How Green Is My Alley

Corporate cash helps rehab an Atlanta neighborhood

To most of the world, Atlanta's East Lake Golf Club was a dilapidated eyesore. The once elegant club building had declined since its 1940s heyday. The neighborhood was even worse, located across the street from a crime-ridden public housing project called East Lake Meadows. Yet to Atlanta developer Thomas G. Cousins, the golf course was a little piece of heaven. Cousins had played there as a boy, as did Bobby Jones, a local hero and perhaps America's best golfer. So in 1993, Cousins jumped at the chance to buy the club.

Cousins, 67, had a philanthropic vision far grander than just renovating a golf course. He wanted the club to serve as an economic anchor to transform the entire East Lake neighborhood, especially the Meadows. Through his nonprofit Cousins Foundation Inc., he wanted to prove that a private businessman can do a better job than the feds of building and running public housing. And by involving the CEOs of 55 blue-chip companies, from IBM to General Electric Co., he hoped to spur Corporate America to rebuild public housing nationwide, using East Lake as a model. "We want to get socially responsible corporations to join and spread the word around the country," says Cousins.

Today, halfway into the project, Cousins has succeeded, although leaders of the former tenants group are bitter that they have been cut out of the process. Together with the Atlanta Housing Authority (AHA), which is funded by the federal Housing & Urban Development Dept. (HUD), Cousins' nonprofit East Lake Community Foundation has razed the 550 crime-ridden units of East Lake Meadows and built 180 neat town houses in their place, renamed Villages of East Lake. Crime is down, and housing prices in the adjoining neighborhoods have soared some 30%. What's more, Cousins, the CEO of Cousins Properties Inc., a publicly traded real estate investment trust, believes the gentlemanly game of golf can help lift the self-esteem of local kids. Boasts Erick Poteat, an eighth grader from the East Lake neighborhood who attends the East Lake Golf Academy: "My putting is great, my chipping is great, and my driving is great."

HUD HELPED. Cousins got involved in East Lake in 1993, when he bought the golf club for $4.5 million. He donated the club to his foundation, which ultimately invested more than $20 million in rebuilding the East Lake vicinity. Then AHA and Cousins tapped $33.5 million in HUD money to remake East Lake Meadows.

Cousins also set out to lure 100 major U.S. companies to become members of the East Lake Golf Club. Only CEOs can be members. But their companies pay a $200,000 charitable donation that has helped build a second course for the public at the Villages of East Lake. And the East Lake Golf Club is used by local kids, who play there through the Golf Academy and work there as caddies in the summer.

Cousins first wooed Atlanta's homegrown chief execs, including those of Delta Air Lines, Coca-Cola, and Home Depot. Like an elite chain letter, the CEOs of these companies then built on their relationships with CEOs around the country. Alton D. "Pete" Correll Jr., CEO of Georgia-Pacific, says it wasn't a hard sell. "We have customers from Japan, Korea, and Indonesia who stand in line to come and play at Bob Jones' home course," says Correll.

John J. Mack, president of Morgan Stanley Dean Witter and a friend of Cousins, recruited CEOs by getting them to visit East Lake and see for themselves the striking contrast between the new town houses and the decrepit original East Lake Meadows units, the last of which were torn down in March. Most compelling of all are the local kids, clearly excited about the game of golf. "Once we get a CEO on the grounds, I don't think Tom has had anyone turn him down," says Mack.

Still, Cousins' experiment shows just how difficult it is to solve America's housing problems. One critic is Eva Davis, the leader of the original tenants group. After living in East Lake Meadows for 29 years, the feisty 64-year-old grandmother has lost her community. With only 90 subsidized new units available so far, some of her fellow tenants accepted housing subsidies and got dispersed around Atlanta. Davis had to move, too, after the tenants group lost a lawsuit against the AHA last December. "They just used us to get what they wanted, and now they have kicked us out of the process," says Davis.

NO SITTING? Davis still wants to move back, which she may be able to do after the last 360 units are built next year. But she worries that the units will be beyond her means and that she won't be able to sit on her step and socialize, a practice now frowned on by management, she says. The Villages of East Lake is a mix of half public-housing tenants and half full-market-rent tenants, so strict rules must be enforced, says Gregory J. Giornelli, executive director of East Lake Community Foundation.

Davis and other displaced tenants present an issue that goes beyond Cousins' project. Much of today's new public housing is designed for the working poor, not the elderly and welfare populations it traditionally served, says Frank Alexander, a law professor at Emory University and co-counsel to the tenants. East Lake "is a phenomenal success from the perspective of what Cousins sought to do," he says. "The question is, who is going to care for the people who used to live there" and can't afford the new units? Cousins hasn't answered that question, and there's no easy fix. But at East Lake, he has at least come up with a little piece of heaven.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE