre. “Today, that land is probably worth twice that,” said Russell.
The partnership also sold 1.2 acres of the parcel to the CVS/Caremark Corp. for the construction of a pharmacy.
As part of an effort to encourage development in the West End, the city provided a 10-year tax abatement to the project. The agreement abates property taxes on the development completely for the first five years, and then phases in the full assessment in increments of 20 percent per year over the following five years.
The project’s first phase, with a total development cost of about $16 million, including about $12 million in construction costs, was financed by SunTrust, Russell said. The second phase was financed by a consortium of banks led by the minority-owned Citizens Trust Bank of Atlanta.
Construction on the 102-unit Phase II portion of the project is slated for completion this November, and pre-sales began in May. Just three of the units are under sales contracts.
“We’re a little concerned,” said Russell in mid-August. “The market has really slowed down. We’re going through an adjustment period right now.” Russell said he’s expecting the market to pick back up in 2008. “Fortunately, we don’t really have any exposure on Phase I.”