The city of Atlanta can issue bonds backed by future sales tax dollars to help support an up to $5 billion redevelopment of downtown Atlanta’s Gulch, a Fulton County Superior Court judge has ruled.
The recently issued order by Chief Judge Robert McBurney to validate what are known as “Enterprise Zone” bonds is a crucial step for developer CIM Group to begin development of a mini-city in a 40-acre dead zone of parking lots and weedy rail beds between Mercedes-Benz Stadium and the Five Points MARTA station.
McBurney ruled the city can issue bonds, to be repaid by future sales tax revenue generated on the Gulch site, to help fund vital infrastructure and development of the project. The city and CIM await a ruling on another portion of the incentive package concerning future property tax revenue.
Opponents, who challenged the legality of the bonds, vowed to appeal McBurney’s decision.
“We feel like we have some extremely strong objections … and will push them as hard as we can,” Julian Bene, a leader of the Redlight the Gulch Coalition, told The Atlanta Journal-Constitution.
In a statement, the Redlight group said the city and CIM haven’t shown that revenue projections were feasible to support up to $1.25 billion in bonds backed by future sales taxes.
CIM didn’t comment on the ruling.
Negotiations to redevelop the Gulch started a few years ago under former Mayor Kasim Reed but remained largely out of the spotlight. Although Mayor Keisha Lance Bottoms did not campaign on bringing development to the Gulch, the planned mix of apartments, office towers, hotels and retail downtown emerged last year as one of her signature issues.
In November, after weeks of wrenching debate, Atlanta City Council narrowly approved a plan to provide up to $1.9 billion in public money to support the project.
The first-of-its-kind public financing package allows the developer to recoup 20 years of future property taxes created within the development site and 30 years of future sales taxes on the property to help fund infrastructure and vertical construction.
In return, CIM committed to developing at least 200 workforce housing units, a donation of $28 million toward a citywide affordable housing trust fund, $12 million to a citywide economic development fund, and an additional $12 million to fund a new fire station. CIM also will donate $2 million to a worker training program and agreed to 38 percent minority and women-owned business participation in the construction of the complex.
But the public subsidy remains controversial, with critics decrying the deal as a giveaway to the developer without enough public benefits.
The financing package also triggered a battle between the city and Atlanta Public Schools, which voted to restrict the city’s use of school tax dollars before the two sides came to an agreement in January. That January pact, however, has been anything but smooth and APS has said the city hasn't fulfilled all its commitments.
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