Atlanta City Council approves partially publicly financed Gulch redevelopment
By Maggie Lee
Atlanta City Council has OK’d a deal that will let a developer tap something approaching $2 billion in tax money that will be collected in the Gulch over decades to build up the Gulch itself.
The four pieces of legislation each got between eight and 14 “yes” votes. The votes came near midnight at a Council meeting that had begun at 1 p.m. on Monday with few breaks. It started with something like six hours of public comment, much of it against the deal.
But after the voting, Atlanta Mayor Keisha Lance Bottoms thanked Council for the support.
“There is a quote from Nelson Mandela: It always seems impossible until it is done,” she said.
Bottoms said Atlanta has done what it does best: made sure business and the community work hand-in-hand to make the city better.
The voting closes many weeks of controversy since Bottoms first announced the proposal, which has been under negotiation since the administration of former Mayor Kasim Reed.
Since announcing it in August, Bottoms has called it a “once-in-a-lifetime opportunity” and urged Council approval.
And opponents have argued since the beginning that the public incentives for the deal outweigh the public benefits.
A portion of taxes that will be collected in the Gulch — both sales taxes and property taxes — will be channeled to CIM Group, the California-based developer that’s proposing the project. Some of the money will be handed over roughly as it arrives in city coffers. Some of it will arrive in the form of bond proceeds: a city authority will sell bonds, turn the cash over to CIM, then pay off the bonds with sales taxes that come in by and by.
The city says a maximum $1.875 billion in 2018 dollars will go to CIM by 2038 on what could be a $5 billion, 12 million-square-foot construction project — if the company builds its largest possible plan. (And not everyone agrees that that first figure is correct.)
The city and the state will eventually collect full taxes in a space that’s now worth little to anyone, but on the other hand, that day is decades off.
Ambassador and former Mayor Andrew Young spoke for the deal.
“Seems like I’m always in controversy in the city,” he said.
But Young compared the Gulch deal to international terminal of Hartsfield-Jackson International Airport, the Olympics, MARTA — all moves that he said were controversial but turned out to be good deals for the city.
“Like the airport and like the Olympics, that money doesn’t come from the taxpayers … if there is no investment, there is no money,” said Young.
That is, there is no tax money collected in the Gulch if there’s no construction in the Gulch.
But former State Sen. Vincent Fort, one of the most prominent critics of the deal, sees it differently. He likened it to having two cars in your driveway.
If somebody steals one, he said, “you’ve still been robbed.”
Impacts outside of the Gulch
The vote makes it likelier that Norfolk Southern will move its headquarters to Atlanta. Jim Squires, the company’s CEO, has said the railroad wouldn’t move to Atlanta without a Nov. 5 City Council OK on the CIM deal.
Norfolk Southern wants to unload land it owns in the Gulch and roll the money into a new headquarters elsewhere in Atlanta. CIM would be the Gulch land buyer.
Some 850 jobs would be moved to Atlanta with Norfolk Southern.
It’s common enough for the city’s development agency to hand out various sweeteners to companies considering moving to the city.
But what’s uncommon is the scale of the Gulch tax abatement, and the development itself. For example, in 2015, Invest Atlanta granted some $12.6 million in property tax abatements to NCR when it moved into the city, into what was billed as a $260 million project, promising some 3,600 jobs.
Bottoms and her staff also often refer back to the public benefits negotiated in the deal: $28 million for an affordable housing fund, at least 200 below-market-rate residential units, $2 million in workforce training, $12 million for a citywide economic development fund and more.