The proposed Brookhaven/Oglethorpe MARTA mixed-use development has taken a lot of heat from many community members opposed to high-density development near residential neighborhoods. But now some City Council members are also jumping into the fray, pushing back on MARTA’s desire for tax incentives from the city’s Development Authority to help cover the costs of the multi-million dollar project.
City Council deferred voting on the MARTA rezoning request until January for the mixed-use development that includes apartments, a hotel, an office building, retail stores and a small public park. One reason given was the desire for more information on what kind of tax incentives MARTA wanted from the city.
“I know tax abatements are not part of zoning, but it is a factor in my decision,” Councilmember Bates Mattison said in an interview. “What are the incentives? What are the public benefits?”
MARTA has not hidden the fact it is seeking a tax abatement from the city to fund the project, but they argue a rezoning request should not hinge on the council’s concerns about tax abatements.
Amanda Rhein, Senior Director of Transit Oriented Development and Real Estate at MARTA, said “it was a little bit of a surprise” when the issue and concerns of tax abatements for the project were brought up at the council’s Oct. 25 meeting.
“We have been told by the city they wanted to do [the rezoning and tax abatements] separately,” she said. “You do have to check the box for the rezoning application that you will be seeking an abatement, but that process is not in full swing until after the rezoning is approved.”
Rhein said public benefits from the project include traffic improvements to the congested area around Peachtree Road, Dresden Drive and North Druid Hills Road. Residents have balked at this argument, saying the development will only add more traffic to the area and increase traffic through the nearby neighborhoods.
Councilmember Joe Gebbia has been vocal in his opposition to the tax abatements by MARTA. He says they will amount to some $26 million – especially if the public benefit included in the abatement includes the planned $8.4 million parking lot for the mixed-use development.
“I’m not opposed to looking at an abatement, but I’m not supporting issuing $26 million in tax incentives for a parking lot,” he said in an interview.
Gebbia said Class A office space that could be provided by the proposed office building in the MARTA development is definitely in the public interest.
But Gebbia warns that not including DeKalb County and the DeKalb School Board in discussions about the proposed tax abatements is not conducive to good governance. When cities provide tax incentives to businesses, the deals typically include property taxes savings over many years – money that does not go to the county or the school board.
DeKalb County Commissioner Jeff Rader was angered when Brookhaven offered a $36 million tax abatement to the Atlanta Hawks earlier this year to secure a state-of-the-art practice facility in Executive Park, leaving the county and school district without property taxes for 15 years. The Hawks partnered with Emory Healthcare on the project to bring a 90,000-square-foot practice and medical facility to Brookhaven.
That deal, in part, led Rader and the DeKalb Commission to pass a resolution demanding more communication and warning when cities decide to give tax breaks to companies.
“Cities need to be sensitive to the county,” Gebbia said, acknowledging his concern about the proposed tax abatements for the MARTA development are a direct result of the issues raised by Rader.
“All parties have to sit down. I want Brookhaven to be the entity to bring them together,” he said. “The school board needs to consider this action, but they have to be at the table. We want to work in concert, not in competition.”
Gebbia said the Atlanta Hawks deal was “unique” for Brookhaven and promised jobs for the city, a definite economic benefit.
Mattison agreed, saying “the Hawks deal was about creating economic development and the number of jobs created by having the Emory Sports Medicine Complex” located in the city.
“I don’t want to battle with DeKalb schools and DeKalb County,” he said. “I want us to avoid hurt feelings.”
Rhein declined to talk specifics about what the tax incentives would provide to residents. “It’s premature to comment on what the incentives would provide,” she said.
She has said in the past that the property where the development is proposed is now a mostly-empty parking lot. By adding commercial and residential development to the site, the city’s tax base would grow through sales and property taxes, providing an economic benefit.
“We’re meeting with the city and the Development Authority over the next couple of months to discuss the incentives,” she said.
Rhein also added that the rezoning for the development needs to be approved by January, if the project is to move forward.
“Our development team is still moving forward. We continue to work with the city to address concerns,” she said. “But it is really important to get the rezoning approved in January, at the latest. The development team is far out on a limb with expenses.”
Some questions about the project, she said, simply cannot be answered until rezoning is approved. “We feel we have done everything needed for due diligence,” she said.
Gebbia, however, said he is not convinced.
“I think if we’re transparent it will help our citizens and residents … if we understand what the deal is,” he said. “The biggest angst we face is we don’t have a formal ask brought before the council. No, this is not a zoning discussion. But it is about what the development is to be.”
The MARTA project will not move ahead with tax incentives. If Brookhaven officials are not able to prevent MARTA’s demand for tax incentives then its citizens will use the court system to prevent their misuse.
The use of TADs and TODs are necessarily limited in scope and the MARTA project does not qualify for this incentive and the courts will support this position.
Amanda Rhein of MARTA, says “it was a bit of a surprise” when the issue came up – likewise, the members of the CRB were surprised: Despite the many meetings between CRB, the developers, and MARTA, the issue of tax incentives never came up.
MARTA apparently believes incentives like this are accepted blindly but the economic argument fails for this project.
And with respect to the Hawks deal: If Brookhaven had not provided the incentive in that case it would not have had the opportunity to have this high-profile collaboration with the Hawks and Emory. A number of other municipalities were interested and would have provided the incentive; the project would easily have moved.
The same is not true of the MARTA project. Not only is Brookhaven very divided on the value of the project to its citizenry, but MARTA does not have the option of “shopping” the project around and placing it in a city more amenable to tax breaks.
Brookhaven has a very desirable location at the MARTA station and has every reason to insist that not only is the project done properly – with due consideration of the impact on the community – but to also insist that zero incentives are provided.
Given the growing interest in the area we do not need to (and will not) incentivize any development whatsoever. We have denied and scaled-down a number of development proposals in the past year alone; there is NO legal justification for development incentives in that area.