Smyrna stands to lose $5M in complex sale
by Nikki Wiley
October 08, 2013 12:23 AM | 3624 views | 10 10 comments | 7 7 recommendations | email to a friend | print
SMYRNA — The city of Smyrna could lose more than $5 million on the sale of a 47-acre property it purchased in 2010 to encourage redevelopment.

City officials on Monday removed a resolution from their agenda supporting the Smyrna Downtown Area Development Corporation’s intention to sell the site of the former Hickory Lakes apartment complex to Vinings-based Southeast Capital Companies for $13 million. Council members did not discuss or vote on the sale and it has not been finalized.

Downtown development officials are appointed by the city’s seven-member City Council.

A $13 million sale would mean a $3 million loss on the property the city has spent $16 million purchasing and razing. That loss jumps to $5 million when considering the roughly $478,000 in interest paid in August, another $898,000 that is due in interest on Feb. 1, 2014, and the 5 percent commission the city’s Realtor, NAI Brannen Goddard, stands to receive, which would be $650,000 on a $13 million sale.

Those numbers don’t include the amount of property tax revenue the city lost when the site was purchased and removed from the tax rolls.

The property that once housed a 726-unit apartment complex at the intersection of Old Concord Road and Windy Hill Road was purchased with the goal of controlling the city’s destiny, Smyrna Mayor Max Bacon told the MDJ in late July.

Smyrna has undergone an effort in recent years to raze aging apartment complexes, and more than 10 percent of apartments in the city have been removed.

Southeast Capital Companies, the buyer being considered by the city, is a real estate acquisition firm that specializes in development of multi-family, single-family, and mixed-use projects, according to its website.

Representatives of the company did not return a phone message Monday afternoon.

Councilwoman Susan Wilkinson, who sponsored the agenda item, declined to talk about the specifics of the sale but said she wants the property to become a positive for the community.

“I’m open to different things, actually,” Wilkinson said about her thoughts on what the site should become. “Anything that’s an improvement that will help to stabilize the neighborhoods around there, I think would be a plus.”

Wilkinson was not on the council in 2010 when the site was purchased and can’t say if she would have supported the purchase.

“I don’t know what I would have done,” Wilkinson said. “If I wasn’t in that environment at the time, I can’t say what I would have done.”

Millions spent on private property

Hickory Lakes isn’t the only property Smyrna has purchased hoping to have a say in its future. More than $20.1 million of taxpayers’ money has been spent in the last five years by the city purchasing private property for redevelopment.

Smyrna Elementary School was also once a 144-unit apartment complex called Smyrna Commons and was purchased by the city.

The city had to buy part of that property to build a connecting road between Ward Street to a new commercial development, called Belmont Hills, at the corner of Atlanta and Windy Hill roads.

But when the complex went up for sale, the city jumped on it. The Smyrna Downtown Area Development Corp. spent $4.6 million for the property that also provides public recreation space. Another $2.5 million in renovations was also spent before the city knew about the school board’s interest in turning the site into a new school.

A property, intended to be a retail center at Dunton Street and Concord Road but containing only the 15,000-square-foot steel frame of a building that was never finished, was put under contract last month and is set to make the city a $100,000 profit.

About 6.3 acres representing 22 parcels on Concord Road were purchased by the city between 2007 and 2011 for improving the road. This time, though, the money for the $5.75 million purchase came from special purpose local option sales tax funds.

Mayor Bacon previously told the MDJ he does not want Smyrna to get into the real estate business.

“My philosophy is not to go out and buy a lot of property when it comes available and try to hold onto it until you find somebody,” Bacon told the Journal in late July. “These properties, all four of them, they all became available and there was an opportunity to do something with the property that was going to make our community better.”

Bacon could not be reached for comment by phone and left Monday’s council meeting immediately following adjournment.

Comments
(10)
Comments-icon Post a Comment
APSOT
|
October 15, 2013
I understand the frustration over this transaction. Clearly, the City paid too much for the property. However, I think you must not lose sight of the positives. This complex was not only a drain on resources, but also directly responsible for a large portion of the crime in Smyrna. By ridding the City of these types of projects the City becomes much more desirable and our property values (and tax base for the City) will ultimately rise. Short term it was a bad deal, but I still think it will payoff in the long term.
rjsnh
|
October 09, 2013
This is an outrageous and irresponsible real estate transaction by Smyrna's Mayor and Council. A $5 million loss!!! Why, you would almost think they are gambling and LOSING with other people's money....TAXPAYERS. And, this is supposed to pass as good government....PLEASE. WE CANNOT CHANGE THE POLITICAL CULTURE UNTIL WE CHANGE THE POLITICIANS. As long as we elect the same mayor and re-elect his same "yes men" as council members we can expect such questionable sweetheart deals to continue...at our expense. And, for the record, if the MDJ is a real newspaper, it will continue to investigate these shenanigans.
smyrna resident
|
October 08, 2013
I can think of one large high-end neighborhood in Smyrna that sends LOTS of tax dollars to the city...and 15 years on, we don't even have sidewalks! The fact that our hard-earned dollars are spent (and lost) by the city in this manner is truly outrageous.
Well
|
October 08, 2013
How much was it costing the city when it was Hickory Lakes? I understand it were many multiple nightly visits by Smyrna PD before the city bought it. How much was that costing the city?

How much will the city gain after its developed? Praying it will be single family housing.. NO RENTAL units!!!!
Smyrna Guy
|
October 08, 2013
So where are all the supporters of this purchase at now and why is the council suddenly so quiet? Some of us tried to tell folks in Smyrna this was a bad deal from the get go, but were constantly berated, shouted down, and called names. It is ashame Smyrna and her residents are having to learn the lesson, "Just because an idea has good intentions, doesn't mean it should be implemented" the hard way. I fear it will be many many years before fully recovers from these deals. Take care...Smyrna Guy
FROM TEXAS
|
October 08, 2013
But the dummies in Smyrna still reelect Bacon which rich Republican is going to get the 5 million dollar savings on this boondoggle for the tax payers?
SC Observer
|
October 08, 2013
There have been several bids close to the 20 million dollar mark and now the Mayor and Council decide to sell the property at a loss.

When is the MDJ going to investigate the corruption going on in its backyard.
FRANKLIN ROAD
|
October 08, 2013
Are any transplants new enough to remember when Franklin Road or Delk Road was new and shiny? I remember. I remember all the promises for their future, too.

We can pour millions of our own dollars into some developer's new apartment project yet again and the developers will pocket the money yet again and the shiny new apartments will turn into slums yet again and we will be right here in another 20 years yet again paying millions to take care of some developer's problem at a high price based on "the potential."

The BEST outcome possible is another high priced PVC farm.
Watcher...
|
October 08, 2013
This has been a nightmare for Smyrna Citizens. No wonder Bacon was not available for an interview.
*We welcome your comments on the stories and issues of the day and seek to provide a forum for the community to voice opinions. All comments are subject to moderator approval before being made visible on the website but are not edited. The use of profanity, obscene and vulgar language, hate speech, and racial slurs is strictly prohibited. Advertisements, promotions, and spam will also be rejected. Please read our terms of service for full guides