Herndon Square’s Master Development Agreement Amendments to be Considered by the Housing Authority

Recent changes in the marketplace have required updated terms to move the mixed development forward.
Photo: Google Earth Pro

Recent changes in the marketplace have caused Atlanta Housing, Hunt Development Group, and Oakwood Development Group as developers, to revisit the business terms of the former Herndon Homes Public Housing site master development agreement and to negotiate revisions that will affect all four of the remaining future phases of the development program.

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The Board of Commissioners of the Housing Authority will be reviewing the changes and request to amend the agreement during their January 26, 2022, regular meeting. Affordable Housing staff recommends approval of the revised terms, master plan, and funding commitments to complete the public infrastructure and move the residential development phases forward.

The resolution to be considered by the Authority include the following revisions and terms:

  • Revising the master plan to eliminate the (1) residential component that was intended to be a mixed-use resident and commercial development combining the next phase of residential multifamily with a grocery store, (2) the greenspace, (3) the community space, and (4) STEAM Center from the current Phase III program on, the southwest quadrant of the site; and reprogram that portion of the site for a standalone grocery store and parking.
  • Reducing the previous HomeFlex commitments for Phase II and Phase III to 80 and 76 units, respectively, with contract rents not to exceed 60% AMI.
  • Increasing the public infrastructure financial commitment from $6,366,712 in federal funds to $11,070,429 with $6,376,636 in federal funds, and a combination of financial resources (including possible non-federal funds) to satisfy the Westside Future Fund outstanding loan balance in the estimated amount of $4,000,000.
  • Authorizing a preliminary financial commitment for Phase II of an AH construction to permanent loan in an amount up to $16,500,000.
  • Authorizing a preliminary financial commitment for Phase III of an AH construction to permanent loan in an amount up to $15,890,000.
  • Extending specific financial closing dates with overall the construction completion deadline for all phases being extended to 2026.

According to City documents, in 2017, the Housing Authority was initially authorized by the Board of Commissioners to enter into a Master Developer Agreement with Hunt Development Group and Oakwood Development Group to revitalize Herndon Square for a total estimated budget of $102,465,012. The agreement included the redevelopment of the 13-acre former Herndon Homes public housing site into a mixed-use, mixed-income community. Since that time, Program Manager Pennrose reported a lack of wiliness to invest in mixed-income developments with more than 20% market-rate units. In addition, they could not secure a retail grocer for Phase II despite significant outreach efforts to Publix, LIDL, ALDI, Kroger, and Walmart. According to presentation documents, while Publix, LIDI, and ALDI initially expressed some interest, they all had concerns about the lack of a standalone building and sufficient parking, inability to sell beer and wine given the proximity to a church, limited retail, and development activity in the area and that the current average income in the neighborhood does not meet their investment requirements.

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Dr. Anita Archambeau

Anita Archambeau, DPA AICP, is a freelance writer, adjunct professor, and consulting urban planner. She has over 25 years of community and economic development experience in local government. When she’s not working, you can find her exploring local craft breweries, walking her two beagles, or traveling to visit her adult children living in New York City and Minneapolis.
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