Andy Yeoman is the District 1 City Council representative for the City of Doraville and a Director on the Doraville Development Authority

I’ve lived in the Tilly Mill / Winters Chapel neighborhood for 9 years. One thing that’s remained a constant has been the blighted and functionally obsolete shopping center at Tilly Mill Rd and Peachtree Industrial Blvd a couple of blocks from my house, and next door to our beloved elementary school. It’s been a while since the news broke about its possible redevelopment so I thought I’d fill you in on the latest.

The center’s functional obsolescence is due to a number of factors, including the property’s age and years of neglect, as well as the center’s topography and its outdated configuration. I’ve been asked why a grocery store couldn’t go on this site, so I asked a commercial real estate expert and his response was, “Shopping carts roll down hills”. I felt like an idiot and didn’t ask any further questions.

In 1986 there were two ways I could have come home from work. I could take the Tilly Mill Exit on I-285, or take a right at the four-way stop at PIB and Tilly Mill. This put a lot of eyeballs on this shopping center and it thrived for a number of years. When the Georgia DOT raised PIB and closed the Tilly Mill Exit, they created a Doraville bypass that eliminated the primary access and visibility of the center. The property has not been a viable retail center since its latest decline began over 15 years ago. Through the years I’ve reported gang graffiti and dumping by careless individuals that the owner has been responsive to fixing. In its current condition, the property is a drag on Doraville’s future.

PROJECT DESCRIPTION:
Kaufman Capital Partners plans to redevelop approximately 9 acres of the 14-acre “The Village at Tilly Mill Crossing” property into a Class A market-rate multi-family property, containing approximately 320 residential units and 3,500 square feet of commercial space, and 7,500 square feet of amenities that are typical for a development of this scope, quality, and size. In addition, a large section of the existing shopping center will remain in the southwest corner. The project received final zoning approval on August 5, 2019.

DETAILS ON INCENTIVE
On April 6, 2020, the Doraville Development Authority entered into a Memorandum of Understanding (MOU) with the developer and agreed to a unique incentive where the developer, in exchange for an administrative payment and public benefits detailed below, will be sheltered from paying the increase in taxes that would otherwise be owed for a period of time.

The property in its current state pays $137,000 in property taxes and Doraville’s share is $27,722. With this incentive agreement, the developer will pay the Development Authority an administrative payment of $160,000 until they reach the incentive, and then the property will return to the regular tax rolls where Doraville’s share would be roughly $248,000 per year. The amount of time it takes for the developer to reach the incentive will depend on what the independent tax assessor values the property. If they value the project at $60,000,000 it may take close to 20 years to reach the incentive. If the project appraises at $80,000,000, similar to projects in Chamblee, they will reach the incentive in less than 9 years. As you can see, while the developer is getting a generous incentive, and the City of Doraville is collecting much more than they would with the project sitting there in its current state.

Additionally, the developer will pay the Doraville Development Authority roughly $63,000 upon closing this summer. There are major benefits to both parties. (see FAQ below on other revenues the city will receive).

Next, the developer will take this MOU and begin underwriting with private capital and investment banks to finance the project. The Development Authority is giving the developer until August 2020 to close on the financing and file permits with the City of Doraville, or they will lose the incentive.

Unlike incentives at Assembly and many others in the area, there is no set number of years on the incentive. Realistically they could reach it in less than 10 years, but the Development authority did cap it at no more than 20.

WHAT BENEFIT DOES THE CITY GET FOR THIS INCENTIVE

Doraville Officer Housing – Hero Housing
As an additional public benefit, I asked that they set aside three units in the community for Officer Housing or “Hero Housing” at a discounted “affordable” price point for three City of Doraville Police Officers. This will serve to add an additional measure of security for the project, while also helping the city attract quality talent living in the community they serve. It is appropriate for the city to receive a public benefit when a developer asks for an incentive. I am not aware of a deal similar to this anywhere in Atlanta, and I would like to thank Kaufman and the other directors on the DDA for making this happen.

New Queueing Lane for Hightower Elementary
In exchange for the incentive, the developer has also agreed to add a traffic queuing lane for Hightower Elementary School. This involves widening Tilly Mill slightly that can also be used as on-street parking during weekends and times that school is not in session. This will address a major transportation issue in our community that everyone in the neighborhood is familiar with. The developer will finance and construct these improvements with no city of Doraville funds.

Remaining Commercial Area
The community will continue having a neighborhood shopping center with tens of thousands of square feet of retail space. The developers have committed up to $150,000 for additional improvements to the remaining commercial building and parking lot to ensure seamless and attractive connectivity to the project.

Millennial Housing – Approximately 400 new residents to the City of Doraville
It is anticipated that approximately 400 new residents will live at this new community, the majority of whom are expected to come from the current daily PIB commuter traffic, and thus relocating from other cities and neighborhoods, providing new residents to the City of Doraville. Data suggests that the community is very desirable for the tens of thousands of people working at Technology Park in Peachtree Corners or Perimeter Center.

Economist Charles Whatley conducted an economic impact study and concluded that the 400 new residents could generate in excess of $4,400,000 per year of discretionary spending in the immediate area with local businesses. The ancillary benefit to the City of Doraville will be that these new residents will shop and dine in Doraville’s established commercial district nearby on Buford Highway.

Link to the MOU: Memorandum of Understanding (MOU) – TILLY MILLL – DORAVILLE (2020)(62109361v8)

Have questions? I’ve compiled an FAQ below if you’re a wonky person and like all the details!

 

Under Georgia law, Dekalb County nor the City of Doraville can grant a property tax abatement.

This project was structured as a bond-financed sale-leaseback. It sounds complicated, but let me explain. Essentially, the developer will go into the private capital markets and secure financing. The property title will then be vested in the Doraville Development Authority which is a tax-exempt authority who will lease the property back to the developer for a rent equal to the debt, avoiding any property tax that would otherwise be owed. Once the debt is retired, the developer has the option to buy it back from the Doraville Development Authority for $10.00.

The developer will pay the Doraville Development Authority $160,000 a year for years 1-6 and will escalate 2% per year thereafter. Estimating conservatively, the developer will pay the Doraville Development Authority over $2,500,000 as an administrative payment.  These payments will be reinvested into other economic development projects in the City of Doraville.

In any case, this arrangement is non-recourse, meaning state law protects the Doraville Development Authority and the City of Doraville from any debt obligation. No taxpayer money will ever be spent on this project.

Analysis of similar projects and rental price points indicate that very few children reside in communities like this. The target resident is typically unmarried with one or two persons living in the household.

Conservatively, at the end of the incentive, this project will generate over $500,000 per year for the Dekalb School District.

It is illegal in the state of Georgia to consider traffic or school impact while evaluating zoning. Neither of those are controlled by individual property owners. It is time for taxpayers to demand more accountability on how our school districts spend the money it collects, and how it addresses facility plans.

Dekalb County School District currently leases the teacher’s parking lot from the property owner. The owner has informed the school district of this project, and the school officials have indicated they plan to move the parking to the school site. The school district has not given the City of Doraville any additional information about their intention.

The Doraville Development Authority (DDA) approved a Memorandum of Understanding (MOU) with Friday’s Plaza Property, LLC (Developer) on April 6, 2020. This MOU allows the developer to understand the incentive framework and begin underwriting with different banks and investment firms. Once the developer has secured financing they will begin the process of final design and engineering and will apply for permits with the City of Doraville. This process is expected to take about five months.

The developer has agreed to file permits with the City of Doraville by August 1, 2020 and close on the financing by September 30, 2020 or they will lose the incentive.

I will keep you updated on the status of these milestones.

MILESTONE DEADLINE
Complete execution of MOU (this Agreement) April 30, 2020
Demolition Permit July 1, 2020*
Land Disturbance Permit August 1, 2020*
Building Permit August 1, 2020*
City or Governmental Approval of Water August 1, 2020*
City or Governmental Approval of Fire August 1, 2020*
City or Governmental Approval of Sewer August 1, 2020*
City or Governmental Approval of Pool August 1, 2020*
Issuance of Bond September 30, 2020
Substantial completion of Project (subject to force majeure) December 31, 2022
* Deadline to submit

LOCATION:
The Village at Tilly Mill Crossing
2421 Van Fleet Circle, Doraville, GA, and
4256 Tilly Mill Road, Doraville, GA

During the course of development, the city will collect over $1,000,000 in permit and land disturbance fees.

Ongoing, the city will collect franchise fees on utilities and a small amount annually on personal property taxes based for business equipment and automobiles. This could total $55,000-$75,000 per year.

3% franchise fee on AT&T TV, Phone or Internet services.
3% franchise fee on Comcast TV and Internet
5% franchise fee on Georgia Power
3% franchise fee on Natural Gas.

No. This is a market-rate project with no HUD tax credits. To receive the incentive offered by the Development Authority the developer has to meet a very strict investment target of $50,000,000. To meet this investment target the developer would have to build class A units with popular amenities. Put simply, if they build a cheap product they will not meet the investment target and will lose the incentive.

With an average gross monthly rent of $1,456 we can derive the average annual income needed to qualify to lease in the new community is about $62,403 per year.

To embrace our mission of “Diversity, Vitality, and Community” I feel our city has to embrace diversity in mixed-incomes as well. While I am concerned with housing affordability, our city does not currently have any housing options for someone wanting to rent an apartment constructed in the last 30-40 years.

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