By Maria Saporta
As published in the Atlanta Business Chronicle on July 1, 2016
Developers of the Doraville Assembly project are putting together a financing alternative so the redevelopment of the 165-acre former General Motors plant can regain momentum.
“Plan B” would include a combination of government grants and loans as well as the creation of the Assembly Community Improvement District, which has already been approved by the City of Doraville.
Atlanta Business Chronicle reported April 15 that time is running out for the initial plan for the project due to a disagreement between the city of Doraville, DeKalb County officials and DeKalb School Superintendent Stephen Green, who has refused to allow the system to take part in the funding the project through a tax allocation district (TAD).
The project’s developer, The Integral Group LLC, still continues to prefer its initial plan to create a TAD endorsed by Doraville, DeKalb County and the DeKalb County School Board. But, so far, the DeKalb School Board has been unwilling to hear a formal presentation on the project, much less hold a vote to support the TAD.
So the Integral Group has been working on an alternative to allow the company to begin work on the $180 million in public infrastructure improvements needed to develop the site.
“We are putting the pieces in place that will allow us to pursue a Plan B,” said Eric Pinckney, Integral’s vice president of development who is in charge of the $1.6 billion Assembly project.
On June 22, the State Road and Tollway Authority awarded the Doraville Assembly project a $1.5 million grant and a $1.5 million loan so it could begin to design the most critical piece – the Park Avenue covered street that would go underneath the railroad and MARTA tracks.
“It provides us with an immediate ability to proceed with the design and to advance the program,” Pinckney said. “And it is further endorsement from the State of Georgia.”
Having direct access to MARTA and downtown Doraville are key to turning the Assembly project into an urban mixed-use development built around transit.
It will cost an estimated $50 million to build the covered street.
The rest of the public infrastructure funding – which would be invested in phases – would go toward streets, sidewalks, parks and water retention facilities on the large piece of property.
Pinckney said both the TAD option and the alternative funding option would be able to cover the costs of public improvements. They will proceed with whichever option will allow them to issue bonds by the end of 2016.
“The timeline we are committed to keeping is to have the bond issue in 2016 to begin design and construction in 2017 so we can deliver the product in 2018,” Pinckney said. Potential major tenants are interested in moving to Assembly, but they want to be sure the project will have the ability to pay for the public infrastructure, such as the Park Avenue covered street.
When asked about the elements of Plan B, Pinckney admitted it would be more complex than a TAD solution with buy-in from the school board.
“It is not less concrete. It’s just more complicated,” Pinckney said. “The ship can and will leave without them. But we want them to participate and be a partner – not just for our sake, but for the whole county.”
Integral, which has a history of creating new mixed-income communities in transitional neighborhoods, has seen the Assembly project as a way to unite the county.
If the school board were to favor the TAD approach, that could help spark development in all corners of DeKalb. Three existing TADs – Avondale, Kensington and Briarcliff – do not include the school board as a partner, and they have had a marginal impact. The school system collects more than half of the taxes in the county.
Pinckney said Integral will choose the alternative that will permit it to issue bonds in 2016. Meanwhile, it is moving forward with appraisals, economic development impact studies and other requirements needed to issue bonds by the end of the year.
Plan B would include the prospective community improvement district revenues, the State Road and Tollway Authority grant and loan, tax advantages related to Assembly being designated as a “brownfield” environmental cleanup site as well as one of the state’s Opportunity Zones, which provides a $3,500 tax credit for each new job created for the first five years.
The alternative likely would include other funding sources from various public entities such as the federal and state government agencies as well as MARTA.
“Certainly Plan B will be laser-focused on the public infrastructure on just the site,” Pinckney said.
By comparison, the TAD would generate more than the revenues needed, which would permit money to be invested to improve the area in other ways, such as the building of a new fire station.
Because decisions on how to invest the TAD funds would be made by all the participating partners, Pinckney said it would be “more of a collective, collaborative effort rather than each jurisdiction out for itself.”
Pinckney said Integral is a development company committed to building community, and it wants to bring the county together.
“The Doraville project will move forward,” Pinckney said. “We are committed to all our partners. One of the goals of Assembly is to unite DeKalb. We are not going to abandon the county. We are not going to abandon our transformation heritage just for this transaction.”
