DeKalb says no to GM redevelopment

By Megan Matteucci

The Atlanta Journal-Constitution

Balking at giving public money to a private developer, DeKalb County voted Tuesday against investing in the redevelopment of the vacant Doraville GM plant.

Instead, the county will likely use $36 million in federal stimulus bonds to upgrade its aging water and sewer system.

After months of closed-door meetings and negotiations, the DeKalb County Commission voted 5 to 2 to kill the $54 million project that called for a mixed use of retail and office space as well as residential units at the site near I-85 and I-285.

The plan called for giving $36 million in federal stimulus bonds to Florida developer New Broad Street. It also required another $18 million in interest, which would be paid for by a property tax increase.

“The commission realized this wasn’t the right time to give $36 million to a developer,” said Commissioner Elaine Boyer, who represents the district that includes the GM site. “Taxpayers were revolting. I got hundreds of e-mails. What you saw today was representative government at its best.”

The county commission main office’s voice mail had 230 messages from residents opposing the project and three supporting it, county staff said. That figure does not include commissioners’ individual voice mails nor e-mails, which included hundreds more of residents in opposition.

New Broad Street, which has an option to buy the 165-acre GM site, said it cannot move forward without the county’s funding.

“Clearly, we are disappointed,” said David Pace, the company’s president and CEO. “There was simply a lack of the political will. This version is definitely over now, but we have a continued interest in the property.”

CEO Burrell Ellis proposed the project several months ago, offering to jointly buy the brownfield with the developer and convert it into something similar to Atlantic Station.

Ellis promised the project would bring additional tax revenue over the next 30 years and 9,000 construction jobs. However, the plan did not include specifics such as who would fund the “vertical development” or actual construction and how it would draw tenants when about 20 percent of north DeKalb’s office and retail space is vacant.

“It would devastate an already bad situation at North DeKalb and Northlake malls. We would see jobs shifting instead of being created,” Commissioner Larry Johnson told The Atlanta Journal-Constitution. “At no time did the developer talk to these retailers.”

Johnson was one of five commissioners who thought that the plan was too risky, given the economy. Commissioners Connie Stokes and Kathie Gannon voted in support of the GM project.

“This is an opportunity that will not come back and knock on the door,” Gannon said. “This is something that will benefit all of DeKalb. It’s a long-term benefit.”

At $60 million, Commissioner Jeff Rader said he thought GM was also overcharging for the site. The proposal called for $35 million from DeKalb and $25 from the developer for the purchase of the property.

Druid Hills resident Henry Turner, one of dozens who implored Rader to vote against the project, said the prices aren’t accurate, given the economy.

“Proponents of the plan keep comparing it to the old Atlantic Steel site and Atlantic Station. The projects are not analogous,” said Turner, an attorney. “The Atlantic Station project was done at a very different time, particularly financing-wise, and under a quite different deal structure than the proposed GM plan.”

Several county commissioners said they were optimistic that a developer will move on the GM site without county money.

“This is one of the most attractive pieces of property in the southeast and, some have said, in the nation. If it is that attractive, there will be a developer that will develop it on its own,” Commissioner Lee May said.

May has advocated for the stimulus bonds to be used to build a convention center near the Mall at Stonecrest.

The county staff is now talking with lawyers to explore if the convention center is feasible, along with putting together a plan for using the money to improve the county’s water system.

DeKalb is already slated to borrow more than $1 billion to pay for upgrades to its 50-year-old water and sewer system. The county had planned to fund the upgrades by increasing water rates by an average of 110 percent over five years.

Gwinnett County is using federal stimulus bonds to upgrade its water system, said William “Ted” Rhinehart, DeKalb’s deputy chief operating officer for infrastructure.

The DeKalb commission will consider these two options in the next two weeks, but it is facing a time-crunch. The state has imposed a Sept. 30 deadline on how the stimulus money will be used.

For Ellis, the project was supposed to be the pinnacle of his term: bringing new jobs in a devastated economy.

“It’s a real opportunity lost,” he said. “It’s unfortunate that we aren’t able to say to our people that in 60-90 days, there will be jobs.”

The water and sewer project will bring construction jobs, but nothing long-term, Rhinehart said.

Several commissioners and residents felt the GM project, which would be built inside Doraville’s city limits, wouldn’t benefit all county residents.

“We’re still looking like we are fighting the civil war. The north won the civil war and the north looks like its winning everything [in DeKalb],” said Evans, president of the DeKalb civil rights group Operation Lead.

Even Doraville, which would see the most benefit, didn’t support the project.

Doraville Mayor Ray Jenkins said he was “very relieved” that the current project died.

It wasn’t New Broad Street or the firm’s vision for remaking the hulking plant into a new downtown for his city that earned Jenkins' disapproval. For him as well as other leaders in the town of 11,000 it was about the money.

“I never felt, from the start, that we could actually afford what we proposed to do,” Jenkins said.

With the county commission's killing the plan, Jenkins said there is more time to focus on better planning.

The city is just weeks into an eight-month process to better define how to redevelop the site, based on citizen and business input. Doraville will ultimately control zoning and other local rules that will dictate how any finished project will look.

Jenkins said he expects more developers, or perhaps even New Broad Street, will make new proposals for the site. But most of them now realize the governments aren’t going to foot the bill.

“Whoever comes in, we will work with them in whatever way we can,” Jenkins said. “I just don’t believe my citizens or the citizens of DeKalb County should have to pay extra taxes to develop it.”

Staff Reporter April Hunt contributed to this report.

Commissioner Elaine Boyer

“It was just too risky a venture for this county and our taxpayers to invest in a private developer’s project. If New Broad Street or any other developer wants to redevelop the site, we welcome them with open arms. And we believe that will happen. It’s just that DeKalb County can’t be a bank and finance their project.”

Commissioner Jeff Rader:

“I believe GM has priced the land too high in today’s market. Even with a substantial contribution of cash from DeKalb, we have not been able to get a developer to bring forward the needed money. ... As a consequence to that, I think it is impossible to approve this deal.”

Commissioner Connie Stokes:

“I admit the process has been a little challenging. The information has not been out there. ... But people need to go back to work, we need to turn the economy around. This is a regional project.”

Commissioner Larry Johnson:

“I didn’t want to use taxpayers’ money to fund development. We need to look at our own needs, like water and sewer and the convention center. Anything for our infrastructure is good.”

Commissioner Lee May:

“This would not spur economic development. We would be speeding up economic development. ... At the end of the day, for me, I think this piece of property will be developed on its own.”

Commissioner Sharon Barnes Sutton:

“I was very concerned about unincorporated DeKalb paying for a project in Doraville. The money should be used to improve the county in other ways, like economic development on Memorial Drive”

Commissioner Kathie Gannon:

“We will lose, as a county, the opportunity to contribute and have some ownership in that development. ... My list of pros came up a whole lot longer than my list of cons.”