By Maggie Lee
Three days after Atlanta City Council approved public financing for a developer planning a huge rebuild in the Gulch, the city’s economic development authority OK’d financial and development deals to advance the project.
By a 7-2 vote, Invest Atlanta’s board members ratified a deal that will see the CIM Group, a California-based developer, receive as much as $1.875 billion in sales and property tax dollars through 2038 that would be collected in a new, roughly 35-acre development.
Mayor Keisha Lance Bottoms had been lobbying Council since August to pass the Gulch development deal.
Part of why that job was difficult has to do with how this kind of tax incentive affects schools. Normally, part of property tax bills pays for schools. But in “tax allocation districts,” like the Gulch and many other zones of the city, an increment of property tax rises goes back to developers or business owners who are trying to build in that area.
It’s a way to spur development, but it also brings new residents, workers and customers to those zones while leaving the city and schools with less money to provide services in those zones compared to other parts of town.
In the Gulch itself, that’s mitigated some by the fact that there won’t be many residents and CIM will own and be in charge of infrastructure like streets.
But Atlanta Public Schools Superintendent Meria Carstarphen objected strongly to an earlier iteration of the Gulch deal that would have lasted longer — through 2048. She said the schools are already suffering from other tax allocation districts in the city that she says are mismanaged and effectively keep a lid on the funds APS can get to teach students.
On Thursday morning, APS board member Nancy Meister — who doubles as an IA board member — voted against the deal.
She said APS should have a seat at the table.
But the vote went against her.
Bottoms, speaking after the meeting, said she’s committed to having a good working relationship with Carstarphen, but on the Gulch matter, “we agree to disagree.”
Technically, the board doubles as the board of several legal entities and what they approved is a development agreement between IA and the CIM entity that’s doing the project, as well as a bond agreement to which IA is a party.
The board delayed a somewhat-related issue: a property tax abatement worth about $23.6 million to Norfolk Southern over 10 years on a proposed new Midtown corporate headquarters building for the railroad. Invest Atlanta is calculating that the company will mean 850 new jobs and 2,025 retained ones in the city.
Bottoms, who’s also on the IA board, said that item needs to be heard by a board committee, which is scheduled next week.
It’s related to the Gulch because Norfolk Southern’s CEO said last week the railroad wouldn’t move its headquarters to Atlanta unless it could sell some land it owns in the Gulch and use the cash to help pay for that new headquarters.