City Government

Published on December 14th, 2016 |

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Phoenix condo’s no-pay for water/sewer grows to 10 properties at $4 M-plus

By John Schaffner

(Update as of 12/17/16: This story has been updated to reflect that  Georgia Pacific refutes the city of Atlanta’s claims that it has not paid its water/sewer bills for the past 34 years.)

An issue of mismanagement in Atlanta’s Department of Watershed Management that was first reported this past summer with the possibility that Buckhead’s Phoenix condominium building may owe as much as $1 million in unpaid water/sewer charges, this week grew to 10 buildings that may owe $4,431,950.

Aerial photo of the Georgia Pacific Center, completed in 1982 at 133 Peachtree Street.

And apparently the list of nonpayers is likely to grow to many more accounts and many more dollars.

The city’s Utilities Committee, which is co-chaired by Buckhead’s Dist. 7 City Councilman Howard Shook, this week heard that the downtown landmark Georgia Pacific Center building at 133 Peachtree Street, which was completed in 1982, has not been billed for water/sewer service since it opened 34 years ago.

UPDATED MATERIAL:  A spokesperson for Georgia Pacific told WSB-TV reporter Richard Belcher on Friday that the city’s DWM was wrong in it accusation that the company had not paid its water/sewer bills since 1982. The GP spokesperson explained that the GP building has four water meters–three of which billed for both water and sewer usage and one that is not connected to the sewer system and is used for the building’s air-conditioning chiller units. The spokesperson said it has always paid the bills for all four water systems and just paid the city $400,000 this past month for water/sewer service.

It was one of a list of 10 properties that DWM has identified that has not been properly billed for water/sewer service for years, including Buckhead’s Brighton Gardens senior living facility, a Publix supermarket on Piedmont Road and other major accounts including office buildings, etc.

Because DWM says it only has accurate billing/collection records that go back to 2007, it is only going to be able to back-bill Georgia Pacific $1,899,432 for the 34 years of free water/sewer services. The amounts listed for Brighton Gardens and the Publix were $526,770 and $193,552 respectively.

The total amount due for the nine new buildings disclosed to the Utilities Committee on Tuesday by DWM was $3,945,950. Add to that the $486,000 that DWM has determined it will back-bill the Phoenix condos for its water/sewer services and the total comes to $4,431,950 for now.

But that apparently is not the end of it. WSB-TV’s Richard Belcher, who has been following this story for months (as has BuckheadView.com), reported Tuesday night that he had been told that day by a spokesperson for DWM the department is “closely examining 30 other major accounts” which may have similar billing/collection problems.

The Phoenix on Peachtree condominium building, which opened in 2001.

(To view Richard Belcher’s Tuesday night report on WSB-TV, go to: http://www.wsbtv.com/video/local-video/atlanta-skyscraper-never-billed-by-watershed-in-34-years_20161214001046/475733813 .)

This past July, BuckheadView reported that investigations by CBS46 and WSB-TV’s Belcher found that the Phoenix homeowner’s association had not been properly paying the city of Atlanta for water and sewer services for almost 15 years. The Phoenix is located at 2881 Peachtree Road.

“WSB had reason to suspect other, similar situations and after a lot of back and forth obtained DWM data showing that several large customers (including North Atlanta High School) had also been under the radar and had received ‘Demand Letters’,” Councilman Shook told BuckheadView Wednesday.

“DWM is reviewing their accounts, starting with the large meter customers, to search for others,” Shook wrote BuckheadView in an email Wednesday. “There have now been two batches of Demand Letters with approximately another 30 accounts in the review stage.”

Shook wrote to BuckheadView, “Then they will start slogging through the small meter accounts.  It may be that amount of unbilled sewer use from this group may reach a higher total than the large meter accounts,” he added.

The five Demand Letters discussed during the City Utilities Committee meeting Tuesday and all dated Dec. 8 were to GP Center Holdings, LLC (Georgia Pacific building) for $1,899,432.22;

The Brighton Gardens senior living facility in Buckhead.

Brighton Gardens for $526,770.03; YMCA of Metropolitan Atlanta, Inc. for $179,725.10; Flight Safety International, Inc. for $128,818.40 and Legacy STATS 300 LLC (Stats Restaurant & Bar) for $162,521.47.

As for the Phoenix situation, WSB reporter Belcher found the homeowners’ association knew it wasn’t being billed for at least 12 years. “It’s shocking to me. If everyone knew this story, it would cause outrage to everyone,” Phoenix condo owner Jack Richardson told Belcher in July. Richardson, a financial advisor, moved into the building in 2001, just after it opened.

Richardson became aware of the billing problem from a homeowners’ association audit that stated: “As of December 31, 2003, the association had not received a bill for a meter that services common areas…This has been a problem from the beginning.”

Richardson told Belcher that he was told the homeowners’ association would pay the bill. But it did not. According to reports, after members from the HOA board approached the city last fall, the city found meter and billing problems at the condo that stretched back perhaps as far as 2001. As of October 2015, the HOA started paying both sewer and water bills.

City Councilman Howard Shook

City Counclilman Howard Shook

“DWM cannot effectively explain what the protocol currently is for making sure that accounts are properly opened and monitored; nor can they say how far back these problems go, or how long

it will take to review all of the accounts,” Shook reported in his email to BuckheadView.

“In fairness to DWM’s current leadership, it is clear to me that these problems greatly predate them, but…,” Shook wrote. “I think this is the biggest debacle for DWM since the disastrous meter replacement program, when thousands of meters were either defective or incorrectly installed.”

An Interesting Coincidence?

It may be pure coincidence, but BuckheadView has discovered that there has been a long-standing relationship between the Georgia Pacific Corporation and water/sewer issues and management of the city of Atlanta, dating back to the late 1980s and including Atlanta’s self-proclaimed sewer mayor Shirley Franklin.

Lee M. Thomas

The central figure in this relationship was Lee M. Thomas, former head of the U.S. Environmental Protection Agency from 1985-89 who later was with Georgia Pacific Corporation and became its president and chief operating officer in 2005, during the time Shirley Franklin was Atlanta mayor.

Prior to Georgia Pacific, Thomas was chairman of Law Companies Environmental Group, Inc.

Former Georgia Gov. Sonny Perdue appointed then Georgia Pacific President Thomas to the Georgia Environmental Facilities Authority (GEFA) Task Force, which helped secure a $500 million GEFA loan program for Atlanta, according to city of Atlanta City Council legislation, to help fund major sewer system infrastructure improvements.

Thomas is named in the legislation passed January 5, 2004 and signed by Mayor Franklin four days later.

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