Pro & Con: Should DeKalb OK bonds for GM site's redevelopment?

YES: The project will stimulate growth when the region desperately needs it.

By Tad Leithead

Amid the barrage of negative financial reports and disheartening news stories precipitated by the current economy, it can sometimes be a challenge to remain optimistic about our future. This challenge is particularly acute for those of us here in the metro region, where we face serious obstacles as a result of unprecedented failures in the banking, construction and financial sectors. Indeed, even the most entrepreneurial and well-capitalized companies have been hard pressed to find present, viable opportunities for investment in our region.

One such opportunity, however, is presently upon us: the proposed redevelopment of the former General Motors Doraville Assembly Plant site. This opportunity, however, comes with a short fuse.

In addition to the developer’s $50 million private equity commitment for site acquisition, demolition, remediation, entitlement, design, public-interest alignment and infrastructure development, DeKalb County, together with participation from the city of Doraville, is contemplating the issuance of $35 million in Recovery Zone Bonds (RZBs) to help facilitate site acquisition. The bonds have already been made available for use in DeKalb through the American Reinvestment and Recovery Act, and are expressly intended for projects that will create jobs, build infrastructure, clean up environmental hazards and create sustainable communities close to transportation options. These significant economic development tools are here and immediately available; the Doraville site is an ideal location to put them to use.

DeKalb officials must authorize their use quickly, though, because a state-imposed deadline will cause them to expire on Sept. 30. To meet Georgia’s requisite constitutional bond validation period, DeKalb officials must act now to ensure that the bonds are issued.

Today, the 165-acre site is an idle, environmentally challenged, economic dead zone and eyesore in the heart of the northeast corridor. With this proposal, it is poised to become a world-class model for transit-oriented development, and, equally important, a new economic engine for Doraville, DeKalb and the region.

The site’s redevelopment is well-timed to capitalize on our region’s existing investment in MARTA with a proposed new destination center and multi-modal transportation hub. It will also stimulate infrastructure reinvestment within the urban corridor. And the timing could not be better: In the three years it will take for remediation and infrastructure work to be completed on the site, our region will be well into recovery, even by the most conservative of forecasts.

The development plans, and their corresponding positive impacts on the tax base, jobs, property values, the environment and overall regional prosperity, have a potentially catalytic impact with significant benefits not only at the site, but to metro Atlanta as a whole. The projected infusion to the area’s educational system alone is estimated at $365 million.

Although the final plans will, of course, be subject to review by regional and state agencies and a multitude of additional federal, state and local requirements, the types of mixed-use, transit-oriented developments proposed for the site, together with the contemplated mixtures of density and green space, are wholly in line with the Atlanta Regional Commission’s efforts to support sustainable development within our great region. By transforming a heavy industrial site into a new clean — and green — mixed-use, transit-oriented district, our region can demonstrate its commitment to intelligent development pattern investment in the 21st century as an antidote to 20th-century sprawl. It will also showcase our region’s “can do” spirit in the face of difficult economic circumstances.

Tad Leithead is chairman of the Atlanta Regional Commission.

NO: DeKalb taxpayers are not the ATM for private developers.

By Mike Jacobs

Drive north on Peachtree Road and Peachtree Industrial Boulevard through Brookhaven, Chamblee, Doraville and into Dunwoody and the view is startling. Shopping centers are abandoned like the ghost towns of the Wild West.

Town Brookhaven may be sprouting anchor stores, but it is having trouble filling its smaller retail store fronts. Chamblee Plaza is nearly vacant. The brand new Super H Mart shopping center adjacent to the former General Motors site in Doraville is nearly empty, too.

The CoStar Group, a national real estate analysis firm, says the vacancy rates of retail, shopping centers and offices of North DeKalb County are at catastrophic levels when you compare them to other areas. Consider these statistics:

● In the northern DeKalb ZIP codes 30319, 30338, 30340, 30341, 30346 and 30360, the vacancy rate of shopping centers is 23 percent compared to 14 percent in DeKalb County as a whole and 10 percent in the city of Atlanta.

● The vacancy rate for North DeKalb office buildings is 24 percent compared to 18 percent in the county overall and 20 percent in the city of Atlanta.

● Retail vacancy rates are 17 percent in those ZIP codes, 11 percent in DeKalb overall and 9 percent in Atlanta, according to CoStar.

Yet the county’s elected officials are considering using a special allocation of $36 million in federal stimulus bonds on the 165-acre GM site with visions of creating another Atlantic Station. They propose to use the stimulus bonds — originally intended for public infrastructure projects — as a $36 million “gift” to an out-of-state developer, New Broad Street of Florida.

County taxpayers would have to pay the principal and a majority of the interest on these bonds. It is very likely that this means higher property taxes for DeKalb homeowners because the county does not otherwise have the money to make the payments.

In ordinary times, the developer would not have to rely on county taxpayers. There would be more private investment to help finance the project. But these are no ordinary times.

We are in the midst of the worst commercial real estate market in a generation. Private investors do not want to provide the financing for an overly ambitious mixed-use project consisting of shopping, apartments and offices. Instead, the county wants the taxpayers to step in and do what private investors will not do: bear the risks of this project that would flood the market.

DeKalb taxpayers, however, are not a bank. They are not in the business of providing corporate welfare to jump-start a project that the private sector would never finance.

This is the most ambitious project we have seen DeKalb County officials attempt to tackle, and it comes during a deep recession. It simply is not the taxpayers’ job to finance the next Atlantic Station and add to the glut on the market of retail and commercial space.

The definition of insanity, according to Albert Einstein, is doing the same thing over and over and expecting different results. One would hope that we have learned the lessons of the recent real estate bubble and would steer clear of risking taxpayer funds for speculative development.

Eventually the economy will recover and someone will redevelop this highly desirable GM site — located along I-285, Peachtree Industrial Boulevard and a MARTA station — into something that private investors and market forces will support.

Until then, we must be cautious about what we do in the name of smart growth. No project is “smart” if it requires the developer to look to the taxpayers as an ATM.

State Rep. Mike Jacobs, a Republican, represents Brookhaven in the General Assembly.