A coalition of opponents to the Gulch redevelopment organized under the name “Redlight the Gulch” have refuted the terms outlined in a new deal made by the city with the development group.
The coalition refuted Mayor Keisha Lance Bottoms’ administration’s statement that the public cost of the proposed deal has dropped to just $40 million.
“If that were true, the Redlight the Gulch Coalition would drop its opposition to the deal,” spokesman Julien Bene, a former member of Invest Atlanta who has publicly opposed the deal, said in a statement. “The truth is entirely different. This new scheme still diverts $1.08 billion of property taxes to the Gulch, along with $500 million in sales taxes, in 2018 dollars. The public cost is 40 times higher than reported yesterday. Not mentioned in the mayor’s statement: funds to the neighborhoods would drop from $125 million to $8 million.”
The full statement is below:
STATEMENT FROM “REDLIGHT THE GULCH COALITION”
ON MAYOR’S REVISED GULCH TERMS
Media reports on yesterday’s rewrite of “The Gulch Deal” wrongly state the public cost has dropped to $40 million.[1] If that were true, the Redlight the Gulch Coalition would drop its opposition to the deal. At that point, its drain on public resources would not be worth the city’s protracted debate.
The truth is entirely different. This new scheme still diverts $1.08 billion of property taxes to the Gulch, along with $500m in sales taxes, in 2018 dollars. The public cost is 40 times higher than reported yesterday.
Not mentioned in the mayor’s statement: funds to the neighborhoods would drop from $125m to $8m.
The independent review we released yesterday made it clear that the Gulch scheme’s public cost is vastly higher than justified by any benefit.
The deal is simply not in the interest of city residents, communities and taxpayers.
That remains true under the revised deal regardless of how the Mayor’s office attempts to disguise what this would cost residents.
We call on the City Council to reject this shady deal and guide the city back to doing the public’s business in the public’s interest.
We still can’t trust this deal!
NOTE ON THE TAXES DIVERTED TO THE GULCH UNDER THE REVISED PLAN
Property Tax
CIM’s proposed $5b development, on their own schedule of square footage as shown in the Revenue Report by Municap, would generate taxes of $1.08b through 2032 (schedule below).
The revised terms of the deal purport to cap the amount of this that CIM could tap at $665m.
However, the full $1.08b would still be diverted into the Gulch tax allocation district (TAD), where it could be used for developer subsidies. That $1.08b would not be available to pay for public services like schools, teachers, and police.
Sales tax
The sales tax diversion is unchanged in the revised proposal, calling for up to $1.25b in sales tax-backed bonds to finance CIM’s development.
Municap’s projection of retail sales in the Gulch shows this bond amount to be unrealistically high. Municap show sales tax revenues of $660m over the 30 year exemption. This $660m of course comes nowhere near supporting $1.25b in bonds, which, if issued, would leave the city in default.
Removing Municap’s price inflation from the $660m produces roughly $500m in 2018 dollars.
