Some cheers, many jeers, greet mayor’s push for high-stakes Gulch deal

By Maggie Lee

By the end of a roughly 90-minute public meeting at Atlanta City Hall on Wednesday night, two things were getting familiar through repetition: the city’s pitch for up to $1.75 billion in tax incentives for a developer pursuing a Gulch re-do; and opponents saying the people of the city ought to get a lot more out of the deal.

Now the question is whether Atlanta Mayor Keisha Lance Bottoms can rally the support the deal needs from a City Council that’s been skeptical that the city needs to give away so much to attract development.

Part of the audience for a public meeting on the Gulch deal at City Hall on Wednesday. More folks sat in an overflow room. Credit: Maggie Lee

Part of the audience for a public meeting on the Gulch deal at City Hall on Wednesday. More folks sat in an overflow room. Credit: Maggie Lee

What Bottoms and her allies support is a pitch by the CIM Group, a California-based developer. CIM is looking to buy the land in the Gulch and build it up to something like a small Atlantic Station: 12 to 15 blocks of residential, commercial and office space. Depending how big it’s built, the development cost could come to some $5 billion. But it wouldn’t cost CIM $5 billion. Instead, up to $1.75 billion of taxes that would be collected in a built-up Gulch would go to CIM to offset their costs.

And once CIM’s bills are paid, years down the line, governments would indeed collect full property and sales taxes from the Gulch properties, to work on roads, run schools and more.

But skeptical members of the public say that what the community gets out of the deal is not nearly good enough, compared to what CIM would be getting with a public sign-off.

Bottoms paints it as a win. “These are funds that don’t exist today. There’s nothing being generated,” she said. “If there’s no action taken … it would remain a hole in the ground and there would be no tax money generated and not even an opportunity to consider funding other initiatives, infrastructure needs throughout the city.”

But Deborah Scott, executive director of Georgia Stand-up, a nonprofit with the mission of promoting economic justice and smart growth, said that other parts of the city need attention. So do other things in the city, like its broken sidewalks, residents who need job training, its schools, and its public transportation.

“The biggest concern,” Scott said ahead of the meeting, “is you’re talking about tax dollars being used for private development deals, which is a bad idea, particularly in an area that’s not really blighted.”

She called the Gulch deal economic apartheid: “It starves out the southwest side, the southeast side, the east side of atlanta that would normally, hopefully get some of this economic development.”

Atlanta Mayor Keisha Lance Bottoms with members of her administration and team of advisors took questions about the Gulch deal. Credit: Maggie Lee

Atlanta Mayor Keisha Lance Bottoms with members of her administration and team of advisors took questions about the Gulch deal. Credit: Maggie Lee

The list of things the city gets from CIM in return includes: $12 million for an economic development fund, $28 million for affordable housing subsidies citywide and some 300 or more below-market rate units of affordable housing mixed with market-rate housing. (Though the details about rents and other numbers leave some unsatisfied.) There’s to be a job training program that the administration says counts some of the top employers in the city, though details aren’t ironed out yet.

Laban King, who ran for Atlanta mayor as a long shot but fiery candidate last year, said that on the surface the Gulch deal looks great.

“But at the same time, it’s forgetting about the average person in Atlanta,” he said, pointing to proposed rents for the below-market-rate units that would be bankrolled by the developer, a measure meant to make sure Atlanta’s affordable for people all over the income ladder.

“When you’re saying that affordable is $1,000 for a studio, that is absurd,” King said after the meeting.

But like Bottoms and her team, the state sees it as a win too; though the state would forego its four-cent sales tax in the Gulch for years.

Atlanta needs office space, said Bert Brantley, chief operating officer for the Georgia Department of Economic Development, speaking to the crowd.

The more space, and the more types of space, the more options there are for companies considering Atlanta, he said afterward.

“In particular, office space with access to two transit stations, centrally located in the city, could be a great addition to our mix of offerings. Which is why the state Legislature approved the Downtown enterprise zone allowing for that sales tax recoupment in a project that is so heavy on infrastructure and fills a currently unproductive property,” Brantley said.

Of some 200 or so people crowded into the old City Council chambers for the meeting, maybe a few dozen wore red, or carried homemade signs for stopping the Gulch deal. Some shouted down the mayor and other presenters, demanding an end to gentrification, demanding more public input, a community benefits agreement and more.

the gulch

A view of the Gulch. The site has long been undeveloped. Credit: Kelly Jordan

For some, it’s hard to believe that the city will deliver on any affordable housing promise, especially after seeing the BeltLine running very late on its promises.

There also sat perhaps three dozen people in green t-shirts, or with “Greenlight the Gulch” stickers. That coincides the name of an ad campaign put on by CIM and is a phrase the mayor’s office has used. None of the folks wearing green or stickers approached by SR stopped to speak for this story.

But Erin White did want to talk about why she’s supporting it. She said she’s a west side resident, and came to the meeting because she was on the fence about the Gulch and wanted to learn more.

What sealed it for her?

“Right now, it’s giving us zero in tax dollars,” said White. The deal would generate something in taxes — and it would mean some cash for affordable housing.

Brionté McCorkle, an activist, community organizer and former Council candidate, speaking to SR earlier this month, said she thinks it would be better for the city to get ahead of big development projects like this with a to-do list, a checklist of what the city expects in exchange for incentives.

That list could include things like green space, walkablity, bike access, whatever the Council, the mayor and the community decide.

“Then we don’t have to get up in arms every time there is a development project,” said McCorkle, “because we’ve thought about this stuff in advance. The particulars would be worked out in every project, but the point is that we know the city would already have this comprehensive list of things.”

The next official Gulch action could come as soon as Monday, if the mayor asks Council to take action.

The deal would also need the approval of Atlanta Public Schools and Fulton County.

Maggie Lee is a freelance reporter who's been covering Georgia and metro Atlanta government and politics since 2008.

14 replies
  1. John R Adams says:

    I would feel much better about this if there was at least one other option (another proposal, from another bidder) on the table. Are there other potential developers who want to be involved? Has the city solicited proposals from competing developers? Why do we even believe that CIM will execute the project and meet all of the goals? If the design proposed by CIM the best?

    Think of this like you might if it were your own money, and you were going to build a home. Wouldn’t you talk to several architects? Wouldn’t you get bids from several builders? Wouldn’t you shy away from a builder who wants you to decide quickly, before you get any other quotes? Why is the mayor’s office is such a big rush to proceed with the first and only bid, and without any discussion of alternatives?Report

    Reply
  2. David Edwards says:

    John, this is not city owned property that the city can simply out up for bid (say like it did for City Hall East). This is a private developer seeking incentives to finance a private project. The city can negotiate a deal or say “no”, but it can’t seek competing proposals.Report

    Reply
  3. John R Adams says:

    David, are you saying that CIM already owns all of the land? I would strongly suspect that they don’t, but instead have secured options that allow them to own it — but at any rate, CIM clearly have sufficient control to put them in a position to request tax incentives. Doesn’t matter. The point is that they are trying to push a deal for which no one — including the mayor’s office or city council — has any data point against which to compare the merits of CIM’s offer.

    I still think that the artificial(?) sense of urgency raises questions about the proposal. The more they try to force it, the more wary I am.Report

    Reply
  4. David Edwards says:

    John, the city has a cap on how much of the total property base of the city can be included in TADs. So theoretically, the city should be evaluating this TAD request against any other TADs that it might want to consider in different parts of the city. That is the real trade-off they are making.Report

    Reply
  5. Julian Bene says:

    So many ridiculous statements here.
    1. First and foremost, as usual no mention of the price tag to Atlanta residents, which now looks like $2.6 Billion. The ‘benefits’ the mayor keeps touting are truly crumbs compared to the taxes that the billionaires would siphon off from the city and schools.
    2. The usual false claim that the Gulch pays nothing now, so it costs nothing to concede tax free status for 30 years. The offices that go in there would have gone somewhere else in the city where they would have paid taxes.
    3. “Atlanta needs more office space.” It’s called a market, guys. That’s why there are at least six major office projects under way in places around town where employers want to locate – 725 Ponce, CODA at Tech Square, etc. There is no reason for residents to subsidize office development when the market is perfectly capable of handling supply to meet demand. And let’s not create another glut like the one that wrecked the city’s finances from 2008-2013 or so.
    4. “A mini-Atlantic Station”? With 12mm sq ft it would be far bigger than Atlantic Station’s 2.5mm sq ft (per Atlanta magazine 1/11/18). Because The Gulch development proposal is ginormous it would be financially crippling for it not to pay any taxes for 30 years.

    The guys putting out all the misinformation here have a huge interest in fooling residents and having us pay for as much as half of their project. This Booster patter always succeeded in the past, which is why the city has made no progress on poverty and inequality in many years. It’s time for the nonsense to be called out. We let these billionaires walk away with this deal, there will be nothing left to take care of the city’s real problems. We’ll be scraping by if we let them pull it off.Report

    Reply
  6. Carrie Salvary says:

    An additional 12 million square feet of development on an existing poorly maintained and obsolete sewer system, spells disaster for Vine City. I hear no discussion of the unintended consequences of another flood in Vine City regarding this project.Report

    Reply
  7. westerly says:

    There hasn’t been “another proposal” in forty years…now just think about that. Developers haven’t and aren’t lined up to do all the heavy lifting required to rebuild the Gulch,Report

    Reply
  8. Westerly says:

    “The offices that go in there would have gone somewhere else in the city where they would have paid taxes” Try staying on topic regarding HOW THE GULCH proper gets redeveloped!!!! THAT is whats needed.Report

    Reply
  9. Not playin says:

    @Westerly

    Wise development is needed…no matter where it may be developed in the city….this isn’t wise…rushing to pass this initiative clearly illustrates where the loyalties lie for those who wish to greenlight the gulch….Report

    Reply
  10. John says:

    I am a senior and lifelong resident of this city. I have seen city government that addressed the needs of the resident of the city and not engage in risky “investments” with the peoples money and their futures and welfare. The way this “deal” was initially presented is very telling to me as to its merit. With stealth to the council and no formal announcement to the public and Madam Mayor wanted a vote in a few days. Clearly no one was expected to read the 600 page proposal. This was meant to be a “Pilosi” without the words publicly spoken. Why can’t we present the opportunity to developers with conditions and restrictions and go from there. Finally I have heard that we are headed for another economic downturn and it may happen sooner than later. Before posting this message I searched for myself. Several articles pointed to this impending challenge and stated current factors that point to its coming. Businesses write of losses every day. Can we do that?Report

    Reply
  11. Charles Blakely says:

    Some of the land is owned by the city, some by the railroads. They are the primary landowners of the gulch, checked it via Fulton County Tax Assessor’s recordsReport

    Reply

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