Office of the Mayor - May 7, 2015
City Will Use New Tax Revenue to Finance Parking Deck for New $96 Million Mixed-Use Project
In keeping with a previous commitment, the city will pay for a 1,000-space public parking deck as part of a proposed $96 million mixed-use development adjacent to BB&T Ballpark. The city’s ability to pay for the deck is possible because a community investor group, Brookstown Development Partners, has agreed to give up a portion of an incentive payment to which it is entitled. This ensures that the project can be built without any taxpayer funds.
The city will use new tax revenue generated by the mixed-use development to pay the debt service on the new parking deck. However, under a 2008 incentive agreement, the city had agreed to provide Brookstown Development Partners with 100 percent of tax revenue generated by development of land adjacent to the ballpark.
The 2008 agreement was a condition to Brookstown Partners’ investment in the baseball stadium. Their investment was motivated primarily by a desire to see this important community project completed rather than for financial gain. The partners hoped to recoup their investment from tax revenue generated by new development that was planned for land adjacent to the stadium.
Brand Properties Real Estate Development Co. of Atlanta has proposed developing a mixed-use project of approximately 300,000 square feet of retail, 110,000 square feet of office space, 250 hotel rooms and 580 residential units. Phase one of this project will total a minimum of $96 million in new investment. Phase two would be an additional $90 million.
In order for the project to proceed, a parking deck with 1,000 spaces is needed. The city has been committed in principle to providing a parking deck for new development around the ballpark as far back as the original ballpark development agreement in 2005, provided that sufficient new tax revenue was generated to cover the debt service on the deck.
With 100 percent of the new tax revenue on development adjacent to the ballpark obligated to Brookstown Partners, there would not be sufficient revenue for the city to pay debt service on the public parking deck needed for the Brand Development project to go forward. However, Brookstown Partners has agreed to subordinate its rights to the city so that the city may use as much of the new tax revenue as needed to pay the debt service.
Under the proposed arrangement, Brand Development will guarantee the construction of the parking deck for a price not to exceed $16 million. The city would buy the parking deck only if there is at least $80 million of additional private development on the site. Under this arrangement, the city is able to guarantee that the private development is in place and that it will generate the necessary tax revenue to retire the debt on the parking deck before it actually purchases the deck from the developer.
The $80 million in new development plus the $29 million investment by Link Apartments Brookstown will generate about $1.3 million in annual property tax revenues to the city and county combined. This amount is projected to be sufficient to cover the debt service payments on the deck.
The city’s participation is contingent on the new private development being in place and on reaching an agreement with Forsyth County to participate in the project.