The Atlanta Development Authority approved a property tax break Thursday for a 23-story apartment tower that condo developer Jim Borders plans for Midtown. The total estimated tax savings for the project called Skyhouse is $2.5 million over 10 years.
For Borders and his joint venture partners at Batson-Cook Development Co., a division of Kajima USA, the tax break on the $55 million project is a crucial step toward getting lenders to greenlight the project.
The ADA board, including Mayor Kasim Reed, approved the abatement that will lower Borders' tax bill in the first 10 years of the project’s life. In that period, Borders will pay an estimated $7.6 million in property taxes, said Amanda Shailendra, the ADA’s manager of business development. By year 11, Borders will pay 100 percent of the property taxes.
One board member, Julian Bene, voted against the tax break, saying the project is “very pretty. It just doesn’t need a tax incentive.”
The ADA, however, encouraged the tax break to spur job creation and generate additional property taxes from the redevelopment.
Borders built thousands of condo units in Atlanta during the real estate boom, but also lost projects and land to lenders when the market crashed. This project would be the first he has started since the beginning of the Great Recession.
In an interview with The Atlanta Journal-Constitution after the meeting, Borders said he doesn’t have construction financing yet, but the tax break is a crucial piece toward getting it because it lowers his costs in the project's first 10 years.
“It’s very important in these economic times to help us get a shovel back in the ground,” Borders said. Apartments, he explained, typically offer rent concessions in the first few years.
His plans call for 320 luxury apartments with floor-to-ceiling windows, retail space on the ground floor and an adjacent parking deck. The project is slated for the 1000 and 1100 block of West Peachtree Street.
Current annual property taxes on the site are an estimated $50,000, Shailendra told the board. She told the AJC in an interview, “The estimated property tax on the completed project is more than $450,000 in the first year," after the abatement. Each year after that, Borders will pay more of the property tax bill.
The project is estimated to create 100 construction jobs and 50 direct and indirect jobs once the apartment building and retail spaces are occupied, she said.
Shailendra said this was the third tax break approved by the authority this year.
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