More Than $400M In Bonds Set To Fuel Property Tax Breaks On Major Atlanta Projects

As 2017 comes to a close, a host of banner Atlanta real estate projects are expecting millions of dollars in property tax breaks from the City of Atlanta and Fulton County.

Projects such as Colony Square's revival and Northside Hospital Healthcare System's Midtown medical office development are on tap for more than $400M in revenue bonds issued on behalf of either the City of Atlanta's economic development arm Invest Atlanta or the Development Authority of Fulton County.

The bonds were filed with the Fulton County Superior Court in recent weeks and need a final green light from a judge. Projects run the gamut of real estate products, from major mixed-use and boutique hotel redevelopments to new distribution centers and refinancing bonds for an established Midtown project.

Developers and owners do not actually receive the dollar amounts of the bonds directly. Instead, the revenue bonds are used to offset property taxes the property owners are given exceptions for over the course of years, often at least a decade.

The largest tax break on the docket is a $160M revenue bond for North American Properties' Colony Square redevelopment. The developer is seeking tax breaks for its project redeveloping the existing food court and street-level space with more than 360K SF of retail and more than 260K SF of office, which will be developed in phases, according to bond documents. Those bonds will grant North American Properties more than $7M in property tax savings over a decade.

North American Properties began work this fall on the redevelopment project, which will also encompass more than 40K SF of community gathering space, fitness concepts, new restaurants and a food hall, company officials said. The first phase is scheduled to open on July 4, and the final phase, which will house a luxury movie theater, by November 2019.

Other projects getting property tax breaks include:

• The Georgia Tech Foundation is set to receive a series of revenue bonds through the Development Authority of Fulton County that will refinance earlier ones drafted in 2011 and 2012 for previous developments in its Tech Square project. The new bonds will total $95M and will mature in 2058, according to documents.
• Northside Hospital is getting two revenue bonds through the Development Authority of Fulton County totaling nearly $100M for its new medical office building project in Midtown. One of the bonds is attached to an entity titled 1110 Midtown LLC, which is registered to Northside Hospital, according to state documents. Brand Properties is underway with a 170K SF medical office off West Peachtree Street, just south of 13th Street, which will house Northside Hospital offices, cardiology services, urgent care and an imaging center, Curbed reports.
• A $43M Development Authority of Fulton County revenue bond to an entity titled Piedmont Hotel Owner LLC, which is connected to Paces Properties, according to the Georgia Secretary of State's office. While details of the project in bond documents were limited to describing it as a rehabilitation of a boutique hotel, previous reports said Paces purchased the aging InTown Suites hotel at 1944 Piedmont Circle with plans to renovate it. Officials with Paces Properties did not return calls seeking comment.

• A $23M Development Authority of Fulton County revenue bond for a 400K SF Class-A warehouse at 4286 Southmeadow Parkway in East Point. The project, called Southmeadow Distribution Center, was picked up by Industrial Property Trust in September for $21M.
• A more than $50M Invest Atlanta revenue bond for Carter and its partners on plans for the Summerhill redevelopment project around the former Turner Field stadium. The project is set to include 85K SF of retail, 19K SF of creative office and 120 apartment units, according to documents. As Bisnow previously reported, this bond is expected to fuel nearly $5M in property tax savings over a decade.

Fulton Superior Court is scheduled to decide on these bonds later this month.

The bonds come on the heels of nearly $125M in revenue bonds by the Development Authority of Fulton County on behalf of Dewberry Capital for its redevelopment of Midtown's Campanile building that seeks to convert the ground level of the nearly 450K SF office tower into retail space and retire previous revenue bonds.