By Maggie Lee
Atlanta Mayor Keisha Lance Bottoms went to Atlanta City Council on Tuesday to make the case that a proposed Gulch rebuild with heavy public incentives is a good deal. A nearly three-hour Council work session revealed some agreement with that, but a lot of skepticism too.
Bottoms and folks from her administration arrived at Council on Tuesday with a presentation. One of the slides shows the hole Downtown known as the Gulch transformed from a below-grade parking lot to something that looks like a smaller Atlantic Station: 40 acres’ worth of new city blocks and buildings. In charge of that transformation would be the CIM group, a developer that’s acquiring parcels in the Gulch.
But big, complex developments like that don’t follow the same procedure as someone building a house or store. There are negotiations. And asks.
CIM has asked for several things, according to the administration’s presentation. The headline one is financial, up to $1.75 billion for the development. That cash today would come from pledging some of tomorrow’s sales and property taxes that would be generated in a built-up Gulch.
The developer needs four pieces of legislation filed earlier this month to pass for the deal to go forward as proposed. Atlanta schools and Fulton County would also need to approve, since they also levy taxes.
The presentation didn’t include details on how various estimates were made. For example, retail and hotel space is “projected” to generate $35 million to $50 million in sales tax revenue annually, but there are no footnotes on what size hotel, what occupancy rate and what room price are assumed to generate that.
And several councilmembers asked if the city can even pledge more property taxes in this way, or if it’s subject to a cap.
Bottoms told Council that they would be given more information as soon as possible.
So with that background, here are some themes that will probably come up as Council considers legislation:
How about a multimodal passenger terminal — a big station for buses and Amtrak, right there on MARTA, too?
“That is not a consideration in this plan,” said CIM VP Shannon Crowell.
The development idea has its fans.
“I’m excited about the possibility of this development,” said Atlanta City Councilwoman Cleta Winslow. “For the last 30 years this area has been devoid of any type of development,” she said. Which means it’s been worth pretty much nothing in taxes for city, county or school operations.
But foregoing taxes to spur development in special zones across the city (called TADs) has an impact on city finances, said Council President Felicia Moore. It may not be a direct spend, it’s not the same as writing a paycheck to a police officer. But yet a police officer will need to patrol this development. Somebody’s got to pay.
“The city of Atlanta, we need to look at what we’re doing with TADs because our property tax assessments are going up and not down, people are being hit with high tax bills and we continue to roll back our taxes [city rates] because we don’t want to add additional burden to citizens. That’s not going to get any better, that’s only going to get worse,” Moore said.
How big would the development be? More, and maybe many more, Bank of America Plazas-worth of office space; plus retail, residential and hotel space. The presentation suggests four scenarios: four, eight and 12 million square feet for the Gulch. The most variable is office space: 1.8 million to 9.3 million square feet. By way of comparison, the Bank of America Plaza counts 1.3 million square feet.
That would amount to a lot of new space, in a city that has some existing vacancies.
“CIM doesn’t create any demand for office space, retail or anything else. They meet a demand. That demand could be met in taxable parts in the city or in TADs which provide benefits,” said Julian Bene, an outgoing member of the city’s development authority board. He also said the presentation underestimates the amount of money that will bypass the public purse. He puts the figure at $2 billion.
The administration said it’s negotiating for public benefits. As presented, the development would include 200 “affordable” units (at 80 percent AMI, per administration testimony. That means priced for families that make about $60,000 per year.) The city and developer are looking at a benchmark of 38 percent inclusion of minority and female business enterprises and some targets for hiring Atlanta residents for construction.
The fine print:
Gulch Development Plan Presentation, from the city of Atlanta