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.

Atlanta City Council chambers were packed Monday, ahead of the Gulch vote. Credit: Kelly Jordan

Atlanta City Council chambers were packed Monday, ahead of the Gulch vote. Credit: Kelly Jordan

“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.

Maggie Lee is a freelance reporter who's been covering Georgia and metro Atlanta government and politics since 2008.

7 replies
  1. Not playin says:

    Sold !!!!!!!!!

    down the river again, by the talented tenth….

    thanks Andy, Keesh and Kasim…

    one on a banana peel

    and the other 2 hopefully in prison …

    without VaselineReport

    Reply
  2. BPJ says:

    Do we get passenger rail and the Downtown multimodal station out of this? Do the developers realize it would be in their self interest to be at the convergence of several commuter rail lines?Report

    Reply
  3. JWK57 says:

    We get nothing until the deal gets done. Andrew Young got this one right…”Nothing from nothing leaves nothing”. Here’s a little math for ya, total all tax receipts from the Gulch for the past 20 years and see if we don’t surpass that in year 1 alone. And if the City wants a little quid pro quo for affordable housing…here’s XXX million dollars and go build it somewhere else…not on BOARDWALK!!!Report

    Reply
  4. Reinmart says:

    “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.”

    This is factually incorrect. CIM will be the sole purchaser of all bonds related to the Gulch.Report

    Reply
  5. Chris says:

    Now subtract the additional costs generated by people and firms in the Gulch: police, fire, library sanitation, education etc. Also subtract the net income from people firms and development that would have occurred in non-tax favored parts of the city but-for the creation of the this tax-scheme.Report

    Reply
  6. edgar12 says:

    The developers are the Resslers, who are only “here” (they live in 20,000 sqft mansions in Beverly Hills — you can find their addresses in their FEC campaign donation records) because Danny Ferry read some someone else’s mildly racist assessment of Luol Deng a few years ago, ultimately leading to the Hawks being for sale.

    Tony Ressler is a hedge fund billionaire who built a good portion of his money hoard by capitalizing off of the literal suffering of millions as a vulture capitalist operating in sovereign and municipal debt crises (Puerto Rico, Argentina, Detroit, etc.).

    He bought the Hawks (they’ve gotten worse every year since) and soon after got Kasim to give him $140M in public money to transform Philips/Insurance Company Arena from the NBA’s most affordable and family-friendly venue into one of the biggest and most expensive bars on earth.

    And now, Tony just got Keisha to give him and his brother Richard Ressler (aka, CIM founder and principal, aka L.A.’s biggest slumlord, aka longtime Kushner/Trump business partner) $2B to develop and own what is now the hole in the ground next door to the arena….

    But yeah, seems like all of this is on the “up and up.”Report

    Reply

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