Brookhaven City Council killed the Skyland Center bonds issuance in a Dec. 23 re-vote, a dramatic turnaround from its unanimous approval of the deal just eight days earlier.
The new vote was triggered by ethics concerns about Councilman Joe Gebbia’s former service on the board of the Brookhaven Innovation Academy, a potential tenant of the Skyland Drive building if the city’s Development Authority purchased it. But that gave council a chance to rethink other legal and moral questions—including some raised with individual council members and the mayor by Mayor-elect John Ernst—that led a 3-1 majority to kill the deal.
“In my mind, there’s a number of conundrums,” said Mayor Rebecca Chase Williams, who cast the deciding vote against the $3.3 million bond issuance. “I’ve had enough conversations with our mayor-elect to know if I don’t vote ‘no’ today, he’s going to vote ‘no’ [on the final bond-issuance contract] in January.”
Ernst in a later interview praised the council and city staff for “taking a good, hard look at the deal” and killing it. He said that after he takes office next month, he may still seek to purchase the Skyland Center from the state by issuing a general obligation bond.
The city had proposed using a more roundabout bond-issuance and purchasing method that became the key concern in convincing the majority to kill the deal. The city’s intended purchase of the Skyland Center was essentially speculative, with no particular tenant in mind, but making it the city’s first permanent City Hall was one option. The city’s Development Authority would make the purchase and lease the property.
However, a 1983 Georgia Supreme Court case, Odom v. Union City Downtown Development Authority, ruled that it is unconstitutional for development authorities to purchase and rent property directly to a municipality. That’s because development authorities are intended to promote economic development, not support the government.
Earle Taylor III, the city’s bond attorney, said that a common way around that prohibition is to get an independent nonprofit organization to serve as the tenant, then sublease to the city or private tenants. In the Skyland case, he found an out-of-state entity called National Development Corporation to serve in that role. Taylor also said he considered finding a Georgia nonprofit that could expand its official mission to include such go-between status, but that it couldn’t be done in time for the Skyland deal.
Williams and some council members questioned whether that arrangement was open to legal challenge, and whether it was proper, even if it was legal. Another question was whether it would leave the city with enough control over its own City Hall property.
Williams, in an interview after the meeting, said Balch wrote a memo saying the Odom decision “drew a bright line” that could make the Skyland deal illegal. She also noted that former local state Rep. Mike Jacobs, now a DeKalb judge, previously legislated against a similar type of public-facility funding in DeKalb County.
“This is just not appropriate,” Williams said during the meeting. “We should not be using our Development Authority to build or renovate public facilities.” Instead, any purchase should be done by a “direct” method, “not [with] any appearance of subterfuge or back-door deals,” she said.
Ernst said he agrees “it was not the proper structure to purchase the property with. I am glad the structure died.”
Asked by council members whether the Skyland deal would survive a legal challenge, Taylor said, “I feel pretty good…but I can’t guarantee it.”
The possibility of unhappy local taxpayers was not purely theoretical. Catherine Bernard, who ran unsuccessfully this year for the local House District 80 seat, protested the deal during public comments, saying, “I think we’re getting ahead of ourselves on the purchase of the Skyland building and putting the city at legal risk on a number of fronts.”
Councilwoman Linley Jones was the only vote to approve the bonds. “This is a good deal,” she said, adding that she is comfortable with the quality of Taylor’s legal advice.
Councilman John Park noted he had expressed concerns during the previous vote “about being left holding the bag on this [bond] debt.” The re-vote gave him more time to think about those concerns, and the warning about the Odom case worried him, too.
Gebbia also voted against the deal after questioning its financial details and saying he agreed with Williams’ concerns. The ethics question about Gebbia’s BIA role that triggered the re-vote ended up being only a footnote in the decision.
BIA’s relationship with the council has caused repeated ethics concerns. BIA is a newly approved public charter school created by the council, but now operating as an independent entity and searching for a school site. The school board previously considered the Skyland building, but it appears the timeline won’t work, though BIA is also considering temporary trailers behind the building, among other locations around the area, according to Gebbia and Balch.
Gebbia and Councilman Bates Mattison were founding BIA board members. Mattison recently was hired as BIA’s interim executive director. An ethics review ordered by Williams found that Mattison can hold both jobs, but must recuse himself from BIA-related votes. Mattison recused himself from the Dec. 23 re-vote and did not attend the meeting.
Balch said during previous Skyland-related votes that Gebbia had no legal conflict of interest and could participate in votes if he chose. Gebbia participated in those votes. However, on Dec. 18, Balch issued a memo expressing concerns about “an appearance of conflict of interest” in Gebbia voting on the Skyland bond issuance while BIA sought to use some of the property. As a result, Gebbia resigned from the BIA board, and Balch recommended the re-vote.
Asked after the meeting whether he had previously recommended Gebbia’s resignation and re-votes on earlier Skyland-related votes, Balch said, “I can’t answer that without breaking attorney-client privilege.” But, he added, he had raised the issue of Gebbia’s appearance of conflict of interest “over and over” in internal discussions.