Developer CIM Group and the city of Atlanta are locked in 11th-hour negotiations on a public financing package to support the $5 billion project aimed at transforming downtown’s Gulch.
Mayor Keisha Lance Bottoms has pushed for a Monday City Council vote on the current proposal, which calls for up to $1.75 billion in public financing. But that plan might have hit a wall. It appears the measure does not have the eight council votes needed to pass, and a Monday vote is doubtful, people familiar with the matter told The Atlanta Journal-Constitution.
Bottoms has staked significant political capital on the Gulch project, which she says will transform a neglected area in the heart of downtown. But she was forced to shelve an earlier vote.
CIM and the city met for hours Thursday and Friday to hash out new terms. They discussed ways to reduce the overall taxpayer contribution and increase the public benefits, said three people who asked not to be identified because they aren’t authorized to comment.
The gulf between the developer and a majority of council isn’t wide, and it’s possible a new agreement could come before council on Monday, one person said.
But that would allow little time for public vetting.
Bottoms’ office did not respond to repeated requests for comment, and CIM declined comment. Several council members said they haven’t been briefed on the talks.
“I’m certainly under the impression that talks have heated up in regards to potential compromises, which would be normal in the approach to the 11th hour,” said Councilman Howard Shook, who represents Buckhead and has signaled opposition to the current proposal. “Where things stand, I don’t know. There’s a long time between now and Monday afternoon.”
CIM has proposed a mix of office towers, apartments, hotels and retail stretching across 40 acres of weedy parking lots and rail beds between the Five Points MARTA station and Mercedes-Benz Stadium.
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The deal, as currently structured, 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 Westside Tax Allocation District (TAD). 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 proposal, the current TAD would be extended until 2048.
Atlanta Public Schools and the Fulton County Commission also must approve aspects of the deal as drafted. APS Superintendent Meria Carstarphen has driven a hard bargain, saying the schools' participation in five current TADs would need to be renegotiated or eliminated if the school district is to support the Gulch.
CIM has agreed to a public benefits package that includes a $28 million investment in a citywide affordable housing trust fund, as well as setting aside the greater of 200 residential units or 20 percent of the total built and putting $12 million in an economic development fund.
The City Council 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.
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A proposal to move forward without the TAD extension is said to have been discussed, but CIM officials have previously called that a nonstarter.
Councilman Andre Dickens, who holds a citywide seat, said in a statement he wants Gulch development, but doesn’t support the current deal and that negotiations should start over with more community input.
“One fact remains clear after all these discussions: There isn’t broad support for the proposed deal,” he said.
Marshaling forces
Bottoms has rallied business and civic leaders to pressure council. The Metro Atlanta Chamber, downtown business alliance Central Atlanta Progress, Gov. Nathan Deal and former U.N. Ambassador Andrew Young have each expressed support.
In a letter this week to council, Young compared the Gulch proposal’s city-shaping potential to Atlanta’s quest for the 1996 Summer Olympic Games.
“There were those, including some cynical voices in town, who doubted our bid to host the Olympic Games,” he wrote. “But then, just as now, I trusted in the greatness of this city and in her people. Atlanta is a world-class city, but that privilege requires constant re-investment and re-invention.”
Proponents say the Gulch is a once-in-a-lifetime opportunity to stitch together downtown neighborhoods and fill a void that sucks life out of downtown.
They say tax dollars that will be created by the project will help the development pay for itself and spread the wealth to other communities through commitments to affordable housing, the economic development fund and other perks.
Gulch allies have blanketed Atlanta with radio ads and robocalls touting the project as a risk-free deal for taxpayers. The developer and not the city is on the hook for bond debt if future tax revenues fall short, they say.
A website and social media blitz implores City Council to “Greenlight the Gulch.”
A.J. Robinson, the CEO of Central Atlanta Progress, said he remains hopeful for a Monday vote.
“I think that it’s clear, since we’ve been at this as a community now for a month, a lot of folks are interested in the project going forward,” Robinson said. “There’s lots of conversation in these weeks about benefits of the project and how we get council folks on board.”
A coalition of critics from Bankhead to Buckhead, meanwhile, have rallied around the motto “Redlight the Gulch,” condemning the project as a taxpayer giveaway.
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Opponents have flooded council committee meetings, canvassed neighborhoods with leaflets and visited barbershops, salons and churches. The group planned meetings in southwest Atlanta this weekend.
Julian Bene, a former board member of Invest Atlanta, the city’s economic development agency, urged council members to kill the Gulch proposal.
“There’s no Tooth Fairy here. This is money that normally would go to the coffers to pay for streets and schools,” he said.
Tanya Washington, a Georgia State University law professor and Peoplestown resident, said in a recent council committee meeting that residents of the southside have been told for years that incentives to big developers would trickle down to them.
“It somehow never seems to trickle all the way down,” she said.
GULCH REDEVELOPMENT
Scope: Developer CIM Group has outlined a project of $3.5 billion to $5 billion. It 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: CIM and the Atlanta Hawks. California-based CIM was co-founded by Richard Ressler. His brother Tony is the lead owner of the Hawks.
Incentives: Pending revisions, the proposed public financing is $900 million to $1.75 billion, though those figures could grow based on financing charges. 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: CIM has agreed to a package of affordable housing commitments, jobs training and other community benefits.
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. A vote on an up to $1.75 billion public financing package could come Monday.
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