By David Pendered
Midtown took a major step Thursday in its evolution into a hub of high tech business when Atlanta’s development arm approved the issuance of up to $314 million in bonds to help fund the construction and equipping of the future global headquarters of NCR Corp.
Atlanta’s development officials view NCR as a potential transformer of the city’s residential and business communities.
For starters, construction costs of NCR’s campus are estimated at $260 million. That represents a lot of materials and labor. The city provided NCR with $28 million for equipment, which will have to be purchased and transported into NCR’s global headquarters.
Eloisa Klementich, managing director of business development for Invest Atlanta, the city’s development arm, said the agency intends to encourage NCR to hire some workers who pass through Atlanta Workforce Development Agency.
Once the employees move into the new offices, they’ll bring significant salaries that could boost the nearby retail and real estate markets.
The average annual salary is $70,000 for the 3,600 employees that NCR intends to place in the building, according to Invest Atlanta’s projections. City officials hope to convince a number of those well-paid employees to reside in the city.
“We expect construction to be complete in 2017,” Klementich said at Thursday’s meeting of the board that oversees Invest Atlanta. “In the meantime, we’ll be working with AWDA and housing during their transition.”
The funding transaction is more complicated than many that Invest Atlanta handles.
The project required the board to approve four resolutions. The project has two phases and two lessees:
- Lease purchase bond with Cousins, as fee owner, for real property – $210 million;
- Lease purchase bond for equipment, with NCR – $20 million.
- Lease purchase bond for real property, with Cousins – $76 million;
- Lease purchase bond for equipment, with NCR – $8 million.
Invest Atlanta is to make payments on the bonds with money received from rent and other payments, according to terms of the bond.
Terms do not appear to mention any claw-back provisions due to Invest Atlanta in the event that NCR does not create the number of jobs anticipated.
This is the description of the project that’s provided in the bond resolution for $210 million, which represents the largest issuance in the deal. Invest Atlanta is entering a lease agreement:
- “With Cousins Spring & 8th Streets LLC, a Georgia limited liability company (the “Company”), under the terms of which the Issuer agrees to issue its revenue bonds for the purpose of paying the costs of the costs of the acquisition, construction and equipping of one or more office buildings consisting of approximately 500,000 rentable square feet and related parking deck located on an approximately 2.9 acre site at Technology Square in the City of Atlanta, Georgia (the “Project”), to be constructed by the Company and leased to the Company for subsequent sublease to NCR Corporation (“NCR”) as the first phase of its North American headquarters, in the City, all as is more fully set forth in the Lease Agreement, and the Company agrees to pay to the Issuer specified rents and other payments which will be fully sufficient to pay the principal of, the redemption premium (if any) and the interest on the Bonds hereinafter authorized as the same become due and to pay certain administrative expenses in connection with said bonds;”
In addition to Atlanta’s incentive to lure NCR to the city from Gwinnett County, the state of Georgia is making its Opportunity Zone job tax credits available to the company. The maximum job tax credit is $3,500 per job. The credit is taken against the business’s state income tax liability and payroll withholding tax, according to the Georgia Department of Community Affairs.
Invest Atlanta’s projections indicate the project is well worth the effort to negotiate the complexity.
The development is projected to generate $2.3 million in the first year property tax, with the bond. The current property taxes amount to $93,178, according to Invest Atlanta.
Over a 10-year period, the project is expected to generate total property taxes of $37.9 million with the bond.