Buyout in Bulk: The Jackson Square Condominium Acquisition

Inland Flooding 8/1/2008 DeKalb County

DeKalb County, GA – Jackson Square condominium complex sits on the banks of the North Fork Peachtree Creek in DeKalb County, Georgia. Constructed in the 1960s, each of the original 11 buildings contains eight, two-story townhouse-style rental apartments. In the early 2000s, the complex was sold, and the apartments were converted into individually owned condominiums.

Built prior to the creation and use of federal flood maps, at least four of the apartment buildings sit below a Base Flood Elevation (BFE) that was established in the 1970s for the area. Though the frequency of events is uncertain, local reports indicate that through the years since Jackson Square’s construction, parts of the area have flooded a number of times.

“Because the branch of Peachtree Creek runs through that area, every time we had a significant rain event, water intruded into the Jackson Square complex,” said Willie Greene, assistant director for the DeKalb County Public Works Department’s Roads and Drainage Division. “Every time we would get a flood situation, the fire department would have to go out with boats and rescue vehicles.”

In June 2003, following the condo conversion, and after most of the units had been occupied, North Fork Peachtree Creek overflowed and flooded sections of Jackson Square again. Four of the buildings that sat below the BFE – 32 homes in all – had more than 1½ feet of water in the first-floor living space.

The Jackson Square homeowners’ association began inquiring into possible solutions to the problem of repeated flooding. DeKalb County hired a local engineering firm to assess the creek, bridges, and other structures in the waterway, as well as the surrounding terrain, to look for causes for the flooding as well as ways to decrease flood levels. Upon completion of the study, the firm’s final recommendation was to purchase and remove the four most threatened structures in the complex.

Before work on the acquisition project could even begin, Hurricane Ivan impacted Georgia in September 2004. Once again, Peachtree Creek’s North Fork overflowed, and the 32 homes were inundated with water, this time reaching higher than two feet on the first floor. The homeowners in those buildings decided they’d had enough.

“We started with a series of neighborhood meetings,” said Greene. “We went in to let them know that acquisitions were a possibility and to determine what their reaction would be, and they really jumped on the option of buyouts.”

The Jackson Square acquisition was notable in that it was one of the first condominium buyouts to be performed in the State of Georgia. One of the aspects that made the condo acquisitions more challenging was the level of coordination that was necessary among all the involved parties.

A typical property acquisition is conducted between a local government and a homeowner (as well as any lawyers and mortgage companies that may be included). In the case of Jackson Square, negotiations involved not only the homeowners of the condominiums being purchased, but the homeowners’ association, the property management company, the different parties’ legal representation, and all the individual mortgage companies as well. In addition, as the property was communally owned, the homeowners in Jackson Square that would not be bought out also were involved in the discussion, and ultimately had to be reimbursed for the land that was sold.

“Right from the beginning there was very little opposition from either the people being bought out or those who were remaining,” said Greene. “DeKalb County has a very proactive acquisition program, and we’ve completed more buyouts than many of the other metro counties. The residents of Jackson Square knew our track record, and they knew there was a good possibility we could get a grant through the entire process successfully.”

Once DeKalb County officials knew that the Jackson Square residents were in favor of a buyout, they applied for a Pre-Disaster Mitigation (PDM) grant through the Federal Emergency Management Agency (FEMA). The PDM grants provide funding to state and local governments for the implementation of cost-effective measures to reduce the risk of injury, loss of life, and damages to property. Grants are awarded on a competitive basis and require a cost-share. FEMA funds 75 percent of the grant; the remaining 25 percent must come from non-federal sources, such as local or state governments.

Residential acquisitions involve offering market value to owners of floodprone properties that have suffered repetitive damages. As most property acquisitions deal with single residences, prices for the homes can vary significantly, but as the residences in Jackson Square all were built the same way, the final offers were similar in amount.

The final grant awarded for the purchase of the 32 condominiums was approximately $4.5 million.

Once an acquisition has taken place, the purchased land is returned to its natural state as much as possible, and is maintained in perpetuity by the purchaser as green space. Federal restrictions govern any future development that may occur in the area, which must be compatible with open-space, recreational or wetland management requirements.

In September 2009, record-setting rainfall caused widespread flooding throughout northern and middle Georgia. North Fork Peachtree Creek once again overflowed, pushing water into the areas once occupied by the four buildings. If the condominiums had still been in place, estimates indicate the water would have reached as high as six feet in some of the homes.

“I was just happy that we were able to get Jackson Square through and get the grant,” said Greene. “If there were other group acquisitions like this, I believe we could tell other communities that this is the way they might want to try it. Most of all, the thing that cannot be overemphasized is that you have to get a community to gel as one voice, and to say that this is what they want to do.”​​