DeKalb prepares to challenge $15M tax abatement planned in Brookhaven

01/02/2020 — North Druid Hills, Georgia — The exterior of Briarcliff Station, a shopping complex located near 2601 Briarcliff Road, in the North Druid Hills neighborhood in unincorporated DeKalb County, Thursday, January 2, 2020. Developers are hoping to build a tall, mixed-use development in this space with the condition that the property be annexed into the city of Brookhaven. (ALYSSA POINTER/ALYSSA.POINTER@AJC.COM)

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01/02/2020 — North Druid Hills, Georgia — The exterior of Briarcliff Station, a shopping complex located near 2601 Briarcliff Road, in the North Druid Hills neighborhood in unincorporated DeKalb County, Thursday, January 2, 2020. Developers are hoping to build a tall, mixed-use development in this space with the condition that the property be annexed into the city of Brookhaven. (ALYSSA POINTER/ALYSSA.POINTER@AJC.COM)

If the Brookhaven Development Authority moves forward with a controversial $15 million tax abatement for a large mixed-use project, DeKalb County could challenge the transaction in court.

The Related Group LLC plans to replace an aging strip center near Briarcliff and North Druid Hills roads with a development that would include 55,000 square feet of office space, a 140-room hotel and nearly 400 apartments.

The developer originally sought a tax break from the Decide DeKalb Development Authority but, after concerted pushback from county commissioners and school board leaders, that application was withdrawn.

Related Group then filed a similar application with the Brookhaven Development Authority. Late last month, that agency gave initial approval to a transaction that would involve issuing up to $160 million in bonds and granting a 10-year tax abatement valued at up to $15 million.

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An aerial view of the planned site for "Manor Druid Hills," a mixed-use development near Briarcliff and North Druid Hills roads. The buildings inside the yellow lines would be replaced with office space, a 140-room hotel and nearly 400 apartments. SPECIAL PHOTO

An aerial view of the planned site for "Manor Druid Hills," a mixed-use development near Briarcliff and North Druid Hills roads. The buildings inside the yellow lines would be replaced with office space, a 140-room hotel and nearly 400 apartments. SPECIAL PHOTO

Combined ShapeCaption
An aerial view of the planned site for "Manor Druid Hills," a mixed-use development near Briarcliff and North Druid Hills roads. The buildings inside the yellow lines would be replaced with office space, a 140-room hotel and nearly 400 apartments. SPECIAL PHOTO

The DeKalb Board of Commissioners approved Tuesday a resolution that would pave the way for county attorneys to file a challenge to the transaction, if and when it reaches the bond validation stage in superior court.

As of Wednesday, no such court date was believed to have been scheduled.

Representatives from Brookhaven and its development authority have previously said the abatement is justified because the current development on the site — Briarcliff Station — generates about $130,000 in tax revenue each year. Even during the decade-long incentive period, they said, the new project would bring in somewhere between $14 million and $18 million in new net tax revenues.

City officials have said the incentives are needed to “facilitate the construction of the hotel, to offset the cost of supplying the affordable housing units, and to defray the cost of some public infrastructure improvements.”

ExploreBrookhaven Development Authority moves forward on $15M tax abatement

DeKalb Commissioner Jeff Rader, meanwhile, has spearheaded resistance to the proposed abatement, saying it would unnecessarily limit tax revenue coming to the county and its school district. The area is one of the most sought-after in the county for developers.

Projects like the one in question, which has been dubbed “Manor Druid Hills,” are meant to capitalize on new demand driven by billion-dollar expansions that Children’s Healthcare of Atlanta and Emory Healthcare are undertaking nearby.

Those facilities are tax exempt.

“Taxes earned from properties developed in response to these generators can help offset the deficit,” Rader said Tuesday, “but not if they too are exempted from their lawful tax burden.”

The resolution adopted by DeKalb commissioners does outline a situation in which the county would not oppose the transaction between Brookhaven and Related Group.

Those parameters include the project being taxed at 50% its first year and increasing by 5% each subsequent year, with abatements applied to city of Brookhaven taxes at the same rate as county taxes. Direct payments would also have to be made to the DeKalb County School District “in an amount equal to all tax revenues” that would otherwise be collected if the project was fully taxable.

In an emailed response to inquiries about the county commission’s resolution, Brookhaven Mayor John Ernst said only this: “We thank them for their input.”