Chelsea Propco TIC I LLC and Chelsea Propco TIC II LLC filed suit Oct. 15 in Fulton County Superior Court against the city and City Council members Tracie Arnold and Joe Carn. The complaint accuses the city of violating the companies’ constitutional rights and alleges that Arnold and Carn engaged in fraud, racketeering and wrongful interference with the companies’ business. The allegations have not been proven in court.

The lawsuit says the companies bought the 474-unit property at 2135 Godby Road in 2022 and spent more than $4 million on renovations. It alleges that city inspections and certificates of occupancy needed to rent vacant apartments were delayed or withheld beginning in 2024, reducing occupancy and revenue.

The companies further allege that an October 2024 warning notice listed the same violations for all 44 buildings, including violations for buildings and a swimming pool they say did not exist. They say the city demanded a $3 million deposit in a city-controlled escrow account and use of city-approved contractors before addressing the cited conditions. The complaint alleges that the owners were also barred from leasing vacant units while the violations remained unresolved.

The property’s lender foreclosed in February 2025, accepting a bid of $40.137 million, according to the complaint. The plaintiffs compare that price with a March 2024 appraisal of more than $55.1 million and attribute the decline to the city’s actions. They also allege city officials discouraged a prospective buyer from completing a purchase.

After the foreclosure, the property passed to new owners associated with Contour Development and was renamed the Ivy. The complaint alleges that the city later approved renovation permits for the new ownership, while city manager Lindell Miller was fired after issuing a stop-work order over unpermitted work and refusing requests to waive permit fees. The suit cites Miller’s sworn testimony and allegations in a separate case brought by former code-enforcement supervisor Jerry Silver; those accounts are referenced in the complaint and are not findings in this case.

The companies seek damages from the city under federal civil-rights law and from Arnold and Carn under Georgia law. Their requested relief includes at least $14.963 million, attorney fees and punitive damages; their racketeering claim seeks damages of at least three times their actual losses. The complaint requests a jury trial.

The filing names the city, Arnold and Carn as defendants. The material available for this report did not include responses from them, and the lawsuit does not establish that any defendant committed wrongdoing.