The Atlanta Journal-Constitution
Beltline proposal fails to get tax break
Developer asked for incentives to help clean up landfill.
A Fulton County agency Tuesday rejected a $3.7 million tax break for a Beltline-adjacent apartment and townhome project on the site of an unpermitted landfill, as the developer failed to convince a majority of the board the incentive was justified.
Atlanta-based TPA Residential sought the tax break for the proposed development, which includes 215 apartments, 63 townhouses and a small commercial space, on a parcel at United and Avondale avenues near Zoo Atlanta.
Beltline-adjacent properties are among the hottest in the city for apartment developers, but the site includes a decades-old dump and an old city drinking water chlorination facility that presented extraordinary redevelopment costs, the developer said.
The Development Authority of Fulton County (DAFC) appeared deadlocked on the project last month and tabled the proposal to seek more information from the developer. The board deadlocked again Tuesday by a 4-4 vote, meaning the proposal failed.
Board members clashed over whether a local tax break was appropriate when TPA would also be reimbursed for a large portion of its environmental costs through a state brownfield program.
Tyler Gaines, an executive with TPA, said the site includes trash 40 feet deep or more in some areas. His company estimated $8.8 million in cleanup costs to make the land suitable for development.
Gaines said the net present
value of the state and local incentives, essentially the value of the tax breaks compared to the cost of remediation when considering time and financing expenses, still left a cost gap.
“Even after receiving both of those incentives you don’t get back to even,” Gaines said. “You have about a million-dollar hole.”
Without the DAFC tax break, the gap would be larger, and Gaines warned the project would not be financially viable to a lender.
At a DAFC meeting last month, several residents expressed support for the TPA project, citing environmental hazards. Others said the landfill is a magnet for crime.
The developers have said two other real estate companies had tried to rehab the site and develop it but passed.
Board member Tom Tidwell acknowledged the complexity
and cost of the remediation. But he said the market along the Beltline has changed drastically in recent years.
If TPA doesn’t move forward, he said, someone else will.
“The market is on fire, and this property will be developed,” said Tidwell, who voted no.
DAFC has been criticized for years as a rubber stamp that grants lucrative tax breaks for projects in welloff parts of the county.
But the authority has undergone an overhaul in the wake of reporting by The Atlanta Journal-constitution this year that revealed a culture of loose financial oversight at the agency under former leadership.
Board member and Johns Creek Mayor Mike Bodker, who voted in favor of the project, said he was sensitive to concerns about overincentivizing a project. But
he said the board has other considerations beyond tax dollars.
TPA would tackle polluted land and worked with community groups to reduce proposed density to the neighborhood’s liking, he said.
“I’ve done zoning cases for so long and when I see a developer willing to lower density and lower profit for what the community wants, I take that into consideration,” he said.
Board Secretary Kyle Lamont said the state brownfield program was designed to offset extraordinary costs, and the TPA project undoubtedly qualifies.
But he said brownfield sites “are commonplace” in Southwest Atlanta where he lives. Lamont said DAFC incentives should be used to steer development that could help clean up environmentally challenged sites in areas starved for investment.
“If we continue to place
dollars where investment will already go in some of the hottest neighborhoods, we will not see investment go where they typically will not,” Lamont said.
The $80 million proposal also includes 43 residences reserved for people making 80% of the area median income, or about $69,000 a year for a family of four, to comply with city inclusionary zoning.
DAFC Chairman Michel “Marty” Turpeau IV said it’s unclear when the current economic cycle might end and rejecting the incentive would delay development of property the neighborhood wants cleaned up.
“The value to the community is now,” he said. “The opportunity to remove the environmental hazard is now.”
After the vote, Turpeau said he hoped TPA could still find a way to move the project forward.