Mayor Bottoms and developer CIM Group want to get quick approval from Atlanta City Council so the public can help pay for the project to develop the Gulch, through massive local incentives totaling $1.75 billion. This process needs to be slowed down so that we know what we’re getting into, and what the value is for Atlantans.
With this staggering level of incentives, the developer can fill up the Gulch with offices, hotel, apartments, Dave & Busters, Rainforest Cafe, etc., and reap rewards through leases, while putting less of their own ‘skin in the game’ — and in the process, provide almost no revenue to public schools, parks, or libraries because of the tax incentives.
Please understand: this isn’t about whether or not development in the Gulch happens; it’s about how it happens!
These concerns are not an effort to prevent something from happening in this disused property in the heart of the city. Everyone wants to see the Gulch developed, just not by giving away tons of incentives and expecting very little in return.
CIM Group is potentially getting up to $1.25 billion in sales tax revenue and up to $500 million in property tax (TAD) revenue. Those sales tax rewards might look like a bigger deal than the TAD dollars, but it sure is a sweet deal for developer to not pay property taxes for 30 years.
Slow down to ask more questions
Thankfully, some members of our City Council can see through this. They’ve been asking good questions and not caving in to pressure from Atlanta Mayor Keisha Lance Bottoms. At a City Council committee meeting on September 11, 2018, Atlanta Mayor Keisha Lance Bottoms made an unscheduled appearance to pressure Councilmembers to recommend public subsidies for CIM Group’s proposal to develop the Gulch.
She called out each Councilmember on the committee to remind them of things she’s done for them. It was troubling to watch (see the clip below). Was she saying that she’d done those things as political favors or for the good of the city? We’re thankful to Councilmembers Natalyn Mosby Archibong, Joyce Sheperd, Dustin Hillis, Amir Farokhi and Matt Westmoreland for deciding to send the matter to a work session instead of recommend approval as Bottoms was pressuring them to do.
A few days after this, at the work session on the Gulch, Westmoreland asked how the $1.75 billion in financing and the $54 million in “public purpose initiatives” were arrived at. The response: the first is how much CIM Group asked for and the second is how much CIM offered. So much for negotiation! We’re giving them exactly what they asked for. We need to ask more questions like this.
The recession example: schools can get hit hard with TADs
Also at the work session, Councilmember Amir Farokhi rightly mentioned the danger of an economic recession and its effect on tax incentives, and thus the public schools that benefit from property taxes.
If a downturn comes, it hits schools hard. That’s how we got in trouble with the BeltLine TAD.
Because they get money for operations through property taxes, Atlanta Public Schools (APS) really suffer with TADs, particularly when they incentivize a lot of new development that can bring in families without a penny to pay for teachers. There was an agreement with the BeltLine TAD that the City would make PILOT (payment in lieu of taxes) payments so APS wouldn’t suffer so much.
Then the recession arrived. During those years, not as much development happened so there wasn’t much money to feed into the PILOTs. In 2016, the City and APS eventually settled on a new, lower number, providing less money to schools.
CIM Group is not a company we can afford to make a quick decision about
In 2017, CIM Group got called out for being tied in with Trump and Kushner in NYC.
“Over the years, documents show, CIM has done at least seven real estate deals that have benefited Trump and the people around him, including Kushner. Those deals included stabilizing the scandal-plagued Trump SoHo hotel, a key Manhattan holding for Trump and his children Ivanka, Eric, and Donald Jr..”
- Trump and Kushner’s Little-Known Business Partner (WYNC, 2017)
In 2016, CIM Group was called out for spending millions of dollars to sway politicians in L.A.
“Perhaps more than most developers, CIM Group, an outfit that’s widely known for its aggressive, ‘shock-and-awe’ tactics to complete deals, knows how to get results at L.A. City Hall. Take, for example, the time that City Council members unanimously approved a $30-million loan for CIM Group in 2009, even though it was strongly opposed by City Hall watchdogs and the Los Angeles Times’ editorial board.”
- City Hall For Sale: CIM Group Spent $2.6 Million to Woo LA Pols and Bureaucrats (PreserveLA.org, 2016)
In 2014, L.A.’s Neighborhood News called out CIM Group for several offenses, dubbing them CIM-Zilla
“CIM, a national development company, collects millions of dollars in loans from the city for their projects, they often ignore the concerns of neighborhoods they come stomping into, as well as the pleas from city agencies to adhere to the law.”
- CIM-zilla how does a one billion dollar real estate developer take control of city council building and safety and your community? (Neighborhood News Online, 2014)
In 2009, CIM Group was called out for not delivering on promises after using big public incentives in L.A.
“CIM developed much of the Third Street Promenade…it now owns the long-disappointing Hollywood & Highland shopping center, which houses the Kodak Theatre. Despite endless assurances by City Councilman Eric Garcetti and his predecessor, Jackie Goldberg, the development has soaked up vast sums of public money and enjoys a key location at a crossroads for global tourism, yet has never delivered as promised to taxpayers.”
- CIM Group: Hollywood’s Richest Slumlord (L.A. Weekly, 2009)
Call to Action!
Contact city council TODAY and let them know we need to slow this down. There’s a potential vote to approve this deal on Monday, September 17, 2018.
THANKS to everyone who contacted City Council about the need to slow down the Gulch deal and make sure we get this right.
SUCCESS! It has in fact been slowed down. The expected call for a vote on 9/17/2018 has been cancelled.
