UPDATE: Atlanta Mayor Keisha Lance Bottoms will present new amendments to a proposed public financing package that will shorten the length of one of the incentive programs to help fund the $5 billion redevelopment of downtown's Gulch, the mayor's office said Monday in a news release.
Bottoms said the new proposal will eliminate a plan to extend the life of the Westside Tax Allocation District (TAD) by 10 years, confirming a report early Monday by The Atlanta Journal-Constitution.
VIDEO: Previous coverage on this issue
A TAD is a zone where governments freeze property tax collections at current levels for a period of time and use future expected increases in property values over many years to fund infrastructure and other improvements in that zone.
Under the original Gulch proposal introduced in August, the current TAD would be extended 10 years from 2038 until 2048. But that extension is now off the table.
The release did not state what the change might mean in terms of potential taxpayer savings. It’s unclear if any other terms in the proposal have changed, and if the city has made any concessions to developer CIM Group.
Bottoms had been pressing for a Monday vote by the City Council, but it became clear the mayor didn’t have enough votes to approval the original proposal. It’s unclear if the council will vote on Monday.
The AJC is seeking answers from Bottoms’ office.
Removing the TAD extension could eliminate a major hurdle to a deal. As currently structured, the Gulch deals requires approval by Atlanta Public Schools and Fulton County.
APS Superintendent Meria Carstarphen has come out in recent days against an extension of the Westside TAD, for fear of its impact on system finances. Carstarphen said last week she’d want to renegotiate or eliminate APS’s participation in five existing TADs before approving the Gulch deal.
In the release, Bottoms had sharp words for the school system.
“After several months of negotiations, recent public statements by Atlanta Public Schools have reflected their unwillingness to reasonably partner with the city of Atlanta on the Gulch,” Bottoms said in the release. “Thus, the administration has worked with CIM to remove the extension of the Westside TAD as a part of our agreement.”
The AJC left a message for an APS spokesman early Monday and is awaiting a response.
Bottoms also said a review of the new proposed terms by an independent firm, Springsted, confirmed her office “has negotiated a sound agreement.”
Original post from 6 a.m. Monday is below:
Mayor Keisha Lance Bottoms and developer CIM Group were said late Sunday to be near new terms for a public financing package to support a massive $5 billion mixed-use development in downtown Atlanta’s Gulch.
CIM has proposed a mini-city with office towers, hotels, apartments and retail spanning 40 downtown acres from the Five Points MARTA station to Mercedes-Benz Stadium. The California based company has sought a public financing package of up to $1.75 billion to help build infrastructure and fund a portion of development.
Bottoms had pushed for a Monday Atlanta City Council vote on the proposal, but the measure appeared to have hit a wall. The mayor already pulled a September vote on the proposal for lack of council support.
Bottoms' office and CIM sought ways over the weekend to alter the deal to make it acceptable to an eight-vote majority of the City Council.
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The deal, as announced in August, relies on two sources of public funds. One source would be five cents of the 8.9-cent local sales tax collected within the confines of the development.
Four of those five pennies come from state dollars.
The other funding stream would come from the existing Westside Tax Allocation District (TAD), which was created in the 1990s. A TAD is a zone where governments freeze property tax collections at current levels for a period of time and use future expected increases in property values over many years to fund infrastructure and other improvements in that zone.
Under the original proposal, the current TAD would be extended 10 years from 2038 until 2048.
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Two people familiar with the situation said under the new terms, the project would continue to rely on two streams of taxpayer money — the five pennies of sales taxes and future property taxes created by the development via the TAD.
But the TAD would not be extended beyond 2038, two of the people said.
It’s unclear if other terms in the complicated transaction have changed, and if the city has made any concessions to CIM.
It’s unclear whether a vote on the new terms will happen on Monday. One person said a Monday vote on the matter appears unlikely, as terms the person did not identify remain unsettled.
A spokesman for Bottoms did not respond Saturday or Sunday to requests for comment. A CIM representative declined comment.
Removing the TAD extension could eliminate a major hurdle to a deal. As currently structured, the Gulch deal requires approval by Atlanta Public Schools and Fulton County. If the existing TAD does not change its sunset of 2038, then those entities may have less or no say in the deal.
APS Superintendent Meria Carstarphen has come out in recent days against an extension of the Westside TAD, for fear of its impact on system finances. Carstarphen said in recent days she'd want to renegotiate or eliminate APS's participation in five existing TADs before approving the Gulch deal.
Also, the City Council has expressed reservations about forgoing three decades of sales and property tax revenues to be created on the site. Others worry about the potential strain the new development would put on city resources.
Critics say promises of affordable housing and other proposed public benefits don’t match the substantial taxpayer contribution. And they say retail sales and new development that might occur in other neighborhoods will instead happen in the Gulch because of the sales tax incentive and TAD, diverting revenue that the city needs.
Proponents say the Gulch deal is a once-in-a-lifetime opportunity to stitch together in-town neighborhoods and fill a void created by the what amounts to a railroad crossing in the city’s center that sucks life out of downtown.
City and state officials say the time to act is now. CIM wants to buy key Gulch land owned by Norfolk Southern. The Fortune 500 rail giant wants to cash out of its Gulch holdings and use the proceeds for a new headquarters facility, which could go to Midtown.
The project has drawn fierce opposition from a coalition of community groups from Bankhead to Buckhead fearful the deal gives up too much future tax revenue for too little in the way of community benefits.
Over the weekend, the opposition group Redlight the Gulch Coalition urged council member “not to be steamrolled into a hasty decision,” and to delay a vote on any alterations to the proposal to give the public and council time to vet it.
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