GM site revamp would use tax money

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GM site revamp would use tax money

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Kent D. Johnson
2. With convenient access to MARTA and major highways, Doraville has more than 1,500 businesses averaging $5,361,780 each year. Plans are underway to transform the city's shuttered General Motors plant into a business and residential district.

How the site of the former GM plant in Doraville stacks up with iconic Atlanta locations

162

Number of acres for the Doraville site

185

Number of acres for Piedmont Park

74

Number of acres for Lenox Square Mall

138

Number of acres for Atlantic Station

21

Number of acres for Centennial Olympic Park

Doraville’s history

Doraville was founded in 1871, and it became known as a manufacturing town when General Motors opened its plant there in 1947.

Over the years, the factory produced Oldsmobiles, Buick Skylarks, Pontiacs, Chevy Monte Carlos and minivans until it closed in September 2008.

The plant’s closure eliminated 10 percent of Doraville’s tax revenue and more than one-third of its employment base.

Since then, several developers have considered buying the property, but those plans have fallen through.

General Motors pays about $1.2 million a year in taxes for the unused site, and redevelopment could result in much more business activity and taxes that could be reinvested in area parks, streets, sidewalks and public safety programs, said Shawn Gillen, Doraville’s city manager.

It could also make Doraville, a 3.6-square-mile city of about 8,500 residents, a more attractive place to live.

How we got the story

The Atlanta Journal-Constitution has been following the anticipated sale of the GM plant in Doraville since it closed in 2008.

Because GM may complete its sale of the 162-acre property as soon as next month, we tried to find out whether there would be any public financial support for the future mixed-use development.

Doraville officials said they’ve identified $75 million in infrastructure needs — streets, bridges and water lines — that could be funded by up to $40 million worth of bonds as well as federal grants.

Doraville’s history

Doraville was founded in 1871, and it became known as a manufacturing town when General Motors opened its plant there in 1947.

Over the years, the factory produced Oldsmobiles, Buick Skylarks, Pontiacs, Chevy Monte Carlos and minivans until it closed in September 2008.

The plant’s closure eliminated 10 percent of Doraville’s tax revenue and more than one-third of its employment base.

Since then, several developers have considered buying the property, but those plans have fallen through.

General Motors pays about $1.2 million a year in taxes for the unused site, and redevelopment could result in much more business activity and taxes that could be reinvested in area parks, streets, sidewalks and public safety programs, said Shawn Gillen, Doraville’s city manager.

It could also make Doraville, a 3.6-square-mile city of about 8,500 residents, a more attractive place to live.

How we got the story

The Atlanta Journal-Constitution has been following the anticipated sale of the GM plant in Doraville since it closed in 2008.

Because GM may complete its sale of the 162-acre property as soon as next month, we tried to find out whether there would be any public financial support for the future mixed-use development.

Doraville officials said they’ve identified $75 million in infrastructure needs — streets, bridges and water lines — that could be funded by up to $40 million worth of bonds as well as federal grants.

To transform an old General Motors factory into a buzzing commercial and residential community, the city of Doraville estimates it will need some $75 million in public money for streets, bridges, water lines and more.

That taxpayer investment would be in addition to GM’s $60 million asking price for the 162-acre property, which sits at the key intersection of I-85 and I-285, near a MARTA stop just inside the northern perimeter.

The project could remake Doraville, a struggling industrial town with a population of about 8,500 residents, into a thriving business center, said Shawn Gillen, Doraville’s city manager.

“It’s a potential renaissance of the community that’s been a victim of plant closures like many other communities around the country,” Gillen said. “It makes us a destination for people to come to live.”

Gillen hopes the project will be something akin to Atlantic Station in Midtown: a thriving mix of shops, restaurants, condominiums, parks and corporate towers that could eventually provide up to 23,000 jobs.

The development would replace a GM production plant that first opened in 1947 but has been vacant since 2008, when the last minivans rolled off the assembly line. A decade ago, it employed as many as 3,100 people.

Developers Integral Group and Macauley + Schmit have the site under contract. Integral Group CEO Egbert Perry didn’t return several calls seeking comment about plans for the site. Dave Schmit, principal at Macauley + Schmit, said he doesn’t want to share plan or financing details until the closing has taken place.

“We’re making progress,” he said. “It’s a private transaction, and we prefer to keep it that way.”

Government debates on funding the site’s infrastructure won’t begin until after the sale is finalized, said Luke Howe, Doraville’s director of economic development.

The sale could close in August or September, Howe said. But GM spokesman Dave Darovitz said the sale may not close for 12 to 15 months.

Up to $40 million in public funding would be available through what’s called a tax allocation district, or TAD, Howe said. That money could be used to leverage major federal grants for remaining infrastructure improvements.

“There’s no way you can get to the end product of what everyone says they want without (a TAD),” Howe said.

If the Doraville City Council decides to move forward with the TAD, the city would likely ask DeKalb County Schools and DeKalb County’s government to contribute to the project’s financing, he said.

Tax allocation districts have been used several times across Atlanta to help fund projects like Atlantic Station and the Atlanta Beltline. When a government like Doraville creates a TAD, it issues bonds to fund improvements with the expectation that developed properties will generate more tax revenue in future years.

“It’s the only tool that counties and municipalities have to attract redevelopment to sites,” said Steve Labovitz, an attorney for McKenna Long & Aldridge and a TAD expert. “There’s nothing else. There’s no money in the general fund to do these things.”

Susan Crawford, a Doraville resident for more than 25 years, said she was wary of tax incentives, but sees tremendous potential for the site.

“It’ll be a nice connection between the rest of the Atlanta area and Doraville, and it would draw people from other areas,” Crawford said. “It’s prime property. It’s huge. It’s in the hub of everything.”

While tax money hasn’t yet been set aside for the project, public contributions are vital for building a street grid and a pedestrian bridge to connect to the nearby MARTA station, Howe said.

Alisa Jackson, a MARTA spokesperson, said MARTA is working with the developers on construction of the pedestrian bridge, but the cost and financing hasn’t yet been determined. MARTA has “no plans to participate in the financing of this project,” she said.

The Doraville site could be similar Atlantic Station but bigger and more commuter-friendly, with the potential to house a corporate headquarters or a medical facility, Gillen said. The GM plant location covers 162 acres compared to Atlantic Station’s 138.

While proximity to MARTA is valued by companies that want easy access to public transportation, Doraville’s high poverty rate — 31 percent, compared to 17 percent in the rest of the state — creates a challenge to attracting popular restaurants and retailers. They often want to come to areas that have high average household incomes, said Mark Toro, managing partner at North American Properties, which owns Atlantic Station.

“Because of the demographic in the region, it’s not likely to support a large-scale, retail-dominant or entertainment-driven mixed-use,” he said. “It could be that this is not a mixed-use project as we’ve been contemplating them.”

A corporate campus would be “more likely” to succeed, Toro said. Whatever project is chosen, he said, the key to its success is ground-level construction that draws pedestrians to walk around the site.

While the GM site isn’t “even listed on our hazardous sites inventory for the state,” said Derrick Williams, a program manager in the response and remediation program of the Georgia EPD, there is some cleanup that needs to happen before it can be occupied.

Already, GM has cleaned up leaky underground storage tanks and a retention pond that had lead contamination. The company is monitoring the groundwater.

The environmental work could be similar to what had to be done at the Ford plant in Hapeville that now houses Porsche’s North American headquarters, said Shannon Ridley, an environmental engineer with the Georgia Environmental Protection Division. It took less than a year for developers to make the 122-acre Ford site hospitable.

Any environmental problems and costs are hard to determine because 3.6 million square feet of manufacturing space needs to be torn down. Other issues may come up as the ground under the buildings is tested.

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