Gov. Nathan Deal urged the Atlanta City Council to break an impasse over an incentive package that could be worth $1.75 billion to redevelop the derelict Gulch in downtown Atlanta.
The Republican said after an Atlanta Press Club event Tuesday that legislators should approve the plan to make way for a new mini-city on a “very unproductive piece of property in a prime location” in Georgia.
“It’s a good project. I hope it moves forward,” said Deal. “It’s good for the city of Atlanta and for the state.”
Deal’s administration has played a direct role in the development because the state is one of the biggest stakeholders in the 40-acre property, which sits near the Georgia World Congress Center and Mercedes-Benz Stadium.
But the development is up in the air after Atlanta Mayor Keisha Lance Bottoms was forced to delay a vote on the incentive amid a revolt from city council members who said they felt rushed to approve the incentives. Most of the council has co-sponsored legislation seeking an independent review of the plan.
California-based developer CIM Group has proposed to invest as much as $5 billion to build a mix of office towers, apartments, hotels and retail on the site, now a tangle of parking lots and railroad tracks.
But first CIM wants to acquire acreage held by the city, state, the Atlanta Fulton County Recreation Authority, MARTA and Norfolk Southern. In turn, the Virginia-based railroad giant wants to take the money from its land sale to invest in a new headquarters campus.
“We know that it’s possible that the sale of the Gulch property by Norfolk Southern railroad will lead to their potential relocation of their headquarters to Georgia,” he said. “They want to dispose of their assets in the Gulch as a precondition.”
The company's search is said to focus on Midtown, where it has scouted a development site near the former AT&T Midtown campus. The real estate publication Bisnow recently reported that the site, known as 3rd & Ponce, is under contract to a pair of undisclosed buyers.
The Gulch is a challenging site. Crisscrossed by freight and MARTA rail lines, the Gulch sits 40 feet below street level. CIM said a $500 million platform to create a dozen or more new city blocks is needed to facilitate redevelopment.
The council is set to hire a firm to examine the “fiscal and economic impact” of the incentives. An estimated $1 billion of the public financing would come from state sales taxes, and a tax allocation district on the property would funnel property taxes generated in the area toward infrastructure.
Deal said some of the concerns about the taxpayer-funded breaks for the project are overblown, though he said there are “some areas that could be tweaked, and maybe more information could be provided.”
“But when you’re asked to waive a tax that you’re never going to collect anyways, but for this project, you’re not really giving up anything,” he said. “And that’s what this amounts to: This is sales tax on something, and you’re getting none at all right now.”