The construction site of Third Rail Studios, one of the first developments at the former General Motors site in Doraville, is shown in May. Though efforts to get DeKalb schools to join a tax allowcation district or TAD are at an impasse, taxpayers could still be responsible for funding infrastructure improvements at the old GM factory, even if the DeKalb County school board won’t sign on. The development team and Doraville officials are working on alternatives to the proposed TAD. KENT D. JOHNSON /kdjohnson@ajc.com
Photo: Kent D. Johnson
Photo: Kent D. Johnson

GM site developer may try Plan B for public funding

Private developers and the city of Doraville are working on backup plans to generate taxpayer money for an ambitious redevelopment of the former General Motors plant.

City officials and the development team at the Integral Group are seeking funding for costly but needed infrastructure connecting the site to the rest of the city and to a nearby MARTA train station.

Without tens of millions in public dollars, the developer has said the project might need to be scaled back.

The more than 160-acre property has been called by state and local leaders one of the most promising redevelopment sites in the Southeast, but its future has been in limbo for months after the DeKalb County school board decided not to take part in a tax allocation district or TAD.

In April, Integral CEO Egbert Perry warned that his firm would decide by June whether to continue with its vision of a mini-city along I-285 or scrap it. He said the project could be scaled back to a more suburban-style development rather than what backers have touted as a model for transit-oriented development that could woo major corporate headquarters or private sector research facilities.

“We would downgrade our vision for the site,” Perry said at the time. “That doesn’t leave the school board any better off. It’s worse off.”

School officials have balked at the TAD plan, saying the system isn’t in the development business.

Doraville Mayor Donna Pittman said she hopes the project could move forward with a “Plan B” through a combination of potential tax breaks, government grants and other funding.

“I’m still positive about being able to accomplish what we set out for originally,” Pittman said. “I’m very disappointed in the school board, but I’m convinced we’re going to be able to make the right thing happen.”

In a TAD, property tax collections for local governments and schools are frozen in an area while it is redeveloped, and future increases in property tax collections are used to repay bonds to build roads, sidewalks, parks and sewers. After the TAD expires, local governments and schools collect the new, theoretically higher, tax revenue.

Doraville and DeKalb County signed on to the TAD, but the school board declined to take a vote on the matter. Backers of the project, known as Assembly, say a TAD with all three jurisdictions on board would be sufficient to fund about $180 million in new infrastructure, including a street grid and a covered road to the MARTA station for a project aiming to create a new downtown for Doraville.

The school system’s share is the biggest piece of the tax revenue pie. The local governments and schools would continue to collect what they do now under a TAD arrangement, but that might not be the case if another path is taken.

Tax abatement possible

It’s possible a different arrangement, such as a tax abatement from a local development authority, could reduce or eliminate property tax revenue generated for the local governments and schools. And in that case the schools might not have a say in the matter. Those tax breaks could then be used by the developer to seek financing for site improvements.

Eric Pinckney, an Integral executive overseeing the project, said discussions are fluid and could encompass a number of structures.

A TAD that involves the schools – the preferred alternative – remains on the table, he said.

The Doraville Development Authority has been considering tax incentives for the site, according to its June 22 agenda. None of the authority’s seven members or attorney returned emails seeking comment Thursday about the value or details of the potential public funding.

However, the school board isn’t moving forward with the proposal for the TAD.

“We have no movement on our end,” said school board member Stan Jester. “I would like to have a meeting and at least listen to them … I wouldn’t get my hopes up.”

School board Chairman Melvin Johnson didn’t return a message seeking comment.

Since announcing plans in 2014, Integral’s Perry has not announced committed office tenants, though a movie studio is set to open this year. Perry said in April uncertainty has caused three unnamed corporate prospects to walk.

The GM plant closed in 2008, denting the local tax base and eliminating a few thousand jobs.

The GM site, just northwest of the I-285/I-85 interchange, is prominent but also has challenges. Doraville’s development hasn’t kept pace with other major nodes along I-285 such as Dun-woody, Sandy Springs and Cumberland in Cobb County.

Integral and Doraville officials have said in the past that alternatives to all jurisdictions being in the TAD would likely generate far less money for the public infrastructure.

Doraville’s development authority last week discussed a separate bond structure that could offer long-term city, county and potentially school tax breaks. Another potential option might be creation of a community improvement district, a different type of self-taxing district for commercial property owners that uses additional taxes to finance infrastructure improvements in the district.

Integral and its partners remain on track, Pinckney said, to go to market to sell bonds for infrastructure by November. He said there will likely be multiple bonds issued over time paid for by whatever public arrangement is made.

The project recently received a $1.5 million state grant to help fund a four-lane street to connect Motors Industrial Boulevard and Peachtree Road, a key thoroughfare in the project.

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