The development, to be built at the corner of Cobb Galleria Parkway and Cumberland Boulevard, was originally designed to consist of a $40 million residential complex — including 236 condos and 14 three-story townhomes — and a 10-story office building with more than 200,000 square feet of space, valued at about $63 million.
An amendment to the original zoning request was filed with the commissioners Feb.10 and approved March 18, according to John Pederson, zoning division manager for the county clerk’s office. The amendment application states the apartment building will now contain a maximum of 322 units and a maximum 12 townhomes, but the office building has been removed. The project is now worth about $60 million, according to Cobb County Board of Commissioners Chairman Tim Lee.
A controversial incentive
When the Riverwalk development was first proposed in September, the developers applied for tax incentives from the county government, including a waiver for permit fees and a property tax abatement. The developers were denied the fee waiver in November by an incentives committee, made up of high-ranking county officials, including County Manager David Hankerson, Director of Transportation Faye DiMassimo and Lee.
The committee said they denied the waiver because of an ordinance requiring applicants to create at least 25 jobs and contribute at least $500,000 to the county’s tax digest to qualify.
However, the Development Authority of Cobb County, which has more leeway when granting incentives, planned to grant the property tax abatement to the developers by issuing bonds to finance the project.
When the bond issuance was set to go to court to be validated, the Cobb Board of Education filed a formal objection, arguing the abatement took away its right to tax properties in the county. The school system would also have been denied millions in property tax revenue.
“Our biggest concern was that our taxing authority would be negated, and we have to protect the district,” school board Chairwoman Angelucci said in January. “That’s our job. We didn’t ask for it, but even still, it’s our job to stand up and protect our rights and our authority, and that was the crux of our objection is that we could not allow for that to be encroached upon in any way. At the end of the day we are absolutely pro-business, we need that, but our job is to protect the district and that’s what we did.”
With the tax abatement, the property would have generated about $3.5 million in property tax revenue for the county school system over the first 10 years, compared to $7.7 million without the abatement.
Although the $60 million version of the development does not include the office building, it will generate about $4.9 million in property tax revenue for the schools over its first 10 years because it will not receive the tax abatement. After year 10, however, the school system will receive about $287,000 less in property tax revenue each year than it would have if the project had proceeded as originally planned — with the office building and the tax abatement.
Before the bonds could be legally issued, however, they had to be approved by a judge. After the bonds were challenged by the Cobb Board of Education, the developers withdrew their application for the abatement.
In March, Williams moved his company, Preferred Apartment Communities, out of Cobb County, where it had been located for 10 years. He told the Atlanta Business Chronicle the move was a direct result of the Riverwalk development being denied the incentives.
“I’m only willing to be kicked in the a-- once,” Williams told the Atlanta Business Chronicle in a March 31 interview.
State Sen. Lindsey Tippins (R-west Cobb), who questioned in December whether the Georgia Constitution the development authority could provide the tax abatement without input from the school board, said Saturday the county must not focus solely on growing the digest and increasing property tax revenue. The tax abatements should be used to bring new jobs to the county, which is the reason for the restrictive ordinance.
“My problem with the entire concept is this: If you think about it, there’s no development that takes place in the county that does not increase the tax digest,” Tippins said.
“I’m won’t say that all incentives are bad. I think there are some projects that are clearly in the best public interest. But I think this particular project, by its own admission, did not create any new jobs. And I think that’s the purpose of incentivizing with tax abatements: creating new jobs,” Sen. Tippins added.
Commissioner Bob Ott, who represents the area, said the project still has several stages to go through before construction begins.
“What happens is, even though (the commissioners) approved the project to go to residential, (the developers) still have to go through plan review,” Ott said. “There’s pre-plan review, which is pre-zoning hearing, and then there’s post-plan review, where they do the more detailed engineering studies.”
Ott said the developers hope to start construction in the middle of August, but he still hasn’t received a final site plan, which he must sign off on before the project can proceed. He plans to meet with the developers this week and hopes to have a final site plan within the next few weeks.
Because the developers are no longer receiving the property tax abatement, Lee said he doesn’t anticipate any further issues with the property. Lee went on to say the property would be subject to the new Cumberland Special Services District II property tax, which will go toward financing the Braves stadium.
Commissioners set the millage rate for the district at 2.7 mills at their meeting Tuesday.