Augusta’s Urban Redevelopment Agency and the city itself were rewarded after the risk they took on the Foundry/Beacon Station apartment project bonds were paid back four years earlier than required. That sum was around $28 million.
“The city is getting its money back,” said former Augusta Mayor Bob Young, who also serves as chair of the Urban Redevelopment Agency. “It increases the city’s bonding capacity by the amount of bonds that are being paid off, and the city will be paid for the property that the complex is on.”
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Hawthorne Welcher, who also works with the URA and is director of Augusta’s Housing and Development department, is encouraged by the success of this project.
“The intent was to serve as an economic stimulant and be a catalyst for future economic development in the Laney Walker / Bethlehem area,” Welcher said. “The thought wasn’t for the city to get into the apartment-constructing business, but we did need to set an example.”
Welcher said that other developers have taken note of the project’s success.
“As a result, you have seen other market-rate apartment developers that have sprung up in the surrounding areas,” he said. “It’s increased the population in the downtown area and now the city of Augusta has a shiny toy that has proven to be both popular, due to its 93% occupancy rate, and profitable for the city.”
The $1.3 million that Housing and Development got back for the land cost of Beacon Station will now be reinvested into future housing projects.
“You can’t build on that which you don’t own. That project would have been impossible had the land that Beacon Station sits on had not been acquired,” Welcher said. “So, we recouped that money and can continue developments of that kind. At this time, we haven’t committed to what the next project will be, but it will be something of a community and economic development activity, such as affordable housing, small business development, job creation, et cetera.”
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Even when the plan was approved by the Augusta Commission in 2017, some members pushed back. The plan was passed despite opposing votes by Mary Davis, Ben Hasan and Sean Frantom. Marion Williams expressed disapproval but did not vote.
Hasan expressed concern about the level of financial risk that would arise from committing more than $27 million to getting the apartment project off the ground.
“The way the plan ended up is not where it all began,” Hasan said. “When it ended, I was finally in support of it, but we had to work to get it there. I wouldn’t recommend a project like this one in the future at all because subdivisions, apartments, etc., are coming up all on their own accord now. Investors are investing their own money.”
Welcher said that before the Beacon Station project got the green light in 2017, the financial structure of the deal was tweaked multiple times. He said it was a deal several years in the making.
Hasan said now that developments are already getting off the ground throughout the area, there’s no need for the city to make that type of investment again going forward. In terms of committing to a similar project, Hasan said it’s all a case-by-case basis.
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“Augusta had never done that before. The city took a risk, but it was a methodical, well-calculated risk,” Welcher said. “What got us over the finish line was the level of protection and assurances we could bring to the city on those bond payments, assuring them that they would be paid back in seven years by the developer. However, at the rate that market-rate developments are coming up in Augusta, I don’t anticipate us going back to the coffers at that level, not downtown.”
Now that Augusta is flush with market-rate housing, Welcher said his focus will start to shift.
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“We want to build a community. We now want to focus on affordable housing,” Welcher said. “We have enough market-rate. If there is a ‘Beacon Station 2,’ we’d be looking at affordable units being a part of that.”
Hasan chimed in on the subject of affordable housing as well.
“We have to figure out what affordability looks like,” Hasan said. “I think Housing and Community Development has done a great job, but we still have to determine how best to do that in Augusta- Richmond County.”
Tyler Strong is the Business Editor for The Augusta Press. Reach him at tyler@theaugustapress.com.
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