Commercial development
is being done with tax subsidies, government grants and borrowed funds to
develop mixed-use sites. If these were
not available, the investors who bought these sites would have paid less for
these properties. To know if this will fail, you need to do an economic
evaluation of the property as if no subsidies were available.
The former Doraville GM
plant operated for decades as a single, large manufacturing facility and could
function again as an industrial park, but not until we are able to regain our
manufacturing base. Our current stagnation offers a zero-sum game of moving
retail jobs around to multiple sites with expensive apartments. This is unsustainable.
Tax money may be
diverted for Doraville redevelopment. Local Govt & Politics By Mark
Niesse and J. Scott Trubey - The Atlanta Journal-Constitution
A rendering of
the corporate campus portion of the proposed Assembly development in Doraville.
The Integral Group and partners propose converting the former General Motors
plant in Doraville into a $1.6 billion mixed-use development. Posted: 12:00
a.m. Monday, July 18, 2016
The developer
trying to revamp the abandoned General Motors plant in Doraville may be allowed to redirect tax
money from the
school system and other governments to pay for a concourse linking the site to
MARTA.
Integral Group
— along with other land owners on the site — could be given control over how to spend a portion of their
property taxes. That money, roughly half of the taxes paid, would be dedicated to a
covered street connecting the site to MARTA at a cost between $50 million and
$75 million. If approved,
the arrangement could be unprecedented in Georgia, said experts familiar with
public financing of private projects. It also could be used to fund other
infrastructure on site.
The DeKalb
school system, which has resisted contributing to the
project, wouldn’t have
a say over the diversion of tax money for the Doraville site. A spokesman for
the district expressed concerns about education taxes being devoted to a
private venture.
The Doraville
Downtown Development Authority, like economic development boards across
Georgia, has the power to provide tax financing incentives to encourage
business growth. The authority hasn’t yet finalized the incentives for the
plant’s redevelopment or determined how much they’ll be worth.
Doraville Mayor Donna Pittman walks through the construction site of Third
Rail Studios, one of the first developments at the former General Motors site,
Monday, May 2, 2016. Taxpayers could still be responsible for funding
redevelopment of the old GM factory in Doraville, even if the DeKalb County
school board won’t sign on. The project could advance if developers seek tax
breaks through local development authorities. That kind of public financing can
be done without the school board’s say-so and cut nearly $400,000 from annual
education revenue.
Backers of the
project, called Assembly, want to make the 165-acre area a
mini-city along I-285,
with the potential for high-rise office towers, retail and housing. DeKalb
schools didn’t sign off on an earlier incentive package, and this new
arrangement will mean the project will move forward at a slower pace, said Eric Pinckney, an executive with
the developer, Integral Group. “We are
committed to the full vision,” he said. “The only thing that is in question is
how quickly we can put (the infrastructure) in place.”
The street from the site to the MARTA station
is essential, Pinckney told
the development authority last month. Once businesses see that they’ll have
access to public transportation, they’ll commit to building on the site.
After Labor
Day, an unnamed out-of-state company plans to announce a relocation to the
Assembly site, bringing between 300 and 500 jobs to a facility that's as large
as 200,000 square feet, he said. An office developer is considering a
half-million-square-foot speculative development. Tax incentives
are a potent tool to attract businesses to relocate or expand in Georgia, but
none has previously been structured like the Doraville project’s.
The site’s
three property owners plan to create a community improvement district, or CID,
to impose a tax on themselves to raise public money exclusively for the MARTA
connection and future infrastructure improvements. The Commons, a
park within the proposed Assembly development, on the former General Motors
factory site in Doraville. The Doraville
authority, meanwhile, would provide a tax abatement to eliminate local taxes
equal to the CID tax, keeping the total tax burden for businesses on the site
cost-neutral.
Taxes paid on
the site totaled nearly $915,000 in 2014, with more than $460,000 going to the
county school system. The Assembly
project incentive plan is unprecedented, said Sarah Larson, a senior researcher
at Georgia State University’s Fiscal Research Center and expert on CIDs. The structure
would effectively give Integral, which controls the bulk of the site, an
outsized say over millions of dollars in public funds.
There are
currently about 25 active CIDs that tax themselves a little extra for items
like infrastructure, parks, security and beautification, she said. The Assembly
CID would charge its businesses 25 mills in property tax, the maximum allowable
under state law. Most CIDs levy about three to five mills.
CIDs provide an
important way for businesses to raise money for specific upgrades, without
having to wait on local governments to determine spending priorities, said
Yvonne Williams, president and CEO of the Perimeter CID.
“It’s a new
system rather than waiting on government to 100 percent finance everything,”
Williams said. “We want to have skin in the game. We want to be part of the
opportunity to create opportunities that add value to our properties.” The Doraville
Downtown Development Authority could vote in August on the specific value and
terms of the abatements. The developers
and the city of Doraville would have preferred to work with the DeKalb school
system on a different financing mechanism, called a tax allocation district, or TAD.
Unlike the
current funding proposal, a TAD would have preserved the current tax base for
the school system and other governments, and future growth in property tax
revenue would have been used to pay for infrastructure improvements.
The school
district could still participate in a TAD for the parts of the tax base that
aren’t abated by the development authority, said Doraville City Manager Shawn
Gillen. “We’re not
giving up. The TAD is the best path forward,” Gillen said. “The school district
is losing out on tens of millions of dollars. … We’re redirecting the tax
dollars to a specific purpose to allow the development to happen.” The school
system asked the developer to answer detailed questions about the TAD but
hasn’t received answers, said spokesman Quinn Hudson.
“It takes
resources to give kids a great education, resources to hire and retain the best
teachers, resources to provide the best professional development, and resources
to grow the best talent,” Hudson said. “The district is always concerned when
these resources, necessary to educate DeKalb’s 102,000 students, are put in
jeopardy.”
School board
Chairman Melvin Johnson said the board hasn’t discussed the TAD proposal or the
tax abatement plan. Tax incentives wouldn’t be the only funding source for
Assembly’s infrastructure.
The project
recently received a $1.5 million state grant, and developers plan to also seek
federal Transportation Investment Generating Economic Recovery (TIGER) grants
worth millions of dollars. In addition, the city of Doraville already approved
a tax allocation district for the site, and it could grow in value if the
county government and school system sign on.
Doraville
development financing
Property owners
of the 165-acre former General Motors site have formed a community improvement
district, a partnership that allows them to tax themselves to pay for
infrastructure.
The community
improvement district plans to impose a tax on itself to pay specifically for a
covered street and other infrastructure connecting the site to the Doraville
MARTA station. Two of the businesses in the CID, Doraville Sixty and Studio
Sixty, are majority owned by the developer, Integral Group. The third business
is Atlanta Real Estate Holdings, which is building auto dealerships on the
site.
The Doraville
Downtown Development Authority could vote next month to provide tax breaks
worth as much as the community improvement district’s tax, resulting in no net
increase in taxes for the businesses. That would have the effect of diverting
tax dollars from the city, county and local schools to infrastructure projects
on the property.
The tax breaks
could amount to roughly half the property taxes collected from the site. In
2014, taxes on the site totaled nearly $915,000.
Related
http://www.myajc.com/news/news/local-govt-politics/tax-money-may-be-diverted-for-doraville-redevelopm/nryzB/
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