The Los Angeles-based developer reimagining downtown’s “Gulch” of parking lots and railroad tracks as “Centennial Yards” — a multi-billion-dollar, mixed-use Shangri-La — won’t include any affordable housing in its first apartment tower.
But because CIM Group’s glassy luxury residential building will feature 304 exclusively market-rate units, the developer had to pay the city of Atlanta almost $8.5 million for shirking its commitment to make around 60 units affordably priced. The 19-story apartment building is slated to be built and move-in ready by next summer.
The city will use the penalty payment to ready privately owned Westside properties in foreclosure for redevelopment. The aim is to rehab them into housing priced for people earning less than the area median income, thanks to City Council legislation passed last week.
In exchange for roughly $2 billion in tax breaks and incentives, CIM Group struck a deal with the city in 2018 to either set aside 20% of its residential units for affordable housing or pay an “in-lieu fee” for each affordable unit it declined to provide.
The city’s $2 billion giveaway to CIM Group took the form of a 20-year property tax exemption for the Centennial Yards development and an agreement that the developer would get to keep all of its city and state sales taxes for 30 years. At the time, CIM Group projected that it would build 1,000 residential units, with 20% of them (200 units) priced for households making under about $50,000 for 99 years.
In exchange, CIM Group cut the city a $33.5 million check in 2021 to “combat inequity.” The city used $28 million of that to start an affordable housing trust fund.
City leaders approved creating an additional Gulch Housing Trust Fund at an Oct. 7 council meeting “to anticipate and appropriate the payment of in-lieu fees and administrative costs” to the city that CIM Group has paid — and could continue to pay. Once approved by Mayor Andre Dickens, the ordinance will also deposit the first $8,449,000 into the new housing trust.
New life for Westside foreclosures
Councilmembers also last week okayed an ordinance to pay out roughly $1.4 million from that new housing pot to the Metro Atlanta Land Bank, a regional government group that revitalizes dilapidated properties.
The Land Bank plans to spend the money to prepare about 50 Westside properties in foreclosure for redevelopment as affordable housing.
But what does readying those properties for rebirth look like?
“The short version: Some of the properties may have, say, a demolition lien on them. When we go through the foreclosure process, there are all kinds of title issues and ‘hair’ on them that make it impossible to redevelop,” said Joshua Humphries, the mayor’s chief housing advisor.
That means the city has to go through the legal steps to clear the titles and take possession of the privately owned properties. “This gets us through the process and then positions them to be built out.”
Once the foreclosure process wraps up, the Land Bank will own and redevelop the properties, he added.
“The goal here is part of the mayor’s efforts to remediate blight and revitalize neighborhoods,” Humphries said. “Some of those properties are stuck in that [foreclosure] process, and this money will help move that along.”
Troubling precedent
Even though some good may come from CIM Group’s decision not to provide any affordable housing at the Gulch’s first residential building, the company has set a troubling precedent, said Julian Bene, a former Invest Atlanta board member and vocal critic of the controversial Gulch deal.
“It’s amazing that whenever the Gulch boys talk — and talked initially in 2018 — about the apartments they’re building and how 20%, of course, are going to be affordable, they don’t mention they’ll buy out of this with an in-lieu fee,” he told Atlanta Civic Circle in an email.
The latest Centennial Yards blueprints call for more than 2,600 residential units — so 520 units should be priced as affordable, per the tax-break deal with the city.
City Councilmember Matt Westmoreland, who authored the ordinance for the Gulch Housing Trust Fund, acknowledged in an interview that the $8.5 million payment for the first Centennial Yards apartment tower reflects “[the developers] deciding not to build any affordable units.”
Centennial Yards project leaders did not respond to three emailed requests for comment. Last week, however, CIM Group representatives told Urbanize Atlanta that “the commitment to affordable housing remains a priority.”
Despite that commitment, the developer recently revealed that it would be delaying the next residential component at Centennial Yards to build a third new hotel instead.
“My hot take on ‘15 minute cities’ is if you can get to the coffee shop within fifteen minutes, but the barista who makes your drink can’t afford to live closer than a half-hour away, then you live in a theme park.”
Stop trusting these developers with your blind and naive excitement when every project is announced. Atlanta is not building communities or cities, but building a theme park for the rich to live in. Plain and simple.
2billion in tax incentives for 8million. CIM group executive are geniuses and our representatives are I’ll suited to serve.
Once Brian McGowan took over the project, knew people were going to be screwed over. It’s what he does on behalf of his bosses. Look at his past leadership of the Beltine, for example. Affordable housing “remained a priority” while essentially building none and ensuring developers got paid.
Good for them. The tax breaks they would receive in exchange for building deeply affordable units is a one sided deal for the city. Why would a person paying market rate tolerate another person paying pennies on the dollar to live in the same building?
Pouring coffee is a job for teenagers, college students or retired person looking to get out the house. Real skills get high wages. Mediocracy is rampant in our society now just cause you you got a low effort job now you think you deserve to live in the high roller penthouse it doesn’t work like that. People want equality of outcome but not input.
The developer know as soon as the people paying 100.00 a month to live in a 3000 month luxury unit will turn it into a He** hole with the same behavior that keeps them poor. The city knows operating housing is difficult that’s why they want to punt it off to private developers.
The city Atlanta has the land bank and invest Atlanta they could build and develop their own housing units. Having poor people live next to affluent people is not going to somehow generate upward mobility osmosis. I have read the papers on inclusionary zoning and schools.
it’s bunk science. Poverty will always reconcentrate. we all know that poverty is more than just economic. Putting a rotten apple in with a bunch of good apples will do nothing but rot up rest of the apples The great experiment is over that’s why everyone was running to the exurbs now. Bring back public housing let’s get these people somewhere to live and those who can will rise. The rest are content where they’re at we should all be fine with that. If they keep having a random babies with random people fighting, shooting dope and not educating themselves that’s on them.
You’re going to see more developers pay the tax penalty. It’s far cheaper than warehousing a problem. Let the city deal with it they got the money now we’ll see what they can build and do.
“The developer know as soon as the people paying 100.00 a month to live in a 3000 month luxury unit ”
You are clueless.
I work downtown and make $48k I live in affordable housing. My rent is $1,400 a month. There’s also income minimums, income must be 2.5 times the rent.. Your entire comment just screams ignorance. Hopefully you inform yourself on somethings.
Thank you Sean for your comment you your seem like a contributing member of your community and not a rotten apple as you were referred to. Affordable doesn’t equate welfare single mom Roger. Working class people like Marta employees, nurses, teachers, city employees, accountants all type of educated professionals fall into 50,60,70,80% of AMI who are priced out of living in developments like this one without the subsidizes.
There are so many things wrong with your argument, Roger. For starters – “low effort” jobs are still jobs, and in many cases, essential. Your equation ofoutcome/input exposes the worst aspects of our current economic environment.
Second – market rate is not $100 for an apartment; it’s in the $1K+ range. People putting 40 hours a week into minimum(ish) wage jobs still deserve to be able to afford a place to live, food, healthcare, etc. Affordable housing is one way of ensuring this.
The ugliest part of what you lay out here is casting lower-income people as those who will “create a hellhole” and “rot up the apples.” You’re exposing your own ignorance and prejudice here, and that completely undermines everything you have to say.
I agree with Roger. The city does have a land bank and owns hundreds of acres of land. Why don’t they develop it themselves? They’ve got the money to build their own public housing. Why does everything need to be a public-private relationship?
Navin – because that was part of the basis for a $1 billion+ tax credit for the gulch developers.