Dunwoody shopping center approved last year gets $2.3M tax break

The project will involve paving over this pond and building a shopping complex. (Photo: HYOSUB SHIN / HSHIN@AJC.COM)

Developers are set to receive an estimated $2.3 million in tax breaks for building a new shopping center in a Dunwoody business district that is already home to several strip malls and retail options.

With the tax abatement for the $38 million project approved last month by the Dunwoody Development Authority, crews could begin work as soon as next month at the site off Ashford Dunwoody Road, less than a mile north of Perimeter Mall.

The Dunwoody City Council approved the rezoning for the shopping center in June but it’s not clear if the shopping center would have been built without a tax break.

Tax incentives are usually designed to encourage businesses to relocate or expand. Michael Starling, the city’s economic development director, acknowledged it is rare for Dunwoody to approve a tax incentive for a traditional retail shopping center.

The city of Dunwoody put up public notice signs around the property earlier this year. (Photo: HYOSUB SHIN / HSHIN@AJC.COM)

But Starling said city officials discussed the abatement with the developers from Atlanta-based Branch Properties, who indicated the project might not happen otherwise.

“That’s really the big question on all these tax abatements when we do them: If we don’t do them, are they going to get built anyway?” Starling said. “Are we better off with the development or without?”

The tax break allows Branch to pay less on their property taxes than they normally would for 10 years. Those funds would otherwise go to the city, county and county school system.

Known as “Perimeter Marketplace,” the new complex will feature an upscale grocery store, as well as a bank, gas station and several restaurant and retail offerings, according to plans filed with the city.

The 10-acre plot is currently home to three large restaurant buildings, constructed in the 1990s, and a stormwater detention pond between Ashwood Parkway and Meadow Lane Road. Only one of the restaurants, P.F. Chang’s, is currently occupied. Brio Tuscan Grille and McCormick and Schmick’s both closed within the last two years.

This rendering provides a look at how the corner on Ashford Dunwoody Road could change. (Photo: Branch Properties, via city of Dunwoody)

Jack Haylett, the senior vice president at Branch, told The Atlanta Journal-Constitution last week that he couldn’t say whether the project would have moved forward without the incentive. “But it would have made for very tough conversations inside of Branch as to whether we would proceed,” he said.

Both Haylett and Starling pointed out that Branch is making public infrastructure improvements around the property. Branch plans to spend more than $5 million to build a new road between Ashwood Parkway and Meadow Lane Road and install a portion of the Ashford Dunwoody Commuter Trail, a pedestrian path along the busy thoroughfare that will eventually connect commuters with the Dunwoody MARTA station.

The development authority, which is made up of volunteer residents appointed by the mayor and City Council, understands that the abatement has an impact on the county and school systems’ tax digest, Starling said. But he pointed to a fiscal impact analysis, conducted by the Georgia Tech’s Enterprise Innovation Institute, that forecast the city, county and school system will make a net profit off the project after accounting for the tax breaks. The shopping center is expected to bring in millions in sales taxes, property taxes and business fees.

Ducks and geese swim in a pond in Dunwoody, Monday, June, 10, 2019. Developers plan to pave over the pond and building a shopping center. (Alyssa Pointer/alyssa.pointer@ajc.com)

The project is also expected to support 370 new employees with an average wage of $35,684, according to the fiscal analysis.

In the past, the city has awarded larger abatements to mammoth office towers in Perimeter Center. In 2016, State Farm requested $15 million in incentives for an office tower it had recently constructed. No benefits were awarded after authority members said they opposed giving a tax incentive for a building that’s already finished.

The city instead gave the company an estimated $34 million in tax breaks to build two more office towers nearby, the AJC reported.

Close to the State Farm campus, construction is nearing completion on a 16-story office tower that was awarded incentives worth about $9.4 million.

With the tax abatement for Perimeter Marketplace given the initial OK, Haylett said they plan to begin loading dirt onto the site within the next month. Construction on the buildings could begin toward the middle of 2020, with the opening of the 25,000-square-foot grocery store slated for late 2021.

Developers said they cannot yet reveal which grocery store the shopping center will house, but Haylett said it will be a first for the area. The name of the bank and other shops and restaurants have also not been announced.

Follow DeKalb County News on Facebook and Twitter 

Wouldn’t you like to support our strong journalism? Your subscription helps us cover your communities in a way that no one else can. Visit https://subscribe.ajc.com/hyperlocal or call 404-526-7988 to begin or renew your subscription.

In Other News