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5 Comments

  1. 1

    Redevelopment Powers 101

    Doomed.

    “Invest in” = DeKalb Co. School Board and DeKalb Co. issue bonds totaling around $800M.
    Annually Debt Service at 4% for 25 years = $4.22M/year
    Any missed payments by “Assembly” comes from DC General Fund or the School Board’s.

    Has the City of Atlanta paid the $20M to the School Board because the tangential property taxes hasn’t appeared from the Belt Line? Nope. Anyone see developers building speculative commercial RE ala’ 2008? Nope. It was a non-starter at Brookhaven MARTA. They were forced into adding 20,000 sf. to the “renderings”. Remember what Buckhead looked like from 2008-2013? That was speculative commercial RE construction. In that scenario banks went under. Doraville and Decide DeKalb are the bank this time.

    High Yield corporate bonds are taking it in the shorts right now because Dodd Frank doesn’t allow large financial institutions to step in with liquidity. Same for High Yield Muni bonds (revenue bonds) which are the finance mechanism for Tax Allocation Districts. The only buyers are asset managers. You know them as high yield muni bond mutual funds. They are a very small slice of liquidity that used to be provided by large financial institutions. The multi family apartment complex boom will cycle downward as cycles always do. Remember, these are 25 year bonds. Oh sure, all the bonds will get bought now because new supply is so limited, but they’ll be radioactive in 10 years as debt service (rent payments) doesn’t appear.

    When the mortgage payment has to be made and the rents aren’t occurring…ruh roh. Chamblee can step in to pick up the Doraville pieces. Hell, maybe Fulton Co. annexes DeKalb Co. in the most extreme case. 2034 is when over $750m of DeKalb County bonds mature….not including the $800M about to be issued. That’s 18 years away. Interest rates will be much higher and the “scoop and toss” method of refinancing will be long gone by then. DeKalb Co. bankruptcy goes into hyper drive around 2028 or sooner.

    The Milton Co. dreams of North Metro cities become reality as we gladly recede from the s#$% show.

    That’s how big this is. These are the kinds of mistakes that create mass market transformations. All because 7-10 people have outsized egos, want to utilize their power for monetary gain and the future is someone else’s to figure out.

  2. 2

    enuff govt already

    This is nuts! The legislature give Doraville, a basically bankrupt city all the commercial land around it so it looks better but it’s not enough to get this deal done. Along comes DeKalb to put the rest of the county’s residents on the hook for the city of Doraville. This is not the utopian site that will be are being told. No one will be buying condos overlooking the interstate and the city is not biz friendly. The best use of this land is for the car dealerships on PIB to move there and gain the much needed interstate exposure. A unanimous vote by the commission obligating the rest of DeKalb to this boondoggle.

  3. 3

    RAJ

    A few problems: NO private investment in this project – financed by a no money down $26M loan from the Bank of the Ozarks that expires at the end of 2017. Interest rate unknown. If you don’t have a paying tenant at the inception of the TAD then you have NO increase in property value with which to pay the quarterly interest on the junk bonds issued by the city of Doraville to build the infrastructure. If the bonds come close to default the County taxpayer picks up the tab from the County general fund as the project has become “to big to fail”. Next: the City of Doraville(10,000 people)is too small to provide services to this 165 acre site for the 25 year duration of the TAD so the County taxpayers are on the hook for most of the cost of services to the site for 25 years. Lastly: The Agreement(IGA)between the County and Doraville gives Doraville majority vote on the Board and thus TOTAL control of the TAD. By the by….who pays to educate the 5,000 kids living on the site for 25 years if the DCCS gives up all property taxes.

  4. 4

    Toff

    Very well said and unfortunately, accurate.

    Dekalb has no business here. It should be at arms length.

  5. 5

    Jon

    So far, they are building 2 big car dealerships within the TAD. Not a boost of confidence that this is going to be the mixed-used transit utopia they are making it out to be. Thumbs down and the schools should have no part in this. If it’s so desirable, a private company will develop this without tax payer assistance.

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