The CEO of Norfolk Southern reportedly said in an interview Wednesday his company won’t move its headquarters to Atlanta if the City Council spikes a development deal for downtown’s Gulch.
The ultimatum comes just days before the council is expected to vote Monday on a blockbuster $1.9 billion financing package for the planned $5 billion downtown project. California-based developer CIM Group plans a 40-acre mix of offices, apartments, hotels and retail above the empty swath of railroad lines and parking lots between the Five Points MARTA station and Mercedes-Benz Stadium.
Norfolk Southern owns key land CIM wants to buy to make its downtown mini-city a reality. The railroad wants to use proceeds from the sale to help finance its new home, likely in Midtown.
Jim Squires told the Atlanta Business Chronicle it must sell its holdings downtown to facilitate the Fortune 500 company's move from Norfolk, Va., to Atlanta. The company is said to have a site in mind in Midtown, and the property is under contract with developer Cousins Properties.
“I would hate to see this slip away,” Squires said. “But if it does, we will move on.”
Squires told the newspaper his company needs to sell its land, reach an incentive package with the state and City Hall and lock down a deal for its future headquarters.
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The Gulch proposal has stalled as City Council balked at an early version of the deal, leaving Norfolk Southern in limbo. But the council appears primed to vote on the matter Monday.
Mayor Keisha Lance Bottoms was forced to rework the financing package with CIM for lack of council support. It’s unclear if the new deal has the backing of the eight council members needed to assure passage.
Bottoms three times has called for a vote on the deal, and three times reversed course.
A message left with a Bottoms spokesman was not immediately returned Wednesday.
Squires’ comments ratchet up the pressure being placed on council to support the deal.
The development team and allies have purchased radio ads and launched a social media blitz under the banner "Greenlight the Gulch," with a corresponding website, to sell residents on a project.
But the deal has unleashed a vocal opposition at council meetings and community forums. One group, allied under the banner of Redlight the Gulch, has said the public financing is a bad deal for the city and taxpayers.
The new proposal calls for up to $1.25 billion in bonds, not including interest, to be repaid by a portion of future sales taxes created within the development through 2048. Up to $625 million, not including interest, would come from two decades of future property taxes created by the development itself.
Gulch supporters have hailed the deal as one that will use future tax revenues created on site to transform a void in the city’s center into a vibrant mini-city. They say the developer also has made unprecedented commitments to affordable housing and other community perks.
Critics say the proposal risks siphoning tax dollars from other areas of the city and rewards a development team for benefits they say aren’t commensurate with the costs.
In early October, Norfolk Mayor Kenny Alexander told The Atlanta Journal-Constitution his city would not engage in a bidding war to keep Norfolk Southern.
“I don’t want [Atlanta] council members to think they have to rush to a vote based on what allegedly the home city is doing,” Alexander said. “The home city isn’t aggressively doing anything of the sort.”
The story so far
Developer CIM Group and the city of Atlanta are negotiating a public financing deal of up to $1.9 billion for a massive project to transform downtown's Gulch. A key piece of land CIM wants is owned by railroad giant Norfolk Southern. Norfolk Southern wants to move its headquarters from Virginia to Atlanta, but on Wednesday told Atlanta Business Chronicle it won't move to Atlanta unless the City Council approves the Gulch deal with CIM.The council is heading for a deciding vote on the deal on Monday.
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