“We think people will just jump all over it with good interest rates,” said Bill Butler, who once owned the building but sold out long ago. He is now director of development for Varden, which is owned by his friend Trace McCreary. The developer was willing to set aside 214 of the 612 apartments for tenants earning 65% of the median income, Butler said.

But McCreary balked when the federal government wanted a subset of those low-income units reserved for people at the 50% income level. (In metro Atlanta that would be about $48,600 and $37,400 for a family of four, respectively.)

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“Very low income” is the way Butler described those units, and not affordable for the company. He said he was among the group that bought the building a couple decades ago after the government rescued it from the savings and loan crisis. So he knows about the low-income restrictions that came with the sale, which he said won’t apply if it’s rebuilt as condos.

Butler said the talks with the government aren’t quite over: apartments with the right income mix are still on the table. Varden paid $39 million for the property and is investing about $40 million in the renovation, and needs a margin for profit, Butler said. Condos may be the only option. “If they won’t work with us, then we won’t have a choice.”

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