A major local developer’s request for a nearly $2.2 million tax break for a Buckhead Village tower got a rare rejection from a county authority Dec. 3 amid citywide debate about such incentives in hot real estate markets.
The request for the 359 East Paces Ferry Road project came from the Loudermilk Companies, the historic firm credited with starting Buckhead’s highrise boom in the 1960s and whose family patriarch, Charlie Loudermilk, is honored with a statue in a customized namesake park nearby. The Development Authority of Fulton County board’s rejection of the request came on the same day it approved a half-dozen others across the county.
“This is the first time ever that anyone can recall DAFC’s board turning down a tax abatement, so it’s a big deal,” said Julian Bene, a prominent critic of tax breaks and other incentives.
Bene noted the rejection came amid debate over $1.5 billion in public financing and incentives for redevelopment of the Gulch downtown, and shortly after developer’s withdrawal of a request to another authority, Invest Atlanta, for a controversial $22.5 million tax break for a project along the Atlanta BeltLine.
“The public is more aware now that developer welfare comes at a high cost to residents,” said Bene. “We now have elected officials and members of key boards who will not rubber-stamp breaks for luxury projects in hot markets that will happen regardless. Progress at last!”
“I don’t want to comment on that,” said Charlie Loudermilk III, the Loudermilk Companies’ director of development and investments. “There’s a lot of scrutiny going on right now with the program, so I don’t think that would be wise to comment on.”
However, another employee said briefly that the company would reapply for the incentive.
Tax incentives and abatements have long been criticized by some local leaders, such as Buckhead resident and Fulton County Commissioner Lee Morris. But the deal for the Gulch, which CIM Group intends to remake into a massive mixed-use site called Centennial Yards, thrust the issue into the spotlight last year. A group of activists called Redlight the Gulch, of which Bene is a member, sued to challenge the legality of the deal in a case that has an appeal pending. And Atlanta Public Schools Superintendent Meria Carstarphen became a prominent critic of existing deals, saying that reform is needed to stop cutting the school district out of revenue and shifting tax burdens to homeowners.
Carstarphen – who once briefly served as a Fulton Development Authority board member — has repeatedly brought her concerns to the meetings of local community groups, including the Buckhead Council of Neighborhoods, the Northwest Community Alliance and North Atlanta Parents for Public Schools. Carstarphen’s advocacy led the BCN to form a resident “tax force” to study and recommend tax incentive and assessment reforms.
Tom Tidwell, a former BCN chair who once hosted Carstarphen as a speaker on the tax incentive issue, is now a Fulton Development Authority board member. Earlier this year, he was in the minority voting against another controversial tax break for a luxury apartment project at 99 West Paces Ferry Road. In a letter to fellow board members at that time, Tidwell wrote that “Buckhead, Midtown and areas near the Beltline are the hottest real estate markets in the county, probably in the state. I am pretty sure we do not need to ‘stimulate’ economic development in those areas.”
Tidwell declined to comment about the 359 East Paces Ferry vote.
That site is currently a temporary parking lot where Loudermilk Companies tore down an office building. In its place, the company proposes a 12-story office-and-retail tower. According to Development Authority documents, it has an “economic impact” estimate at roughly $1.5 billion and would “create” 850 permanent office jobs and 50 permanent retail jobs, along with 100 temporary construction jobs.
In a standard deal, the company asked the Development Authority to issue $45 million in bonds for the project – meaning the authority would technically hold title to the property for 10 years in exchange for funding it. The benefit to the company is an estimated $2,180,473 in property tax savings over that period. The company would take ownership again afterward and go back to paying full taxes.