Atlanta City Council approves $1.9 billion subsidy package for Gulch project

City Council approves $1.9 billion subsidy package for Gulch project

After more than 10 hours of debate and deliberation on Monday, the Atlanta City Council approved nearly $1.9 billion in public subsidies for a downtown development that will permanently reshape the city’s skyline.

Council members listened to seven hours of public comment before beginning their own deliberations then taking four quick, successive votes on the Gulch development — a $5 billion deal that will create a forest of office towers, residences, hotels and retail space on 40 acres that stretch from the CNN Center to the Richard B. Russell Federal Courthouse.

The four ordinances, two of which passed by narrow 8-6 margins, were finally approved just before midnight.

The massive development will be built on platforms of parking garages, needed to lift the new neighborhood above a canyon of asphalt and railroad tracks, and to level the street grid with surrounding viaducts.

Passage of the measure was a major victory for the first-year mayor, who three times had to postpone a vote for lack of council support. Now, she can take credit for closing on a deal that will build a mini-city within Atlanta’s downtown and have a generational impact.

After the vote, Bottoms paid a visit to the council chambers and quoted Nelson Mandela, the South African anti-apartheid political leader.

“He said: `It always seems impossible until it’s done,’” Bottoms told the council. “And over the past few months, at times this has almost seemed impossible. But … we are here today. I do trust history will be kind to us, and we will be judged on how we leave this city.

“We have created a new model. We have created a model that will be replicated by cities and counties across this nation.”

Not everyone agrees.

The project polarized much of the community: Supporters see it as an investment in jobs, affordable housing and economic development, while critics complain the project was rushed through without sufficient public input and will further income inequality and gentrification.

Julian Bene, an opponent of the plan who previously served on the Invest Atlanta board, said Bottoms and project supporters on the city council will be long gone when the cost of the plan hits home.

“The first few years, there’s not much bite,” Bene said. “The public is not going to feel the stagnation of the property tax rebates for eight or nine years.”

The deal was separated into four ordinances. One approved the issuance of $40 million in Tax Allocation District bonds to get the development rolling. That ordinance, which passed unanimously, will then allow developer CIM to draw $625 million in tax revenue generated from the project. A second established the project in a so-called Enterprize Zone, which will allow $1.25 billion in sales tax revenue collected from the project to be returned to the developer.

The Enterprize Zone ordinance passed 8-6, as did a third ordinance allowing the developer to draw down revenue from the Tax Allocation District. Council members voting against those ordinances were: Natalyn Archibond, Andre Dickens, Amir Farokhi, Jennifer Ide, Howard Shook and Matt Westmoreland.

Farokhi said one of the main reasons he didn’t support the project was the lack of public input.

“Public input happened in spurts, but I think future deals for our city have to have a much bigger table of folks,” Farokhi said. “I think given the scale of this deal, its lasting impact, we should have had and we would have been better off in investing more time in public conversation.”

Developer CIM was founded by Richard Ressler — whose brother, Tony, is the lead owner of the Hawks. CIM committed to having 10 percent ownership go to minority-owned interests, which haven’t been identified.

The development will be the largest since Peachtree Center started in the 1960s. CIM proposes 18 parcels with at least nine skyscrapers of 225 feet or more in height, including one rising 500 feet or about 40 stories.

The plan also calls for 9 million square feet of office space, 1,000 residences, 1,500 hotel rooms and 1 million square feet of retail.

After postponing votes on the development, Bottoms two weeks ago unveiled a revamped deal that reduces its dependence on long-term borrowing and increases the incentive for CIM to build faster so tax revenue can be used to recoup some of the project costs.

Councilman J.P. Matzigkeit was a persistent critic of the plan, but voted in favor of all four ordinances Monday.

“The easiest thing for me to do would have been to vote against this,” Matzigkeit said. “No deal is ever perfect, and I have a lot of issues with the process that got us to this point. In fact, I was proud to join with my colleagues to be a loud voice of opposition to the two previous versions of this deal.

“I believe that opposition got us to a much better point today and to a much better deal for the city. That’s what a good city council is supposed to do. I’m satisfied this is a fair deal for the city with limited down side.”

The council listened to hours of public comment before even starting their own deliberations. Among those from the public speaking was former Ambassador Andrew Young, who served as Atlanta mayor from 1982-90.

“We’ve never had an offer, to my knowledge, to put money in the Gulch,” said Young, who was the first speaker of the day. “And doing nothing costs us money. I have cast my lot with meaningful, successful and visionary developers. I hope you will see the wisdom in this case.”

Young’s remarks set off an explosion of applause and jeers — and caused City Council President Felicia Moore to threaten to throw out individuals or even clear the room if there were more outbursts. Spectators, who spilled out of council chambers into two overflow rooms where the meeting was being broadcast on televisions, kept their emotions in check the rest of the day.

Opponents of the development released a legal analysis of the development last week, questioning the constitutionality of a portion of the agreement. Former Georgia Sen. Vincent Fort said approval of the council wouldn’t end the issue.

“The legal issue is real,” Fort said. “We’re very serious about making sure the legal structure of this deal does not punish taxpayers.”