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Development Authority approves $15 million tax break for mixed-use project opposed by school board

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Development Authority approves $15 million tax break for mixed-use project opposed by school board

Related Group is planning a mixed-use development, Manor Druid Hills, at 2601 Briarcliff Road. Photo courtesy of Related Group.
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DeKalb County, GA — The Decide DeKalb Development Authority board, at its June 8 meeting, approved a tax break of $15 million for the Manor Druid Hills project.

The board did so over objections from the DeKalb County School Board and a county commissioner, who said the tax break was not necessary for the property to be developed. The project will be located along Briarcliff Road near the intersection with North Druid Hills Road.

The board approved the final bond resolution for the project on Thursday afternoon. The Decide DeKalb Development Authority board approved property tax incentives for the development in October 2022, according to Urbanize Atlanta.

Manor Druid Hills is a project by The Related Group. The $180-million, mixed-use project will feature 381 multifamily units, a 140-key hotel, and 55,000 square feet of office space. The project was initially proposed in 2019.

“The hotel is designed to serve the families that will have kids at [Children’s Healthcare of Atlanta],” said Tom Harrold with Miller & Martin, an attorney representing The Related Group. “The medical building, 55,00 square feet, will be for technicians, labs, doctors, and that increases the employment and raises [salaries] up to the $100,000 level with 270 jobs and a $180 million investment.”

About 20% of the units will be reserved at affordable rates, Urbanize Atlanta reported.

“The fiscal impact for this project over 10 years is approximately $9.759 million. The project will have units at 60%, 80% and 120% of [area median income] affordable to those AMIs and a 30% cap on the rent, 30% of the income,” said Sunny Anderson, senior business attraction manager for Decide DeKalb.

The developer has agreed to make four payments in lieu of taxes that would total $2 million over four years.

Manor Druid Hills will be located across seven acres at 2601 Briarcliff Road. Manor Druid Hills will replace the Briarcliff Station shopping center, the Tin Roof Cantina buildings, a car wash and a vacant oil-change business, Urbanize Atlanta reported.

Target operates beside the project site. Another luxury apartment development, the Bryn House, is currently under construction on the other side of Target on North Druid Hills Road. This mixed-use project will be a five-story, 337-unit residential building that will include about 575,000 buildable square feet with a parking deck and ground-floor retail.

“The project is seeking a property tax incentive to offset the costs of this project,” the meeting presentation stated. “The legal structure for this incentive is a taxable lease purchase bond, and the $15 million incentive value is based on the Authority’s Policy Guidelines for property tax incentives to encourage economic development. The bond inducement was approved by the board on Oct. 13, 2022.”

The bond resolution passed with a 5-1 vote after board member Andrew Greenberg made a motion to table the item to address the concerns of the DeKalb County School District and the DeKalb Board of Commissioners. Greenberg cast the opposing vote.

While the Decide DeKalb board didn’t allow public comment during the meeting, DeKalb Commissioner Michelle Long Spears was able to share some comments. Commissioner Ted Terry is also opposed to the tax break.

Long Spears said that the proposed abatement, or tax break, for the project undermines the spirit of abatements as an economic development tool and doesn’t meet the “but for” test, which looks at if a development had not occurred but for the tax break.

“This economic development tool is intended for struggling areas that require investment to thrive and proper, or strong market areas that provide adequate public returns such as substantial reductions of rents for affordability,” Long Spears said.

She also noted that most of the $15 million would be abated from the DeKalb County School District, and the remainder would be diverted from other infrastructure needs in the area like sidewalks, roads, trails, parks, and stormwater issues.

“This area is exploding, and infrastructure demands are rapidly increasing. The [tax allocation district] would be expected to help support these critical improvements, but this proposal directly reduces the TAD’s ability to do so,” Long Spears said. “There are two similar projects within a mile of this project, driven by the same demand, that are going forward without tax abatement – demonstrating that the incentive is not necessary to stimulate development responsive to the tax-exempt hospital currently nearing completion.”

The DeKalb County School Board urged the Decide DeKalb Board to reconsider the tax break. The school board did not support the abatement for Manor Druid Hills.

“We acknowledge that this proposed arrangement offers specific benefits to the DeKalb County School District,” DeKalb School Board Chair Diijon DaCosta said in a letter addressed to Decide DeKalb. “However, our primary concern stems from the fact that the property in question is located in an area of the County experiencing significant development. The presence of the Children’s Healthcare Facility and the Emory developments alone is reshaping the landscape of that area. Consequently, we question the justification of utilizing public tax dollars to support a private developer in an area that seemingly does not necessitate such financial assistance. Moreover, we have found the Developer’s justifications for a tax abatement on this Project to be insufficient.”

He added that the school district feels that the developer can fund and execute the project through conventional means.

“While the Developer has proposed specific public improvements in the area, we remain unconvinced that they are substantial enough to warrant a tax abatement,” DaCosta said. “In essence, the DeKalb County School District considers the North Druid Hills corridor to be a thriving area that does not require a tax incentive for the development of this proposed mixed-use Project. Thus far, we have not been presented with compelling evidence that a tax abatement is vital for the realization of the Developer’s proposed development on the property.”

To read DaCosta’s full letter, click here.

The Related Group said in a statement that they are appreciative of the Decide DeKalb board’s vote.

“We also thank the community and reiterate that we intend to be a good neighbor and will continue to look for ways to ensure this is a great project for DeKalb County,” the statement says. “We’re excited to bring a best-in-class development to DeKalb – it will provide a significant community benefit and will bring millions of dollars to the tax base. Manor Druid Hills is a $180 million investment that will include 381 apartments, with 20 percent of the units available at affordable rates, 55,000 square feet of medical office space, 140-room hotel with long-term stay suites for families with patients at CHOA, as well as $4.5 million in roadway, sidewalk and greenspace improvements. We know our development will make the Decide DeKalb Board, team and all of DeKalb proud.”

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