One new Gulch idea
that needs to be discussed is the covering of the railroad yard with a platform
that would cost an additional $500 million. The train yard is 40 feet below
ground level. Enclosing the train yard would
help to secure the yard and underground utilities could be used above. But no
high-rises could sit in a platform. This is a 27 acre site.
There are too many
special interests asking property owners in the City of Atlanta to donate $1.75
billion in tax dollars to this project. The Gulch is near the Mercedes Benz
Stadium at MLK Jr Drive SW and Olympic Centennial Park Drive NW.
Atlanta City Council asserts
itself as Gulch talks enter new phase,
By J.
Scott Trubey, The Atlanta
Journal-Constitution
Atlanta City Council hit the pause button this week on Mayor
Keisha Lance Bottoms’ push for up to $1.75 billion in
public financing to redevelop the Gulch.
The move shook many City Hall observers. The council seldom
asserted itself in the prior eight years under former Mayor Kasim Reed, and for
some, the legislative branch’s new-found backbone is a welcomed change. But
others worry the council’s emerging independence could bog down City Hall — at
exactly the wrong time.
Eight council members, a majority of the district and citywide
seats, have co-sponsored legislation seeking an independent review
of the Gulch funding proposal to examine the public costs and benefits of the deal. Such
an audit, if approved by council, could slow down the process by weeks or
months.
Either way, negotiations between the city and a developer that
wants to build an up to $5 billion mini-city downtown will soon enter a new,
potentially unpredictable, phase.
Critics of the Gulch deal say the council must put the proposal to
the strictest scrutiny and be prepared to walk away, while supporters say
delays could scuttle a viable effort to revitalize downtown.
Bottoms appears up for a fight with City Council. She suggested in
an interview there’s likely little flexibility in negotiations with developer
CIM Group.
And any delay, Bottoms said, would be “a deal breaker” for a
Fortune 500 company that’s looking to relocate its headquarters in Atlanta,
depending on what happens with the Gulch. She wouldn’t name the company.
Asked if the developer is open to make changes to the proposal,
Bottoms said, “This is the deal that’s been negotiated.”
The Atlanta Journal-Constitution has previously reported that
Norfolk Southern is the Fortune 500 company that owns key pieces of the
development site, and the railroad giant is
also scouting Atlanta — in particular, Midtown — for a new headquarters location.
Norfolk Southern wants to sell its Gulch land as precondition for
relocating from Virginia, Gov. Nathan Deal said Tuesday, urging council support.
Under Reed, the council often acted more like a rubber stamp than
a check on public financing of marquee projects, such as Mercedes-Benz Stadium,
political observers said. But with seven new members entering office in January, the council demanded more
time to process an up to $5 billion development deal that could reshape
downtown.
Michael Leo Owens, an Emory University political science
professor, said the city needs council to serve as a check on the executive.
Greater transparency in the deal is worthwhile for Bottoms, too, he said.
Developers stand to make “crazy money” off the deal, Owens said, and it’s
appropriate to have a thorough vetting.
Angst in the city is real. Residents of in-town neighborhoods are
fearful of gentrification and being priced out by development.
“They’re committed to not being run over by progress,” he said.
“They want to share the progress.” But there’s also risk for the council. “If
the council is going to do this independent thing, it has to be good at what
it’s doing,” he said.
Bottoms ran as Reed’s chosen successor, but most of the new
council members did not rely on Bottoms’ coattails to win their seats. Some
campaigned at least in part on changing the culture of City Hall.
“Some of them believe they’ve come in with a mandate from their
constituents,” said Williams Boone, a political science professor at Clark
Atlanta University.
Search for answers - At Monday’s council meeting,
a parade of residents assailed the project, deriding the deal as a giveaway to
developers.
Bottoms and CIM have pitched the project as one that will pay for
itself, using future expected sales and property taxes to finance vital
infrastructure needed to make the site feasible.
Critics like Julian Bene, a former board member of Invest Atlanta,
the city’s development agency, said they are wrong. The deal will hit the
city’s budget because businesses that might have located in other areas of the
city and contributed their full taxes to the general fund are likely to locate
or expand in the Gulch where the tax dollars will stay there. That means a
heavier tax burden for everyone else, he said. The council has not determined
what an acceptable deal looks like.
Bottoms touts the public benefits. - CIM wants to build a mix of
office towers, apartments, retail and hotels between
the Five Points MARTA station and Mercedes-Benz Stadium.
It has made commitments for at least 200 units of affordable housing, a $28 million donation to
a housing trust fund and other concessions. “To say it’s not enough, that’s not
accurate,” she said.
Bottoms scheduled a Wednesday public hearing at City Hall to
answer residents’ questions. Councilman Amir Farokhi, who represents Old Fourth
Ward, said no one wants talks to linger for months. “I think we want to get
some sharper answers in the coming weeks and hopefully come to an agreement —
or not — and move forward,” he said.
Separately, Amazon has scouted the Gulch and CIM’s proposal for
its second headquarters. But if council approves tax incentives, the project
will go forward either way, even if Amazon doesn’t bite, though likely on a
smaller scale, the developers have said. No tenants have been announced.
Crisscrossed by freight and MARTA rail lines, the Gulch sits 40
feet below street level. CIM said a $500 million platform, funded by the future
tax revenue, is needed to facilitate redevelopment.
A.J. Robinson, CEO of Central Atlanta Progress, a downtown
business coalition, said he’s optimistic an agreement with CIM will emerge. The
property and sales tax dollars needed for the infrastructure only exist with if
the project is built, Robinson said. “The deal structure has been misunderstood
as a public handout to the development team. It’s not — the city doesn’t have
the public funds to do that,” he said.
Atlanta City
Councilman Amir Farokhi speaks during a council work session related to plans
to redevelop downtown’s Gulch. The up to $5 billion project, which could
include $2 billion in public financing, will require Mayor Keisha Lance Bottoms
to convince the council that the skyline-altering project is worth the public
investment.
‘Public fatigue’ - Councilman Andre Dickens,
who holds a citywide seat, said the deal has room for improvement. He said the
administration needs a formal community benefits agreement. Right now, under
the proposal, there are minority hiring goals. But those need to be iron-clad
requirements, he said. With the city facing an affordable housing crunch, there
should be a requirement for more units at a lower price.
Council members also want to know all investors, contractors, lawyers
and lobbyists tied to the deal — to eliminate the risk of conflicts of
interest.
Council President Felicia Moore said that, given the cloud of a
federal corruption investigation at City Hall, and the project’s origins under
the Reed administration, the deal warrants more scrutiny. Before taking office
as president, Moore represented District 9 for 20 years. She was often one of
the few dissenters on council during the Reed administration. She said Reed
often had the votes he needed before legislation was ever filed, and votes
sailed through without much council input.
“I think half the council being new and not sort of indoctrinated
in the way things used to be certainly is a motivating factor, and has helped
get some veteran members to come on line,” she said. Five of the eight
co-sponsors of the audit legislation are freshmen members. Farokhi said affordable housing is one of his top concerns. He
also wants assurances that space for future commuter rail is preserved.
Roads on the 40-acre site would be built in part with public money
and owned by CIM. Farokhi said the public needs to know what that means for
public access. For instance, he said, would protesters be arrested for walking
on the development’s streets?
“The size of the deal requires us to be prudent and thoughtful,”
he said. “Most folks want to see something happen at the Gulch, but there’s
public fatigue of public financing of mega-deals.”
Howard Shook, a city councilman who represents Buckhead, said he
wants development in the Gulch, but he called the CIM proposal “too rich for my
blood.” He said he isn’t sure CIM will be very flexible. The company spent a
lot time and effort negotiating with the city, state and Norfolk Southern.
“I think they walk before a couple more council votes get rounded
up,” Shook said. “Which is ironic because you might have more council members
who think the longer this goes the more valuable my vote is.” He was also
critical of the call for an audit. “I don’t need a consultant to tell me how to
vote,” Shook said.
OUR REPORTING - The AJC first reported the
city and CIM Group’s talks on a potential 10-figure public financing package
for the Gulch project. AJC reporters have also looked at the potential costs
and community benefits of the up to $5 billion project that could remake a
40-acre site into a mix of offices, retail, hotels and residences. Monday,
Bottoms called off a potential vote on the deal in order to give City Council
and the public more time to examine the proposal. Bottoms has called a public
hearing Wednesday at 6 p.m. at City Hall.
GULCH REDEVELOPMENT - Scope: Developer CIM Group
outlined a project of $3.5 billion to $5 billion. The CIM proposal could grow
to more than 9 million square feet of office space, 1,000 residences, 1,500
hotel rooms and 1 million square feet of retail space.
Partners: California-based CIM was co-founded by Richard Ressler,
whose brother Tony is the lead owner of the Atlanta Hawks. The Hawks also are a
Gulch partner.
Incentives: Documents obtained by the AJC project public financing of $900
million to $1.75 billion, though those figures could grow. It would be funded by
a portion of sales taxes generated on site and bonds backed by expected future
increases in property taxes.
Community benefits: Mayor Keisha Lance Bottoms’ office outlined a package of
affordable housing commitments, jobs training and other community benefits,
including: $28 million investment in a citywide affordable housing trust fund;
the greater of 200 residential units, or 20 percent of the total built, set
aside as affordable for people making 80 percent of the area median income (or
a 1 bedroom rent of about $1,100); $12 million toward an economic development
fund; $12 million for a new fire station; a new Atlanta police mini-precinct;
$2 million to an Atlanta Committee for Progress workforce program; 38 percent
minority-and women-owned business participation and 10 percent equity in the
project to minority and or women-owned businesses.
Sources: City of Atlanta, CIM Group and AJC analysis.
Norb Leahy, Dunwoody
GA Tea Party Leader
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