Bottoms halts vote on public financing for downtown Atlanta’s Gulch

Atlanta's gulch project delayed Atlanta Mayor Keisha Lance Bottoms said she will not be pushing City Council to vote on a proposal to redevelop downtown's Gulch. Her proposal provided up to $1.75 billion in public financing for the $5 billion project. The Gulch, a "40-acre hole in the ground" near the Five Points MARTA station and Mercedez-Benz Stadium, has been pitched as a possible home for Amazon's second headquarters. But before Monday's meeting, it had become apparent that Bottoms likely didn't have

Lacking the votes to win City Council approval, Atlanta Mayor Keisha Lance Bottoms halted her push Monday for a vote on her proposal to provide up to $1.75 billion in public financing to help redevelop downtown's Gulch.

It was a setback for Bottoms in her first year in office. Now, it’s unclear how soon council might take up the matter. But the weeks ahead will show if she can build consensus around a $5 billion development plan that could reshape downtown.

“We recognize and respect that members of Council, and the public, need more time to understand the largest development deal in our city’s history,” she said in a statement issued Monday. “… Members of my Administration will continue to work with members of Council and the public to better understand the substantial benefits we have negotiated and the benefits this project will bring to our entire city.”

It was a jarring about-face for the mayor, who on Friday went on radio station V-103 and called out council members who weren’t on board for “playing politics.”

Williams Boone, a Clark Atlanta University political science professor, said without the votes, Bottoms had little choice.

Unlike her predecessor, Kasim Reed, who had a more pliant council, Bottoms faces a body with seven new members. Most of the new class aren’t politically dependent on her, Boone said.

“They do not necessarily owe their elections to the current administration,” Boone said. “It’s not as if they feel like they rode in on the coattails of the current administration.”

California developer CIM Group has proposed a mini-city in the Gulch, a barren stretch of rail lines and parking lots between the Five Points MARTA station and Mercedes-Benz Stadium.

The project could grow to more than 9 million square feet of offices, 1,000 residences, hotels and a large mall worth of retail. CIM and the state have pitched the Gulch project to Amazon as a location for the e-commerce giant's second headquarters. But the developers have said they'll move forward with a smaller project if Amazon doesn't bite.

It’s a challenging site. Crisscrossed by freight and MARTA rail lines, the Gulch sits 40 feet below street level. CIM said a $500 million platform to create a dozen or more new city blocks is needed to facilitate redevelopment.

Mayor Keisha Lance Bottoms speaks during a ground breaking ceremony for the new Westside Park at the Bellwood Quarry in Atlanta, Thursday, September 6, 2018. Bottoms has urged City Council to approve a potential 10-figure public financing package for downtown’s Gulch. (ALYSSA POINTER/ALYSSA.POINTER@AJC.COM)

icon to expand image

CIM has agreed to providing at least 200 units of affordable housing, or 20 percent of the total, but that could rise to 30 percent. CIM also has committed $12 million to an economic development fund and $12 million for a fire station, among other concessions.

The proposed public financing would be funded, in part, by a portion of sales taxes collected within the confines of the development under a new state incentive called an Enterprise Zone.

The other funding stream would come from tax allocation district (TAD) bonds repaid by expected increases to property taxes generated by expected new development.

RELATED CONTENT: GULCH PROJECT

Critics of the Gulch plan fear the council is being rushed into a blockbuster incentive package that could cost taxpayers more than the city has projected, and they contend the deal’s benefits don’t justify the public costs.

Supporters say the financial risk falls on the developer. About $1 billion of the public financing will come from state sales taxes, and supporters tout the deal as a boon to both affordable housing and economic opportunity in the city.

Councilman Michael Julian Bond, one of the co-sponsors of four pieces of Gulch-related legislation, also applauded the pause. After a meeting Friday with Bottoms’ team, Bond said he thinks the city could obtain additional concessions from CIM.

“This is a tremendous ask that will potentially yield tremendous results,” Bond said. “So, I think while we are at this stage, you should ask for the moon.”

In a statement, CIM said it will work “to ensure that members of the community and City Council fully understand and appreciate the merits of the thoughtful financial structure and development plans for the Gulch.”

“We firmly believe that by allowing more time for transparent, thorough and comprehensive responses to the valuable questions raised will result in a transformative development in the heart of downtown Atlanta, positively contributing to the city for generations,” the company said.

City Councilman Matt Westmoreland confers with Councilwoman Jennifer Ide during a recent committee work session to study the Gulch deal. BOB ANDRES /BANDRES@AJC.COM

icon to expand image

The pullback followed a dramatic few days in which Bottoms worked in public and behind the scenes to lock down votes.

On Friday, Bottoms appeared on V-103 and urged listeners to call undecided council members, including Natalyn Mosby Archibong, Andre Dickens, Amir Farokhi and Matt Westmoreland.

“I don’t know how we can possibly miss this opportunity simply by playing politics,” she said.

Bottoms' office also scrambled to fend off rumors over the weekend that President Donald Trump and son-in-law Jared Kushner might be partners in the Gulch deal. The NAACP and other groups circulated news reports about CIM and its business ties to the president and White House adviser.

Bottoms’ office circulated a letter from CIM asserting it “has no current investments, partnerships or management agreements with Kushner Companies, the Trump Organization, or affiliates or family members of those organizations.”

“These parties did not and will not have any participation in CIM’s investment in the Gulch,” the letter said.

CIM and Kushner Companies were once partners on four projects in New York, but not any longer.

CIM also owns the tower formerly known as the Trump SoHo in New York. Trump’s hotel management company no longer operates the hotel, which has been renamed.

Any connection to Trump is a potential nonstarter for left-leaning members of the council. Many of Trump’s policies, including those on immigration, are wildly unpopular with the city’s Democratic Party base.

In an indication of how tight a Gulch vote might be, Bottoms recently sought an opinion from Sam Olens, a former state attorney general, about whether Councilman Ivory Lee Young, recovering from a major medical procedure, could vote by phone.

Young, who represents English Avenue and Vine City, was not present in-person or by phone at Monday’s council meeting.

Olens informed the mayor’s office and council that a member can vote remotely under the most recent revision to the Georgia Open Meetings Act, which governs public access to government proceedings.

Atlanta city council members, including Andrea Boone (right) and Joyce Sheperd, attended a recent committee work session to study the Gulch deal. Atlanta Mayor Keisha Lance Bottoms decided to delay a possible vote on a package of up to $1.75 billion in public financing on the deal. BOB ANDRES /BANDRES@AJC.COM

icon to expand image

The 2012 revision of state law said, “so long as a quorum is present in person, a member may participate by teleconference if necessary due to reasons of health or absence from the jurisdiction.”

Vincent Fort, a rival of Bottoms for mayor last year and a former state senator, offered a blistering rebuke of Bottoms at City Hall on Monday.

“The mayor’s calling folk out on the radio, calling folk on their phones,” he said. “They tried to get a sick man out of the bed. What kind of city is this? What kind of City Hall is this? People more concerned with being on the cover of Ebony Magazine than serving the people of southwest Atlanta.”

Bottoms recently appeared in Ebony along with U.S. Sens. Kamala Harris and Cory Booker.

“Politics isn’t about being a celebrity,” Fort said. “Politics is about serving people, particularly those people who can’t get help from anyone else.”


Our reporting

The AJC first reported the city and CIM Groups talks on a potential 10-figure public financing package for the Gulch project. AJC reporters have also looked at the potential costs and community benefits of the up to $5 billion project that could remake a 40-acre site into a mix of offices, retail, hotels and residences. On Monday, Bottoms called off a potential vote on the deal to give City Council and the public more time to examine the proposal. Bottoms has called a public hearing at 6 p.m. Sept. 26 at City Hall.

MORE DETAILS ON THE GULCH REDEVELOPMENT

  • Partners: California-based CIM Group and the Atlanta Hawks. CIM was co-founded by Richard Ressler. Ressler's brother, Tony Ressler, is the lead owner of the Hawks.
  • Scope: A project of $3.5 billion to $5 billion. The plan could grow to more than 9 million square feet of office space, 1,000 residences, 1,500 hotel rooms and 1 million square feet of retail space.
  • Public investment: Documents obtained by the AJC show the developers are seeking public financing of $900 million to $1.75 billion, though those figures could increase. The public funding for the project would be funded by a portion of future sales taxes generated on site and bonds backed by expected future increases in property taxes.
  • Community benefits: Among others, Mayor Keisha Lance Bottoms' office touts the potential for $125 million in bond financing to aid Westside neighborhoods; a $28 million investment in a citywide affordable housing trust fund; at least 200 residences, or at least 20 percent, set aside as affordable.

Sources: City of Atlanta, CIM Group and AJC analysis

What they said

  • City Councilman Matt Westmoreland: "I have always said that I want development in the Gulch. That continues to be true. I just need to be sure that it's the best deal for Atlanta and her residents."
  • Central Atlanta Progress CEO A.J. Robinson: "I believe the mayor made the right move in putting off the vote for now… . This is a big, complex development that is important to the future of the entire city, and warrants as much understanding as possible by the public and our elected officials. Having said that, I have seen other large deals like this here and around the world, and what has been presented stacks up very well with major public-private ventures of the same size and scope. So I would hate to see us drag this out indefinitely so that we miss a very unique opportunity."
  • Georgia Standup Executive Director Deborah Scott, an advocacy organization for working families: "I know you are in a difficult position. But guess what? The nod squad is over. … This is time out for strong mayor, weak council."