Orlando developer to buy former GM plant in Doraville (Atlanta: 2013, condo)

[jsvh]

Looks like they put a version out from behind the paywall: http://www.bizjournals.com/atlanta/n...e-project.html

Apparently DeKalb Schools isn't onboard with creating a TAD to connect Buford Highway & Doraville so the area might end up becoming an outlet mall or something.

It remains unlikely a pivotal vote to contribute public funding to redevelop the former Doraville General Motors plant will come before the DeKalb County school board.

As its developers and DeKalb economic development leaders warn the project is stalled without the funding and may be in jeopardy, top school board officials appear to be digging in their heels.

...

Perry said he is in regular discussions with the project’s capital partner, which is indicating it’s starting to feel less comfortable. With each passing month, plans to create a dense urban node on the Atlanta Perimeter, a “city within a city,” are being weighed against offers from developers who envision other uses, including a more typical suburban housing development or outlet mall.

...

“I suspect most school systems are underfunded,” Sharbaugh said. “So superintendents are dealing with their own funding issues. But, it takes vision for a superintendent to say ‘I’m OK with deferring some money to build infrastructure if we can get more funding down the line.”

Ultimately, the school system has to face tough economic realities.

“If the (GM) plant just sits there and nothing happens, the value of the property will go down,” Sharbaugh said. “If the value goes down, the tax base does, too, and the underfunding of the school system continues.”

[wasel]

Hmmm. I don't think I agree that the property value will go down in status quo mode, as it is really is a prime location.

I'm have a personal sense of urgency for this property to be developed as I own rental property near to there, but at the same time I understand the DeKalb superintendent's position. I'm not in favor of TADS being used to fund for-profit ventures in areas that are not blighted. Yes, this is a former plant and not a pretty area but it is far from blighted...the property is in a prime location right at the crease of several major arteries AND a transportation line.

With that, I think the developer and "capital partner" can find a way to fund this without the TAD. It's really just profit motivation that causes them to say they can't do it. If there were no TADS, they'd be finding a way to pay for development.

[bu2]

Originally Posted by wasel

Hmmm. I don't think I agree that the property value will go down in status quo mode, as it is really is a prime location.

I'm have a personal sense of urgency for this property to be developed as I own rental property near to there, but at the same time I understand the DeKalb superintendent's position. I'm not in favor of TADS being used to fund for-profit ventures in areas that are not blighted. Yes, this is a former plant and not a pretty area but it is far from blighted...the property is in a prime location right at the crease of several major arteries AND a transportation line.

With that, I think the developer and "capital partner" can find a way to fund this without the TAD. It's really just profit motivation that causes them to say they can't do it. If there were no TADS, they'd be finding a way to pay for development.

Agreed. I don't want to give away school tax dollars so a developer can make more money. Its not the school district's role to speculate on land development.

[cwkimbro]

Originally Posted by wasel

Hmmm. I don't think I agree that the property value will go down in status quo mode, as it is really is a prime location.
.

The problem is what is physically built on it or the "improvement" as the tax assessors call it are what makes up the greater portion of the property value, the land value matters but the majority of the total property value comes from the value of the properties improvements (buildings).

So that is the connumdrum about these TADs. It temporarily redirects the increase in the tax digest from the new value from the improvements for a fixed time. The funding then goes towards public infrastructure that can make the project happen.

Without it.... many of the improvements don't happen and the property won't be as valuable going forward. You won't get the premium, high-dollar improvements and denser infrastructure.

With it.... the schools might see extra students from the project without extra increase in funding for a temporary period, but once the TAD runs out it will be a large property tax digest increase that will last.

[bu2]

Originally Posted by cwkimbro

The problem is what is physically built on it or the "improvement" as the tax assessors call it are what makes up the greater portion of the property value, the land value matters but the majority of the total property value comes from the value of the properties improvements (buildings).

So that is the connumdrum about these TADs. It temporarily redirects the increase in the tax digest from the new value from the improvements for a fixed time. The funding then goes towards public infrastructure that can make the project happen.

Without it.... many of the improvements don't happen and the property won't be as valuable going forward. You won't get the premium, high-dollar improvements and denser infrastructure.

With it.... the schools might see extra students from the project without extra increase in funding for a temporary period, but once the TAD runs out it will be a large property tax digest increase that will last.

Some 25-30 years from now. So from a time value of money standpoint, it might as well be never.

Its valuable land. Somebody will make something happen with it. Its only going to go up in value, just slower.

[StoicTao]

Originally Posted by bu2

Some 25-30 years from now. So from a time value of money standpoint, it might as well be never.

Its valuable land. Somebody will make something happen with it. Its only going to go up in value, just slower.

Right... Something will get built without the TAD. Like a Fuqua car-centric strip mall. This Superintendent doesn't get the big picture.

[bryantm3]

Originally Posted by StoicTao

Right... Something will get built without the TAD. Like a Fuqua car-centric strip mall. This Superintendent doesn't get the big picture.

well, if the establishment of the TAD means tax dollars get taken away from a school system that's already in trouble, i think the superintendent does get the picture and is acting in the interest of preserving revenue for the schools; the superintendent's job is running the schools, not land development. i mean, i love the GM development site and would be infuriated if they built a strip mall there. but i can't blame the superintendent for making this stand, unless i'm missing a big piece of the picture.

as great as some of the things TADs have funded are, i seriously question their actual ability to improve neighbourhoods; from what we've seen in atlanta so far, we get a lot of great things built in already great neighbourhoods and the low-income neighbourhoods get their tax dollars taken, never to be seen again. i think we need to find another way of doing this.

[jsvh]

Originally Posted by bryantm3

well, if the establishment of the TAD means tax dollars get taken away from a school system that's already in trouble, i think the superintendent does get the picture and is acting in the interest of preserving revenue for the schools; the superintendent's job is running the schools, not land development.

But it doesn't mean they get less taxes. They get the same amount of taxes; and the new taxes from the increase in value at the site go to fund infrastructure improvements at the site.

Since we pay for schools with property taxes, they will be involved with land development one way or another. It makes sense for superintendants to want to ensue a stable revenue stream for the future. Not to mention even I would hope they would also want to work together to make the community they are in better, which benefits schools too.

If you don't want schools involved in land development, how are you proposing we pay for schools?

[wasel]

Originally Posted by StoicTao

Right... Something will get built without the TAD. Like a Fuqua car-centric strip mall. This Superintendent doesn't get the big picture.

Considering that a chunk of the TAD would be for building a road to Peachtree, car centricity is not really solved with this.

This project, like any other project, is speculative. Sure, if it successfully moves forward it would generate plenty of revenue. But nothing is guaranteed.

If your child's school said to you "We are giving up our share of income for the next 20 years so that Acme Development Corporation, a for-profit entity, can use it. Sorry, your kid will have to make do with whatever resources we can scrounge up to educate him. But look at the bright side: in 20 years we will bring in a BUNDLE and will have all sorts of cash to do cool things with!"

Sorry, but no development should be built on the backs of our kids' education. I am willing to forego some other public services to free up money to create a good development, but not school funding.

_____

I have to wonder if part of the capital partners' feet dragging may be due to new Basel III rules recently implemented that put a much, much higher risk weight on HVCRE projects, which this would certainly be one. Their capital reserves will have to be higher, among other things. A lot of banks are slowing the brakes while they figure out what this all means.

Now, why would such stiffer regulation be required if HVCRE/ADC lending were a sure thing?

[jsvh]

Except that would be connecting the development to the Doravilla MARTA station.

Again, you are being misleading about schools giving money to developers. That is not how TADs work.

If you don't want schools involved & profiting from private developments then you need to find another way to fund schools.

It's like Six Flags saying "I am in the business of running theme parks, not setting ticket prices, so I won't support a 10%-off discount to attract more total revenue."