A Fulton County agency agreed to grant $5.7 million in tax savings to developers looking to build hundreds of apartments, both luxury and at reduced rents, and a grocery store near the Beltline’s Eastside Trail.
The Development Authority of Fulton County (DAFC) voted Tuesday to greenlight the 10-year tax break for the $122 million mixed-use project by Atlanta-based Fuqua Development and Charlotte-based Northwood Ravin. The companies are under contract to buy the 3-acre site along Boulevard and Highland Avenue. Jeff Fuqua, the founder of his namesake development company, told The Atlanta Journal-Constitution ahead of the vote that the project would not move forward without the incentive.
“This small abatement makes a huge difference,” he said. “We can’t get it built otherwise.”
The developers propose to build a 284 residences, a grocery store and about 12,400 square feet of retail and restaurant space, replacing a shuttered furniture store and empty lots near the Freedom Barkway Dog Park. The developers will also build roughly 400 new parking spaces for residents, shoppers and dog park visitors.
Credit: Google Maps
Credit: Google Maps
Because of its proximity to the Beltline, the developers must reserve 15% of the apartments — or 43 units — for tenants making 80% or less of the area median income. In return for the tax abatement, the developers will preserve the affordable units’ pricing for 30 years, which is 10 years beyond what city code requires.
Ben Yorker, a development partner with Northwood Ravin, told the DAFC board that a fully market-rate project would have a return on investment of 6%, which drops to 5.4% with the included affordable units. He said the tax abatement will help plug the gap.
“It’s sort of like a runway to get a project on its feet,” he said. “When that’s over the project can stand along financially.”
Development authorities play outsize roles in recruiting jobs and investment in Georgia and DAFC is among the more prolific providers of taxpayer-funded incentives. But the authority has received criticism for approving tax breaks for projects in fast-growing areas, including the Beltline or Midtown with few public benefits. Critics contend the authority often grants incentives for projects that would have been built without tax breaks.
The authority, as part of the “bond-for-title” transaction, would earn a fee in exchange for enacting the tax break.
Matt Garbett, a co-founder of Thread ATL and founder of Freedom Barkway Dog Park near the proposed mixed-use project, slammed on Twitter that additional parking for the dog park was listed among the project’s public benefits.
“I cannot describe how much it infuriates me to see developers using (Freedom Barkway) as a justification for building parking with public funds,” he said.
The development team will spend $900,000 for new sidewalks and on-street parking, Yorker said.
DAFC Chairman Marty Turpeau said the site, located across the street from the shuttered former Atlanta Medical Center, could use “a shot in the arm right now.”
The project site is currently owned by multifamily developer Aderhold Properties, and Fuqua said they will close the land sale soon after Tuesday’s meeting.
DAFC Executive Director Sarah-Elizabeth Langford described the area around the project site as a “food desert,” even though there’s a Whole Foods Market, Trader Joe’s, Kroger and Publix within about two miles of the site. Fuqua said a new grocer will benefit the area.
The project is within Atlanta’s city limits, which is typically a point of contention for DAFC tax abatements, since the city’s economic development arm Invest Atlanta is also able to incentivize projects. However, DAFC Treasurer Mike Bodker said Atlanta Mayor Andre Dickens gave the abatement his endorsement.
“One would think this area of the Beltline would need no inducement,” Bodker said. “I think (the developers) have demonstrated today that regardless of where you’re located, if you want affordable housing to pencil out, these kind of inducements are necessary.”
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