The board of Atlanta’s economic development agency approved more than $17 million in tax incentives for several developers on Thursday, but tax breaks for a pair of projects at the former Turner Field caused a clash among board members, with one saying the agency needs to re-think its public investment strategy.
The board of Invest Atlanta narrowly approved a nearly $2.6 million tax break for a 680-bed, $69 million student housing project called Aspen Atlanta. It will rise in a parking lot on Ralph David Abernathy Boulevard, across from what is now called Georgia State Stadium.
The votes spurred a broader conversation among board members after the meeting about whether the city is seeing enough bang for the taxpayers’ bucks.
Board member Julian Bene said the city is seeing impressive job growth and development, fueled in part by the city’s tax incentives. But overall, the property tax digest has largely stagnated since 2010, and he suggested the city might be giving away too much.
“That is not the kind of thing we should be seeing with the economic growth we’ve had,” Bene said. “We need to grapple with this.”
Bene, often a lone critical voice on the Invest Atlanta board, said just starting development at the former home of the Atlanta Braves isn’t a good enough public benefit. The combined abatements only reserve at total of 18 units in the 129-unit apartment project as affordable for residents making 80 percent of the area median income. In that light, the tax breaks for the two projects come to about $277,000 per affordable unit over 10 years.
“The public benefit I’m hearing is new development in areas south of I-20,” Bene said. “I don’t think that is enough on its own.”
Others on the board disagreed, saying denying the tax breaks put the project at risk.
Two Carter principals signed personal loan guarantees to secure financing – a not uncommon practice in real estate finance – to help kickstart development.
“The first money going into these neighborhoods is very, very difficult to get,” she said.
“It seems like a no-brainer we would develop these neighborhoods,” she said of private sector interest in the project. But the neighborhoods aren’t affluent as other parts of the city, making development there a bigger risk in the eyes of lenders.
“This is not a no-brainer at all,” she said.
After the vote, Carter President Scott Taylor said the tax deal “sets the stage for the first phase of the Summerhill project to begin.”
“We are in a very challenging lending environment and projects like Georgia Avenue might not be financially feasible but for programs like the bond for title,” Taylor said, referring to the lease-purchase bond mechanism Invest Atlanta and other such authorities uses to grant tax breaks.
Mayor Kasim Reed, who chairs the body, said the debate over affordability is “necessary and appropriate.” But, he said, members need to keep in mind promises for revitalization after the 1996 Summer Olympic Games were never fulfilled.
A no vote, he said, “puts this entire project at risk,” and would further hamper ability to recruit additional investment there.
A number of residents in the surrounding neighborhoods complained they were not notified of the Invest Atlanta meeting until the last minute and that they haven’t been included in planning for development in the area. Public comment also was held after the votes and after Reed left the meeting.
“Low income residents who have kept these communities alive for 50 years aren’t invited to the table,” said Avery Jackson, of Peoplestown.
Others said development continues to bring the real risk of displacement for long-term residents, who could be pushed out because of rising property values.
“How are we going to remain in the city of Atlanta?” asked Peoplestown resident Alison Johnson. “Where is our return on investment?”
In April, Georgia State and developers reached a community benefits deal with neighborhood associations to address systemic flooding, provide jobs and education programs, and set aside at least 10 percent of new housing for low-income Atlantans. But a separate group of neighbors that sought a community deal hasn't been satisfied.
J. Scott Trubey is the economy and environment editor for The Atlanta Journal-Constitution. He previously served as a business reporter for the AJC covering banking, real estate and economic development. Trubey is also a former investigative reporter, with a specialty in banking, real estate and public corruption. He joined the AJC in 2010.