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.
Deal confirmed an Atlanta Journal-Constitution report from earlier this month that revealed Norfolk Southern is scouting sites in metro Atlanta outside the Gulch for a potential headquarters campus – but that the deal is contingent on selling its property at the site.
“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.
Atlanta's gulch project delayed Atlanta Mayor Keisha Lance Bottoms said she will not be pushing City Council to vote on a proposal to redevelop downtown's Gulch. Her proposal provided up to $1.75 billion in public financing for the $5 billion project. The Gulch, a "40-acre hole in the ground" near the Five Points MARTA station and Mercedez-Benz Stadium, has been pitched as a possible home for Amazon's second headquarters. But before Monday's meeting, it had become apparent that Bottoms likely didn't have
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.”