Doraville, GA, July 16, 2015 – by Holland James for The Post – Questions from a City Councilwoman at a Doraville public hearing last week about a proposed Tax Allocation District (TAD) (see video here) yielded the name of the newest property owner at the former General Motors site.
A subsidiary of Duluth-based Asbury Automotive, Inc. has purchased 20 acres for $19 million from Integral Group, LLC—master developer of the recently named “Assembly, Doraville, USA” project. This purchase brings the total announced project acreage to 32 of the 169-acre site.
According to US Securities Exchange Commission records, “as of June 30, 2015, (Asbury) operated 86 dealership locations, including 106 franchises for the sale and servicing of 29 brands of new vehicles, as well as operated 26 collision repair centers and 3 stand-alone used vehicle stores.”
Egbert Perry, Chairman & Chief Executive Officer of Integral, confirmed the sale and future car dealership when questioned by Doraville Councilwoman Trudy Jones Dean. Dean expressed concern over a lack of control of future land uses on the “Assembly” site. Until this information was disclosed during the Council Meeting, no public announcement had previously been made.
Perry was on hand to help explain how the “Assembly” project would connect to the rest of a $265 million Tax Allocation District (TAD), the subject of the public hearing. The developer was quick to add that the car dealership will represent $47 million in property value increase – an immediate increase in the TAD’s $350 million tax base (on route to a projected $1.9 billion).
Tax Allocation Districts are areas where redevelopment projects can receive public infrastructure improvements by spending proceeds from a form of municipal bonds. The specialized bonds are paid back from sequestered tax revenue called an “increment” from increased property values within the TAD. TADs are traditionally blighted areas, but have been expanded to areas that can be considered “undervalued” or even deemed “underutilized”.
At another point in the meeting, Dean challenged TAD consultant Kenneth Bleakly, Founder and President of Bleakly Advisory Group, with twenty minutes of questions about the proposed 297-acre TAD that would now only partly include the 169-acre “Assembly” project. Areas at the “city center” across MARTA’s and Norfolk Southern’s railway and along Buford Highway to Shallowford Road, render the “district” nearly doubled.
Bleakly explained that this is a “classic use of the TAD”, invoking Atlantic Station as similarly developed contaminated land. The Councilwoman reminded Bleakly that Buford Highway is not the same as the former GM site in that respect, questioning many times why the two areas are within the same TAD.
In a subsequent phone call, Dean elaborated on her concerns over future uses of the GM property that will render the project a “far cry” from oft-repeated analogies to Atlantic Station. While providing The Post with a detailed history of the zoning effort for the “Assembly” site, Dean said in March the City Council ceded nearly half of the “Assembly” project to possible warehouse and wholesale distribution use.
Regarding the proposed TAD, Dean asked Bleakly whether a similar lack of definition would hamper controls over spending bond funds. The financial consultant pointed to the plan to assign bonds in packages, adding to financial control and that bonds can only be sold if real projects are ready to be built. The first bond is planned to be $43 million.
Redevelopment of the GM site has a checkered history after the plant closure earlier this decade. Proposals were called for by GM initially with the corporation holding out for a purported $50 million sale price, considered by many in Atlanta as unreasonable, given its condition.
Four developers responded in 2009 with all but one dropping out voluntarily. In 2010, a deal with New Broad Street Company out of Orlando fell through when DeKalb County Commissioners refused to finance the property purchase for the developer. That deal was derailed when a kickback scheme by one Commissioner and problems within the Development Authority became known.
The new project is being led by the City of Doraville, but requires 80 percent participation from DeKalb and the DeKalb School System. DeKalb has not announced any direct bond contributions this time around, but will be asked soon after Doraville approves a resolution to form the district and have the flexibility to issue bonds. Bonds are planned to be issued incrementally with the first being $43 million in 2016. City Manager Shawn Gillen has said that the TAD will not be pursued without the considerable County Government and School System participation.
Doraville City Council will decide whether or not to pursue the TAD on July 20 in open session.