Once again, a proposal to award a $15 million tax abatement to a big Miami developer is alive and kicking again in DeKalb County.
The plan to build an apartment/hotel/office complex near North Druid Hills and Briarcliff roads has been around since at least January 2020. That’s so long ago that few of us had ever even heard of a coronavirus.
The area, adjacent to the massive new Children’s Hospital of Atlanta, has since been annexed by the covetous city of Brookhaven, which seeks to gobble up just about any valuable piece of terra firma east of I-85.
Developers seeking tax giveaways from city and county development authorities is nothing new. The development authority next door in Fulton County dispenses them like Shriners throwing candy to kids at parades.
On Monday, the DeKalb County development authority, which goes by the optimistic moniker Decide DeKalb, voted 4-2-1 in favor of the tax break. However, that motion actually failed because there are two unfilled spots on board and developers need 5 votes to go away happy.
There is little doubt that the development firm, called the Related Group, will return. They’re a resilient bunch.
At issue is an age-old argument: Developers and their supporters on development authorities often say that building something new and big is better than nothing, even if the new construction gets a generous tax discount. Opponents like DeKalb Commissioner Ted Terry, who spoke at Monday’s meeting, say the area in question is red hot and no incentives are needed there.
This proposed tax abatement has bounced from DeKalb’s development authority to Brookhaven’s and now back to DeKalb’s. Can’t someone just give a builder a break?
In 2021, the Related Group moved its abatement ask from DeKalb’s authority to Brookhaven’s after DeKalb school officials and county commission members opposed the deal, saying they didn’t want to lose millions in potential property taxes. The developers then went to Brookhaven’s authority but then DeKalb’s commission threatened to oppose them in court.
The harried Related Group then moved, hat in hand, back to DeKalb’s authority, no doubt figuring that DeKalb’s commission would not sue its own development authority. They also employed Tharon Johnson, a veteran political schmoozer who is also DeKalb’s lobbyist, to help pave the way.
They seemed to get some momentum. Last fall, DeKalb’s development authority gave an initial OK to a $15 million abatement over 10 years. Authority officials say the 381 “Class A” apartments, the 55,000-square-foot medical office building and the 140-room hotel would bring in almost $10 million dollars in property taxes over the next decade, even with the $15 million abatement.
DeKalb School Board member Allyson Gevertz attended the meeting to say the schools had heard nothing about the meeting or the vote until the last minute. The schools, which are always the biggest losers in such deals, have long requested to have a member representing their interests on the development board.
However, this might pose a problem: The development board might not want someone representing the entity that gets hit the worst. That might make their meetings interesting.
The developers say they will pay $2 million extra to the schools over the next four years to make the deal (more) palatable. They say they’ll create 220 temporary construction jobs and 270 new jobs at the medical office building and that the hotel will house families with kids at the nearby hospital.
Credit: Christina Matacotta
Credit: Christina Matacotta
Also, they tout that 20% of the apartments will be “workforce housing.”
In a statement, Related told me that, “Qualifying individuals making about $40,000 a year would be able to live in our community for $1,200/month as opposed to $2,000/month market rate rent.”
However, that’s just window dressing.
That theoretical person making $40,000 is someone earning 60% of the Average Median Income (AMI) for that area. But the Related Group plans to have just four (4) units for families in that 60% AMI bracket. (By the way, the median income for an individual is about $71,000.)
The plan calls for 10% of the 381 units to be set aside for families making 80% of the AMI — that’s $57,000 for an individual, $65,000 for a couple and $81,000 for a family of four. Another 10% of the “workforce” apartments will be set aside for families making 120% of AMI — or about $124,000 for a family of four, according to my calculations.
Usually, the authority demands 20% of the apartments at the 80% AMI level for a tax break in that area. A Related Group member told the board they couldn’t pull off the project at those levels, even with a tax break.
DeKalb board member Andrew Greenberg, one of the two “no” votes, said “in my seven years on this board, this is the least justifiable inducement brought for a vote.”
“Frankly, no developer should require an abatement to develop this property,” he said. “This incentive creates an unnecessary precedent...We should not create an expectation that any developer could get their taxes reduced in this part of the county.”
Who wants a line of needy developers at the door?