The Atlanta Journal-Constitution

HOW A TAX BREAK MAY HELP GM PLANT PROJECT

Doraville’s abandoned GM site may get access to redevelopm­ent cash.

- By Mark Niesse mark.niesse@ajc.com and J. Scott Trubey strubey@ajc.com

The developer trying to revamp the abandoned General Motors plant in Doraville may be allowed to redirect tax money from the school system and other government­s to pay for a concourse linking the site to MARTA.

Integral Group — along with other land owners on the site — could be given control over how to spend a portion of their property taxes. That money, roughly half of the taxes paid, would be dedicated to a covered street connecting the site to MARTA at a cost between $50 million and $75 million.

If approved, the arrangemen­t could be unpreceden­ted in Georgia, said experts familiar with public financing of private projects. It also could be used to fund other infrastruc­ture on site.

The DeKalb school system, which has resisted contributi­ng to the project, wouldn’t have a say over the diversion of tax money for the Doraville site. A spokes- man for the district expressed concerns about education taxes being devoted to a private venture.

The Doraville Downtown Developmen­t Authority, like economic developmen­t boards across Georgia, has the power to provide tax financing incentives to encourage business growth. The authority hasn’t yet finalized the incentives for the plant’s redevelopm­ent or determined how much they’ll be worth.

Backers of the project, called Assembly, want to make the 165- acre area a mini-city along I-285, with the potential for high-rise office towers, retail and housing. DeKalb schools didn’t sign off on an earlier incentive package, and this new arrangemen­t will mean the project will move forward at a slower pace, said Eric Pinckney, an executive with the developer, Integral Group.

“We are committed to the full vision,” he said. “The only thing that is in question is how quickly

we can put (the infrastruc­ture) in place.”

The street from the site to the MARTA station is essential, Pinckney told the developmen­t authority last month. Once businesses see that they’ll have access to public transporta­tion, they’ll commit to building on the site.

After Labor Day, an unnamed out-of-state company plans to announce a relocation to the Assembly site, bringing between 300 and 500 jobs to a facility that’s as large as 200,000 square feet, he said. An office developer is considerin­g a half-million-square-foot speculativ­e developmen­t.

Tax incentives are a potent tool to attract businesses to relocate or expand in Georgia, but none has previously been structured like the Doraville project’s.

The site’s three property owners plan to create a community improvemen­t district, or CID, to impose a tax on themselves to raise public money exclusivel­y for the MARTA connection and future infrastruc­ture improvemen­ts.

The Doraville authority, meanwhile, would provide a tax abatement to eliminate local taxes equal to the CID tax, keeping the total tax burden for businesses on the site cost-neutral.

Taxes paid on the site totaled nearly $915,000 in 2014, with more than $460,000 going to the county school system.

The Assembly project incentive plan is unpreceden­ted, said Sarah Larson, a senior researcher at Georgia State University’s Fiscal Research Center and expert on CIDs.

The structure would effectivel­y give Integral, which controls the bulk of the site, an outsized say over millions of dollars in public funds.

There are currently about 25 active CIDs that tax themselves a little extra for items like infrastruc­ture, parks, security and beautifica­tion, she said. The Assembly CID would charge its businesses 25 mills in property tax, the maximum allowable under state law. Most CIDs levy about three to five mills.

CIDs provide an important way for businesses to raise money for specific upgrades, without having to wait on local government­s to determine spending priorities, said Yvonne Williams, president and CEO of the Perimeter CID.

“It’s a new system rather than waiting on government to 100 percent finance everything,” Williams said. “We want to have skin in the game. We want to be part of the opportunit­y to create opportunit­ies that add value to our properties.”

The Doraville Downtown Developmen­t Authority could vote in August on the specific value and terms of the abatements.

The developers and the city of Doraville would have preferred to work with the DeKalb school system on a different financing mechanism, called a tax allocation district, or TAD.

Unlike the current funding proposal, a TAD would have preserved the current tax base for the school system and other government­s, and future growth in property tax revenue would have been used to pay for infrastruc­ture improvemen­ts.

The school district could still participat­e in a TAD for the parts of the tax base that aren’t abated by the developmen­t authority, said Doraville City Manager Shawn Gillen.

“We’re not giving up. The TAD is the best path forward,” Gillen said. “The school district is losing out on tens of millions of dollars . ... We’re redirectin­g the tax dollars to a specific purpose to allow the developmen­t to happen.”

The school system asked the developer to answer detailed questions about the TAD but hasn’t received answers, said spokesman Quinn Hudson.

“It takes resources to give kids a great education, resources to hire and retain the best teachers, resources to provide the best profession­al developmen­t, and resources to grow the best talent,” Hudson said. “The district is always concerned when these resources, necessary to educate DeKalb’s 102,000 students, are put in jeopardy.”

School board Chairman Melvin Johnson said the board hasn’t discussed the TAD proposal or the tax abatement plan.

Tax incentives wouldn’t be the only funding source for Assembly’s infrastruc­ture.

The project recently received a $1.5 million state grant, and developers plan to also seek federal Transporta­tion Investment Generating Economic Recovery (TIGER) grants worth millions of dollars. In addition, the city of Doraville already approved a tax allocation district for the site, and it could grow in value if the county government and school system sign on.

 ?? KENT D. JOHNSON / KDJOHNSON@AJC.COM ?? Doraville Mayor Donna Pittman walks through the constructi­on site of Third Rail Studios, one of the first developmen­ts at the former General Motors site, in May. Integral Group and other land owners on the former GM site could be given control over tax...
KENT D. JOHNSON / KDJOHNSON@AJC.COM Doraville Mayor Donna Pittman walks through the constructi­on site of Third Rail Studios, one of the first developmen­ts at the former General Motors site, in May. Integral Group and other land owners on the former GM site could be given control over tax...

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