Gulch bonds approval head to Invest Atlanta next

City Council approves $1.9 billion subsidy package for Gulch project

The next step toward turning 40 acres of weedy parking lots and rail lines into one of the largest redevelopments in the city’s history could be taken this week.

The Atlanta City Council Monday night approved $1.9 billion in public subsidies for the Gulch — a $5 billion project that will create a forest of office towers, residences, hotels and retail space in a barren area downtown that stretches from the CNN Center to the Richard B. Russell Federal Courthouse.

Invest Atlanta, the city’s economic development agency, must now approve $40 million in Tax Allocation District bonds to get the project rolling. And that could happen as early as this week, said Invest Atlanta spokesman Matt Fogt.

“There is still some consideration on the timing” of that meeting, Fogt said.

Passage of the massive development was a victory for Mayor Keisha Lance Bottoms, whose administration had struggled for weeks to convince a skeptical City Council on the project's merits. Bottoms told Channel 2 Action News on Tuesday the city will announce the jobs training portion of the agreement "almost immediately."

“As Mayor Maynard Jackson used to say: `From Bankhead to Buckhead’ literally was reflected in this vote, and it really has been about us working together to reach a consensus,” Bottoms said. “I just look forward to us watching literally our city transform in front of our eyes.”

City Council President Felicia Moore said Tuesday that it’s now up to council members to devise “a strategy for monitoring the progress of the development along with its adherence to the requirements as stated within the agreements.”

“Affordable housing, minority participation, job training — all of those things the community thinks of as benefits are the things the council needs to keep an eye on and make sure those promises are fulfilled,” Moore said.

Just winning council approval of the public subsidies was a marathon: After more than 10 hours of debate and deliberation on Monday, the council passed a series of four ordinances in quick succession to close the deal just before midnight.

Two of the four ordinances passed by narrow 8-6 margins.

Lack of public input cited

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 the level the street grid with surrounding viaducts.

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

“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. In addition to the one allowing issuance of $40 million in Tax Allocation District bonds, which will allow developer CIM to draw $625 million in tax revenue generated from the project, a second ordinance 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 Archibong, 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 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.”