Voters
who live in the City of Atlanta need vote the Gulch project. They may prefer a
different plan that doesn’t cost so much. If Norfolk Southern can sell off
their land to local companies themselves, they can save Atlanta voters a
fortune.
City
Councils should stop being passive by relying on expensive developer initiated
plans to improve blighted areas. They need to debate common sense solutions
that don’t result in unnecessary debt. Spending plans should be way below
expected revenue. The City of Atlanta should operate by priorities and fix
their leaky sewers, water distribution, roads and highways.
See
new proposal below: Atlanta
City Hall releases new deal terms for $5B Gulch project, by J. Scott Trubey,
10/23/18, AJC.
Atlanta
Mayor Keisha Lance Bottoms’ office on Tuesday
released new terms for a proposed public financing package for the
$5 billion development of downtown’s Gulch that removes a controversial
extension of a special taxing district.
The
long-term costs, including interest that taxpayers would cover under the
original deal are likely to come down considerably. But the overall public
financing for the deal will still total more than $1 billion.
In
August, Bottoms unveiled a proposal for up to $1.75 billion in bonds, not
including borrowing costs, backed by future sales and property taxes created
within the 40-acre downtown property. The proposal now includes a package
valued at up to $1.9 billion, but the deal will not rely as heavily on bonds
and therefore the total long-term costs to taxpayers will likely be less than
the original proposal.
Bottoms
and CIM were forced to alter the
deal for lack of council support.
The
changes remove some technical complexity in addition to reducing the interest
on bonds that would be recouped by future tax revenues. Supporters say the new
terms will motivate CIM to build faster in order to recoup costs.
Bottoms’
office released details and about 700 pages of new agreements with the
developer for City Council consideration.
Developer
CIM Group wants to build a mix of office towers, apartments, hotels and retail over the parking
lots and railroad tracks between Mercedes-Benz Stadium and the Five Points MARTA
station. The site is complicated and requires a massive $500 million steel and
concrete platform spanning the tracks to create a new street grid.
The
project remains eligible to collect a portion of future sales taxes created
within the Gulch through 2048 and allows CIM to receive reimbursements from the
city out of the area known as the Westside Tax Allocation District.
Those
funds would come from new property taxes created on the site through 2038. The
earlier terms extended the taxing district’s life by 10 additional years.
The
new deal still calls for up to $1.25 billion in bonds through 2048 to be repaid
by five pennies of the local 8.9-cent sales tax revenue created within the
Gulch.
The
other revenue stream still involves future property taxes created by the
project, but now through 2038. However, instead of issuing bonds that would
accrue interest, CIM will be eligible for reimbursement of costs of
development.
Under
those terms, CIM could apply for reimbursement of up to 12.5 percent of qualifying
development costs out of the TAD for two decades.
CIM
also would be allowed to obtain about $32 million in bonds up front that also
would be paid from future property taxes.
Under
the new structure, CIM could recoup up to $625 million in development spending
from property taxes through 2038, bringing the financing package to about $1.9
billion.
But
with the elimination of the TAD extension and reduction in future bond debt, this
structure is likely to reduce overall costs through the life of the TAD.
Supporters
of the Gulch say the development will effectively pay for itself because of the
new revenue created, but critics say the project will siphon tax revenue by
directing development to the Gulch that would have happened in other parts of
the city that contribute to the public coffers.
“Our
team has worked nonstop over the last several months to structure a deal that
would not just bring much needed development to the west side of downtown, but
most importantly, would benefit communities throughout Atlanta,” Bottoms said
in a news release. “With the inclusion of millions of dollars towards affordable
and workforce housing, economic development, and job training, this historic
agreement is vastly different than any other negotiated by our City.”
A
public benefits agreement with CIM remains largely unchanged and includes a $28
million donation into a citywide affordable housing fund, and creation of the
greater of 200 residential units or 20 percent of the project as workforce
housing. CIM also has committed to spend $12 million in a city economic
development fund, $2 million for workforce training and a $12 million donation
for a new fire station.
At
a press conference outside City Hall Tuesday morning, members of the Red-light
the Gulch Coalition, which opposes the project, said the public benefits of the
deal are still dwarfed by the subsidy.
J.C.
Bradbury, a Kennesaw State University economist who contributed to an outside
analysis of the deal, said Gulch supporters do not consider opportunity costs
for using taxpayer dollars in the Gulch rather than in other parts of the city.
He
said buildings constructed in the Gulch likely would have been built elsewhere
in fully taxable areas, depriving the city, Fulton County and Atlanta Public
Schools of future revenue.
“This
is just the shuffling of dollars,” he said.
A.J.
Robinson, the president and CEO of Central Atlanta Progress, which supports the
proposal, said the new terms enforce stronger terms on CIM to deliver,
otherwise they won’t be able to recoup costs. They also have to work
faster.
“It
took a really good for the city and made it better. Most importantly it forces
the development team into a 20-year time frame to build a whole bunch of
density. From the city’s standpoint, that’s what they should be trying to
encourage.”
Norb Leahy, Dunwoody
GA Tea Party Leader
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