What the Gulch incentives deal got for Atlanta
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Rendering courtesy of CIM Group
When Mayor Keisha Lance Bottoms struck a nearly $2 billion incentives package with a Los Angeles-based developer to develop a mixed-use mini-city in Downtown’s “Gulch” called Centennial Yards, the company promised tens of millions of dollars in return to combat inequity.
- Yesterday, that developer literally handed Bottoms a $33.5 million check — and the Mayor knows how she wants to spend it.
Why it matters: CIM Group and its partner group led by Atlanta Hawks owner Tony Ressler will create 50 acres and up to 12 million square feet of living and office space on what today is a giant hole in downtown.
- If the city is investing so much in the area, it needs something in return.
By the numbers: Here’s how the city plans to invest the cash (in addition to $12 million to build an economic development fund).
- $28 million will go into the city’s affordable housing trust fund to develop subsidized units, help residents offset rising property taxes, and other anti-displacement strategies.
- $2 million to help create a new training center at Atlanta Technical College.
- Plus an unspecified amount to test a guaranteed-income pilot project for needy families and to kickstart a savings-account program for Atlanta children.
Context: Once complete, the $5billion Centennial Yards will stretch from South Downtown to Castleberry Hill, filling a hole in the heart of Downtown that is currently a sea of parking lots and railroad tracks in the shadows of State Farm Arena and Mercedes-Benz Stadium.
- Richard Ressler, the founder and principal of CIM, says 20% of the projected 1,000 residential units in Centennial Yards will be affordable for a person making less than $48,320, for 99 years.
- The developer has also set a 38% participation goal to include minority- and woman-owned businesses in the project.
Flashback: In 2018, shortly after taking office, Bottoms and supporters of redeveloping the Gulch ironed out a deal put into motion by her predecessor, Kasim Reed, and then Gov. Nathan Deal that could pay out up to $1.9 billion to CIM.
- Under the deal, the developer will receive city and state sales taxes collected in the footprint of Centennial Yards for 30 years. The developer also got a 20-year property tax break on the project.
- Redlight the Gulch, a fiscal watchdog group, fought the tax breaks all the way to the state Supreme Court, but lost on appeal.
Yes, but: Critics of the deal then, and now, note that the incentives greatly outnumber the investment.
However the city tries to argue that the social benefits work in Atlanta’s favor, the city (and state) are still forgoing cash that could pay for infrastructure, affordable housing, public safety or any number of programs.
- “Focusing only on the positive side of the ledger is not an appropriate way to evaluate public policy,” says J.C. Bradbury, an economic professor at Kennesaw State University and critic of public incentives. “The grand celebration of one side of the equation seems a little silly.”