The controversial Dresden Village mixed-used development that won approval for a property tax break worth up to $13.5 million has strained the city’s relationship with DeKalb County, causing a stall in the city’s federal COVID-19 relief funds and drawing criticism from a county commissioner who says it’s an unnecessary drain on county and school system coffers.
Granted under the code name “Project X,” the tax break is drawing criticism from a DeKalb County commissioner as an unnecessary drain on county and school system coffers.
The Brookhaven Development Authority approved the 22-year tax abatement during a special called Aug. 12 meeting. The development is valued at about $61 million, according to the development’s project documents.
Dresden Village is planned for a 4-acre lot on Dresden Drive near Caldwell Road, a site currently occupied by a DeKalb County Tax Commissioner Office and Dixie Q, a barbecue restaurant owned by Brookhaven chef Scott Serpas. The development spurred a 2018 lawsuit from a neighboring resident regarding possible zoning violations, which was settled with the developer. At the time, critics said more development in the area will create more traffic.
The development, by Connolly Investment & Development and Gables Residential, will include 183 multifamily units, seven luxury townhomes and 29,000 square feet of retail and restaurants, according to a summary of the project. Dixie Moon, a standalone restaurant operated by Serpas, will also be included in the development. The development is expected to create about 160 permanent jobs and bring in $1.4 million annually in sales tax, according to the project’s economic impact report.
The developers did not ask for a tax abatement in previous versions of the proposal. Timothy “J.R.” Connolly, CEO of Connolly, said the increased scope of the project with streetscape and traffic changes are what caused the company to request a tax abatement now.
The tax abatement helps the developers create a quality project and not cut corners, said Shirlynn Brownell, the city’s director of economic development.
“We were excited to see the innovation and development that they were proposing for the community,” Brownell said.
Because of the tax abatement, DeKalb County Commissioner Jeff Rader said he deferred an Aug. 25 vote on an agreement to allocate $6.3 million of federal Coronavirus Aid, Relief, and Economic Security Act funds the city until Sept. 8 to “see if any of those funds could offset the losses that Brookhaven has visited on DeKalb,” Rader said.
Agreements for the county to allocate CARES Act funds to its other cities were deferred until Aug. 27.
Rader, whose district includes part of Brookhaven, says the use of the “Project X” codename — a tactic usually used when cities or states are competing for confidential developments — shows the city knew the abatement is unnecessary and controversial.
“It wasn’t really any secret that the project was going to be located there,” Rader said. “But the secret, apparently, is the tax abatement.”
City spokesperson Burke Brennan said no further land use or zoning variance approvals are required for the development from the city.
The deal will now be reviewed by the DeKalb County Superior Court in a validation hearing scheduled for Sept. 8, according to Brownell. A notice of the hearing will appear in a legal notice in the Champion, a DeKalb County newspaper that serves as the county’s legal organ.
Project changes
The project, differing in specific details, has been on the city’s radar since 2016 when it included 194 apartments and 20,000 square feet of apartment space. In 2018, the project included 169 multifamily units and more than 20,000 square feet of retail and restaurant space.
That year, a Caldwell Road resident sued the city and developer to try and stop the city from rezoning the development area. The resident settled with the city after the City Council amended its zoning ordinance to include conditions and variance approved by DeKalb County before the city was incorporated.
Connolly said the development did not need to make any changes after the lawsuit was dropped. Construction was previously expected to start in the fall of 2018. Connolly said there wasn’t any specific cause for the delay.
The development includes 180 public parking spaces, the same amount since 2016, and aims to help some of the parking problem along Dresden Drive.
The development will also include a trail connecting Caldwell Road to Parkside Drive so Ashford Park residents can have walkable access to Dresden Drive and the MARTA station, according to project documents. Developers also plan to take out the double traffic signals on Dresden Drive as a way to improve traffic flow in the area.
Abatement debate
The developers must move the DeKalb tax office now located at 1358 Dresden Drive to a new location and will not receive tax breaks on that part of the property, which is about a quarter of the 4 acres, according to project documents. The abatement is based on the value of the rest of the development, which was calculated as $42.2 million.
Under that abatement, the city is expected to lose about $733,000 in property tax revenue, according to the development authority’s fiscal analysis. DeKalb County government would lose $2.9 million and DeKalb County School District would lose about $4.95 million.
Rader said the developer’s pitches to make traffic adjustments and pedestrian infrastructure changes really just benefit the city. Granting an abatement for the project harms the county and school district, he said.
“These are all perhaps valid projects when they are appropriately funded through Brookhaven tax revenues,” Rader said.
The city gets the least amount of property tax revenue compared to the county and the school district. Rader said that means the city is losing the least amount of money from the abatement, and the streetscape improvements make up for its loss of revenue.
Rader said the north DeKalb cities tend to offer tax abatements to developers. He said he’s working with the Association of County Commissioners to change the state law that allows cities to make tax abatement deals like that of Dresden Village.