California-based developer CIM Group wants to build a 40-acre mixed-use project on top of the railroad lines and parking lots between Mercedes-Benz Stadium, left, and the Five Points MARTA station. CIM plans to re-brand the Gulch as Centennial Yards to reflect the site’s proximity to Centennial Olympic Park and its history as a crucial rail junction in downtown. SPECIAL

Gulch bond controversy could be headed back to court

A dispute over a blockbuster incentive package for downtown Atlanta’s Gulch project could be headed back to court.

A lawyer for Redlight the Gulch, a group opposed to the up to $1.9 billion in public financing for the project, filed notice on Wednesday that it will appeal a recent judge’s decision to approve part of the agreement. The appeal will be made directly to the Georgia Supreme Court.

In June, Fulton County Superior Court Chief Judge Robert McBurney issued a ruling that paved the way for the city to issue bonds to be repaid by future sales tax revenue created within the Gulch project — to be known as Centennial Yards.

Julian Bene, a leader of the Redlight the Gulch Coalition, previously signaled his group planned an appeal. On Thursday, he said the court notice is the first step in the process.

Redlight the Gulch Coalition leaders Julian Bene, left, the group’s attorney, Carranza Pryor, and former state Sen. Vincent Fort speak following a court hearing involving public bonds for the $5 billion Gulch redevelopment project on Monday, December 10, 2018. J. SCOTT TRUBEY/STRUBEY@AJC.COM
Photo: The Atlanta Journal-Constitution

“We feel that there are very strong grounds both procedural and legal and constitutional for the court to consider,” said Bene, a former board member of the city’s economic development arm, Invest Atlanta.

McBurney ruled the city could issue “Enterprise Zone” bonds backed by future sales tax dollars generated within the development to help fund Gulch project. The judge has yet rule on a separate part of the incentive package involving future property taxes.

CIM Group, the California-based developer behind Centennial Yards, has said bonds to be repaid by the future sales and property tax revenue generated within the project are crucial to develop the 40-acre site. CIM wants to turn the Gulch, a dead zone of parking lots and weedy rail beds between Mercedes-Benz Stadium and the Five Points MARTA station, into an up to $5 billion mix of office towers, apartments, hotels and retail.

California-based developer CIM Group wants to build a 40-acre mixed-use project on top of the railroad lines and parking lots between Mercedes-Benz Stadium, right, and the Five Points MARTA station, to the left of this image. CIM plans to rebrand the Gulch as Centennial Yards to reflect the site’s proximity to Centennial Olympic Park and its history as a crucial rail junction in downtown. J. Scott Trubey/strubey@ajc.com
Photo: The Atlanta Journal-Constitution

In November, after weeks of wrenching debate, Atlanta City Council narrowly approved the public funding.

The first-of-its-kind public financing package allows the developer to recoup 20 years of future property taxes created within the development site and 30 years of future sales taxes on the property to help fund infrastructure and vertical construction.

In return, CIM committed to developing at least 200 workforce housing units, a donation of $28 million toward a citywide affordable housing trust fund, $12 million to a citywide economic development fund, and an additional $12 million to fund a new fire station. CIM also will donate $2 million to a worker training program and agreed to 38 percent minority and women-owned business participation in the construction of the complex.

CIM declined to comment on the notice of appeal.

Redlight the Gulch initially objected to both the sales tax and property tax incentives on several technical and constitutional grounds. They’ve also argued that sales tax revenue projections fall short of what’s needed to repay the bond debt. The city and CIM have said the developer is on the hook for any shortcomings in tax revenue.

In a statement, a spokesman for Bottoms said “the city respects the process and remains confident in a favorable outcome in light of the court’s well-reasoned opinion.”

The incentive package remains controversial. Critics decried the deal as a giveaway that came with too few public benefits.

The financing package also triggered a battle between the city and Atlanta Public Schools, which voted to restrict the city’s use of school tax dollars before the two sides came to an agreement in January. That January pact, however, has been anything but smooth and APS has said the city hasn’t fulfilled all its commitments.

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