Atlanta Progressive News

(APN) ATLANTA — CEO Brian Leary of Atlanta Beltline Inc. (ABI) was terminated at a Special Call Meeting of the Board of Directors on yesterday, August 17, 2012, after a week of daily articles in the Atlanta-Journal Constitution newspaper (AJC), revealing over a year’s worth of improper taxpayer dollar expenditures.

After a City of Atlanta audit concerning Atlanta’s ten Tax Allocation Districts (TADs) looked at one month of Beltline reimbursements by the Atlanta Development Authority (ADA, doing business as Invest Atlanta) of taxpayer dollars, the AJC requested and obtained a year’s worth of records.

To be sure, the termination of Leary suggests that Beltline’s Board–which includes representatives of the City of Atlanta, Fulton County, and the Atlanta Independent School System (AISS)–has gotten serious about preventing thousands of dollars of waste and abuse of taxpayer dollars on frivolous items.  

However, the much bigger problem, which is the waste of not thousands, but millions in taxpayer dollars on a bloated, unaccountable bureaucracy that duplicates many services of City of Atlanta government, persists.

The Beltline–whose main accomplishments have been so far the establishment of parks and trails, with no transportation in sight for at least ten more years–has twenty-three full-time employees, according to its website, including: a President and CEO, a Chief Operating Officer, Vice President and General Counsel, Director of Finance and Administration, Director of Design, Director of Transit and Transportation, Director of Real Estate, Director of Community Engagement, Director of Communications, Program Management Officer, External Affairs Manager, Manager of Housing and Economic Development, Accounting Manager, Senior Landscape Architect, Senior Project Manager for Transit and Transportation, Senior Project Manager for Planning, Senior Civil Engineer, Project Coordinator for Art and Design, a Community Engagement Advocate, Communications Coordinator, Real Estate Paralegal, Executive Assistant, and a Special Projects Coordinator.

As previously reported by Atlanta Progressive News, there is no reason that the City of Atlanta has to contract with Beltline Inc. to manage the Beltline TAD; other cities and counties manage their TADs in-house.

It appears that many of the functions being performed by Beltline Inc. are largely or wholly duplicative of City of Atlanta government functions.  For example, the City of Atlanta already has a Law Department; the City has a Communications Department, a Finance Department, a Planning Department that includes housing specialists, a Parks and Recreations Department; etc.

Other positions seem to be unnecessary, for example, the two transit specialists at Beltline Inc. with no transit to work on for at least ten years.

Dwanda Farmer, PhD in Community Economic Development, said she believes the City should manage the Beltline in-house.

“They should be ashamed,” Farmer said, referring to ABI’s “fantasy world pie in the sky staff.”

City of Atlanta Commissioner “James Shelby is competent enough to run Planning and Development.  He should be able to facilitate that with ease.”

“I’d give them one director-level position for the Beltline, one planner.  They just need about two staff people, maybe three at the most to deal with it.  Whatever housing is happening with the Beltline could be happening with the [City’s] Director of Housing,” Farmer said.

“There should be no Beltline, Inc.  They should not have an entity that is not a City entity managing our resources.  That’s like privatization.  They have basically outsourced the Beltline to a private entity.  That’s why we pay taxes – we pay employees to do the work of the government that’s ours.  If it’s our money, it should be our employees,” Farmer said.

“Right now they’re just a private entity that’s none of our… business, that’s doing whatever they want to do including buying champagne and gifts, getting drunk, and going to baseball games,” Farmer said.

“Three people I believe could do this job.  Certainly it could be done with ten.  What do we have?  A little bit of trails and parks, but come on,” Farmer said.

John Woodham, an attorney on a series of lawsuits challenging the legality of ABI’s existence, previously told Atlanta Progressive News that he believes the outsourcing of Atlanta’s ten TADs with the ADA and ABI is simply a mechanism to allow shady deal-making to go on at arm’s length from the City of Atlanta.

Woodham is representing Plaintiffs John Sherman and Christopher Eichler, President and staff member, respectively, of the Fulton County Taxpayers Foundation (FCTF), who are suing in their personal capacities.  One suit challenges the authority of a government entity such as the ADA to create a non-profit organization such as the ABI.

Woodham believes another reason ABI was created as a separate entity is so that it could be a non-profit and accept tax-exempt donations.  However, Woodham questions whether tax-exempt donations can legally be used to support government projects like the Beltline, noting that a person could not make a tax-exempt donation to the City of Atlanta.

And even though ABI claims it has reimbursed the City of Atlanta for some of the questionable expenses brought to light by the AJC, this would only mean that the cost of those expenses has shifted from taxpayers to private ABI donors, and that these donors are receiving special tax breaks for funding things like parking tickets, baseball game attendance, drycleaning, kegs and booze, gifts, lavish meals, and fancy desserts.

Woodham is also challenging the continued existence of the Beltline TAD itself, which he argues was made null and void as the result of a Supreme Court of Georgia ruling and could not simply be amended as the City of Atlanta has done.

In any event, ABI has received more than 337 million in funding since 2006, ABI told the AJC.  Much of this funding comes from taxpayers of the City, County, and AISS and is diverted from the General Funds of these entities, including from Atlanta Public Schools.

According to a document prepared by Fulton County Commissioner Emma Darnell (District 5), the three entities have invested over 88 million dollars in tax increment into the Beltline TAD since its enactment in 2005.  

The Beltline also financed and re-financed a bond issuance through the Beltline TAD.  According to the audit report, the Beltline bond issuance was for 78 million dollars and will mature in 2031.  For this bond obligation, the City, County, and AISS owe over 153 million dollars in principal and interest.

The Beltline TAD is also one of the TADs identified in the City’s audit report to have a fund balance.  The current fund balance is over 28 million dollars.

ABI also told the AJC that a separate entity called the Atlanta Beltline Partnership had raised about 40 million dollars in private donations for the Beltline.

Some of the specific items of concern identified in the AJC report included a $106.22 purchase of a wine cooler from the Pottery Barn as a gift to Leary’s fiance; $489.24 to Green’s Liquor for kegs of beer for an Art on the Beltline event; at least 2,565 dollars for food and a charter bus to a Braves game; a nearly 700 dollar lunch at Rosa Mexicano; over 300 dollars for tickets to an exhibition; a 753 dollar food bill for the Lobby at Twelve; Leary’s $12.95 parking ticket and his seven dollar dry cleaning bill; expensive hotel stays, room service, and steak dinners for Beltine VP and General Counsel Patrise Perkins-Hooker; a roughly 300 dollar tab at the Kevin Rathbun Steak restaurant; and a $57.52 charge for alcohol at JCT Kitchen.

The scandal even drew the attention of the national Fox News program, Fox and Friends, who aired a five minute segment on the early morning Wednesday, August 15, featuring Barbara Payne of the FCTF.  One caption during the segment stated, “BELTLINE TRAIN WRECK?”  ABI has quickly become a national poster child of government waste.

“The board has determined that it is in the best interest of the organization to make a change in leadership,” John Somerhalder, Chairman of the Board of Directors of ABI, said in a statement.

“Today, the board has unanimously agreed that Brian Leary will transition out of the organization by the end of this month.  During that time he will assist the board in its planning efforts to transition to new leadership. Effective immediately, in her role as Chief Operating Officer, Lisa Gordon will lead the organization reporting to the board of directors in an interim capacity.  The board will establish a process to search for a new President and CEO,” Somerhalder said.

“Invest Atlanta and Atlanta BeltLine, Inc. have strengthened policies regarding the expenditure of TAD funds that will ensure good stewardship of taxpayer money.  As stewards of taxpayer dollars, we must hold ourselves accountable and will not accept anything less than prudent, transparent and efficient use of public funds,” he said.

ABI’s Board includes Mayor of Atlanta Kasim Reed, Somerhalder, Elizabeth Chandler, Joseph Brown, APS Board of Education Member LaChandra Butler Burks (District 5), Darnell, Councilwoman Joyce Sheperd (District 12), Charlie Shufeldt, and Cathy Woolard.

The ADA Board of Directors and the Community Development/Human Resources (CD/HR) Cmte of the City Council of Atlanta, which is chaired by Sheperd, also bear some responsibility for failure to oversee the Beltline.

Previously, APN has reported on numerous problems with leadership of Mr. Leary–who had previously headed up the Atlantic Station redevelopment–since he came to Beltline, Inc.

For example, in June 2010, Leary promised APN’s News Editor–the present writer–with a public explanation as to why ABI and ADA opposed a requirement of a ten percent set-aside of rental units affordable to families making at or below thirty percent of the Area Median Income (AMI), to be provided at the September 2010 CD/HR meeting, but failed to do so.

It took about a year and a half and about ten appearances before the CD/HR Cmte by the present writer to get ABI to admit to the Cmte as to what they did, that they opposed meaningful affordable housing requirements for the Beltline.

ABI even provided APN and the CD/HR Cmte with a deceptive written statement after APN put its questions in writing.  ABI, under Leary’s leadership, claimed that such an affordable housing requirement was never part of the original recommendations of the Beltline Affordable Housing Advisory Board (BAHAB), even though it clearly was.

Chairwoman Sheperd failed to even hold ABI accountable for that misinformation, and only after Councilman Michael Julian Bond (Post 1-at-large) requested it, did James Alexander, Manager of Housing and Economic Development for ABI, admit to what they did.

(END/2012)