Fulton agency OKs $10M tax break for downtown project. But will it happen?
An upstart developer won preliminary backing Tuesday for an ambitious high-rise project near downtown Atlanta despite questions raised by the group’s track record and financial wherewithal.
Forge Atlanta Asset Management has proposed transforming 10 acres between downtown Atlanta and Castleberry Hill into a $756 million district filled with hundreds of luxury condominiums, a hotel, offices, shops and green space. Details are scant even though ambition is sky high.
The site along Ted Turner Drive and Whitehall Street has twice seen proposals made only to fall through, with the most recent ending in a foreclosure.
But questions have emerged about the new proposal and its backers.
Forge Atlanta Asset Management is an entity founded last year and is majority-owned by Webstar Technology Group, a publicly traded company. Its stock was priced Wednesday morning at only about 4 cents per share.
Webstar also warned investors there was “substantial doubt” about the company’s ability to remain in business for more than a year, according to an Aug. 15 filing with the U.S. Securities and Exchange Commission. The company as of June 30 reported no revenue, it had about $153,000 in assets and less than $6,000 in cash on hand at that time.
Representatives of Webstar did not immediately respond to requests for comment from The Atlanta Journal-Constitution.
Ceasar Mitchell Jr., a former Atlanta City Council president and an attorney representing the development team, told the Development Authority of Fulton County board on Tuesday that property tax relief is needed for the project to come to life as envisioned.
“This project is not the first, not even the second, iteration of ambition for this particular site,” Mitchell said.
The board voted to approve the first of two required votes to green-light a nearly $10 million tax break with two board members dissenting. Board member Lynne Riley and Vice Chair Kyle Lamont voted against approval after asking questions about public education impacts and the expected selling price of the project’s 600 condos — which would range from $750,000 to $2.5 million.
DAFC Chairman Kwanza Hall, who supported the tax break, acknowledged the past struggles that have derailed previous development plans at the site. But he said the project has potential to be transformative, arguing the ambition is worth his support.
“We just want to see people who are willing to take a risk, to try to do everything they can and to do their best job to present projects that meet our mandate,” he said.
In a statement, Hall referred questions about the development team’s finances to the company. “The Forge Atlanta project was approved by the Board for a potential property tax incentive that would be entirely contingent upon the developer building and advancing the project,” the statement said.
Garnering scrutiny
Webstar Technology Group‘s website says it focuses on real estate, hospitality and mining development. Forge Atlanta is the company’s sole project.
Webstar previously proposed a $650 million amusement park called Bear Village Resort in Commerce. That project fell apart shortly after being publicly pitched, according to real estate news outlet Bisnow.
The Forge Atlanta site is a former food distribution center that has conjured up large development dreams since 2020.
In 2021, a different upstart developer, Urbantec Development Partners, signed agreements to acquire the land for a high-rise life sciences campus called Forge Atlanta. The plan included offices, apartments, retail, a hotel and an entertainment venue, but the land was never developed and went through foreclosure in March 2023.
Webstar in May announced its intentions to buy the site and restart Urbantec’s effort. In a news release announcing the deal, Webstar touted its experience on the Commerce project, which later fizzled.
Webstar owns 80% of the development venture, while Urbantec owns the remaining 20%, according to a Securities and Exchange Commission filing.
Bisnow in September reported on Webstar’s questionable track record delivering its promised developments. In reporting that raised concerns with securities law experts, Bisnow detailed government filings riddled with spelling errors, executives with unverifiable resumes and connections to a developer fined by the SEC for allegedly defrauding its investors.
Those concerns were not discussed during the DAFC meeting, and Webstar did not immediately answer questions asked by the AJC regarding the report.
On Tuesday, Mitchell and investment banker Eric McLendon, a Webstar executive, made an effort to list the partners recruited to the development team, including established architects and general contractors.
Mitchell said the team is supported by “a cadre of individuals … willing and able and capable to make this happen,” Mitchell said.
Kyle Kessler, a longtime downtown resident, told the DAFC board there are many unanswered questions about the project team’s wherewithal.
“When taxpayers are being asked to subsidize millions of dollars in private development, we should know the financing is sound and the developers have the capacity to deliver on those projects,” Kessler said.
Phase 1
The tax break considered by DAFC, which also goes by Develop Fulton, is relegated to Forge Atlanta’s first phase.
The phase includes a 300-room hotel, meeting space, condos and 60,500 square feet of retail and entertainment space, according to a DAFC fact sheet. The tax break, which would provide $9.7 million in savings over a decade, applies to all development aspects except the condos.
“This will essentially be the first full-blown iteration of the project, with subsequent phases really doing more of the same as the first phase proves out,” Mitchell said.
After accounting for the tax break, Phase 1 is estimated to generate about $25 million in additional taxes during the abatement period, according to DAFC. That figure does not account for the condos, so the tax figure’s projection is likely greater. It’s also projected to create 900 full-time jobs when complete, according to the development authority.
Webstar and Urbantec are under contract to buy the project site for $33 million in a sale scheduled to close in November, according to SEC filings. Mitchell said the tax break is needed to help close projected funding gaps over the next decade.
He also said that without the abatement, the entire project would likely not be feasible.
“It would be something completely different,” Mitchell said. “Maybe we could build a retail strip or something of that nature. The market might accept that, but not what we’re presenting to help transform downtown Atlanta.”
About the Author
Zachary Hansen, a Georgia native, covers economic development and commercial real estate for the AJC. He's been with the newspaper since 2018 and enjoys diving into complex stories that affect people's lives.
