Buckhead skyline from inside Lenox Square. Credit: Kelly Jordan
By Maggie Lee
The members of a Fulton County board that reviews economic development incentives turned down the developers of a would-be Buckhead office building. It’s the first time this year that a proposal has made it as far as the board and gotten turned down.
The owners of a parking lot at 359 East Paces Ferry Road were seeking a property tax abatement that would have been worth $2.2 million over 10 years on a proposed 12-story office building.
Representatives of The Loudermilk Companies told the board of the Development Authority of Fulton County that Buckhead lacks new office space for tenants that are looking for something move-in ready.
A tax abatement, they said, would help their proposed building make financial sense for would-be investors — and eventually result in something that Buckhead needs and where local people could work.
But after only a few questions and little discussion, it was clear a majority of the board was unconvinced. Five members of the board voted to reject the proposal, versus three who voted for it.
That vote comes about two weeks after another sign of some official skepticism of economic development incentives being proposed in neighborhoods that are already hot.
A proposed tax break worth $22.5 million over 10 years for an Eastside BeltLine development disappeared from Invest Atlanta’s last meeting agenda, amid signs that board members weren’t comfortable with it.
It’s growing more common to hear grumbles from activists and politicians about an “eroding” property tax base: that abatements and under-assessment of commercial properties are shortchanging the city, the county and their schools.
Atlanta Public Schools leaders have been especially vocal about a need to balance the needs of economic development with the needs of students.
The school system doesn’t take a position on any particular development, said Atlanta Board of Education Chairman Jason Esteves. But its position remains that they want to protect the county’s tax base and wants to see more thoughtful deployment of abatements.
A different proposed new development, in Atlantic Station, did get the OK for a property tax abatement worth $9.7 million over 10 years from DAFC’s board.
One of the prospective “Atlantic Yards” tenants is a Fortune 50 technology company that is considering relocating its headquarters from another state to Atlanta, said Terri Kerr, managing director with site developer Hines.
Kerr also told the board that the state of Georgia and the Metro Atlanta Chamber of Commerce have been involved in wooing this yet-unnamed possible tenant. The two buildings of the development would together come to about 515,000 square feet of office space at 170 17th Street, where there’s no building now. She said the property tax savings would be passed along to the building tenants, so it has no effect on the performance of the project to the investor.
She said that the site has some challenges that make it expensive to build, like leftover contamination from the old steel plant that used to be there, and the fact that the site is about 40 feet below adjacent buildings.
The developer first approached the board in 2018 and got preliminary approval for the abatement then.
The building is in the Atlantic Station Tax Allocation District — a special zone where development was jump-started years ago with cash that came from bond sales. The bonds have to be paid off over years with property taxes from the zone.
Therefore, it’s very important that developments happen there so there are property taxes that can pay off those bonds.
Almost the only discussion at the board on Tuesday was about paying off those bonds — and the fact that they could be paid off a little more quickly if the new building didn’t get an abatement.
By an 7-1 vote, the board approved the deal.
Map: Property tax abatements approved in Atlanta this year will be worth about $190 million over 10 years