A developer’s plan to seek millions of dollars in tax abatements for a highrise on one corner of Perimeter Mall’s parking lot riled members of the Dunwoody Homeowners Association at the group’s most recent meeting.

“Nobody is dragging you in here kicking and screaming and you didn’t consider that cost and think, ‘Hey, those people who don’t get a 95 percent tax abatement might be a little pissed off by that?’” DHA board member Adrienne Duncan told Trent Germano, senior managing director of development for Transwestern, when he said the tax abatement would make the project viable and marketable.

Transwestern representatives presented their plans for the $130 million office building, called Nexus at Perimeter, to the DHA board on June 6. They say they intend to build on an unused corner of the Perimeter Mall parking lot adjacent to the Dunwoody MARTA station at the intersection of Hammond Drive and Perimeter Center Parkway.

The developers first presented their plans for the 350,000-square-foot building to the Dunwoody Development Authority on May 19 and told its members they would be seeking a 95 percent tax abatement.

Germano said the tax abatement would give the proposed development an “edge” and allow it to compete with existing developments as well as the Perimeter Summit development being constructed now in Brookhaven, across I-285. Perimeter Summit last year received a $6.3 million tax break from DeKalb County to build a 360,000-square-foot office tower.

‘New office buildings are being built with tax abatements in play’

Transwestern’s request for a tax abatement, which still must formally be made before the Dunwoody Development Authority, would be a 95 percent abatement for the first year only.

Michael Starling, director of Economic Development for the city of Dunwoody, said the DDA follows a schedule that mandates the abatement taper off over the years.

“Based on the final tax abatement structure and the entire project’s assessed value determined by the DeKalb Tax Assessor’s office, the abatement could be worth around $10 million dollars over the 10 years,” Starling said.

“The anticipated schedule would include gradual annual reductions in the tax abatement amount, which would potentially create a tax abatement rate of approximately 45 percent over the full 10 year period,” Starling said.

Perimeter Mall pays taxes to all five jurisdictions, Starling said. But the corner of that parking lot and the MARTA parking deck that Transwestern wants to purchase for its highrise development is not producing much revenue, he said. How much is not known – it will be up to Transwestern to determine that amount through analysis of the property when it formally asks for the abatement, he said.

What Starling could say is that the 5 percent Transwestern would pay in taxes the first year of the abatement, if approved, would be significantly more than any tax revenue currently being collected from the undeveloped parking space and the parking deck and distributed to the city, county and the DeKalb Board of Education.

“They will receive 5 percent [in taxes] of a greatly improved piece of property,” Starling said. “I suspect they will get more in year one than they do now.”

And as the years go by and the tax abatement “burns off,” the city, county, PCID, school district and state will continue to “receive significantly more” than is what is being generated now on what is essentially a storage space on a parking lot.

Dunwoody has issued tax abatements in the past – to the Popeyes headquarters when it relocated from Sandy Springs; the former Sterling Pointe Hotel, now the Hampton Inn & Suites; and also for State Farm when it moved into the vacant buildings on 64 and 66 Perimeter East.

State Farm did not seek a tax abatement for its corporate headquarters now under construction. But there is a second phase to that development that will include the construction of three more 20-story buildings to include a restaurant and retail. Starling said he would be surprise if developers did not seek a tax abatement for the second phase.

Part of the discussion over tax abatements is that because other cities are providing them, then all cities must provide them, Starling acknowledged, and the issue of tax abatements are a policy debate being argued everywhere.

“It is a fairly common practice [to approve tax abatements] for new office buildings in Atlanta,” he said. “We do compete, no matter how much we are booming in Perimeter, with Midtown, Buckhead, Alpharetta. All new office buildings are being built with tax abatements in play.”

Transwestern’s proposed highrise also would stand across Hammond from the State Farm building now under construction to the southeast of the intersection of Hammond and Perimeter Center Parkway and the proposed High Street development to the northwest of the intersection.

High Street’s developers recently unveiled new drawings of the megadevelopment, which includes 8 million square feet of mixed-use space; 400,000 square-feet of retail and restaurant space, 3,000 residential units; 1 million square feet of Class A office space; 750 hotel rooms; approximately 8,500 parking spaces; and new streets, landscaped promenades, and signature parks and plazas.

High Street developers have so far only filed a land disturbance application for a parking deck with the city of Dunwoody, Starling said.

Starling said he would be “shocked” if applications for construction were not filed this year. As for a tax abatement for that development, Starling said that is unlikely because of the amount of multi-family units included.

 Tenant base wants to be located near MARTA

Transwestern is seeking a special land-use permit from the city to construct the building up to 20 stories; current zoning for the property only allows for two stories.

Renderings of the building by Cooper Carry architects show 16 stories. DHA President Robert Wittenstein said the drawings should accurately represent what the developers are seeking.

“It’s annoying … that you are asking for one thing and your visuals are showing another,” Wittenstein said.

Germano explained they are comfortable with the 16-story highrise but wanted the flexibility to build higher if a big-name company wanted to locate there.

The project includes a 5-story parking deck within the structure. Transwestern is also set to purchase the MARTA parking deck closest to the mall. No traffic study has been done, Germano said. Because the office building is located next to the MARTA station, it is expected many people would be using public transportation to access the building.

Architect Sean McClendon with Cooper Carry said his company’s tenant base is demanding to be located next to public transit.

The highrise would include a two-story lobby and a restaurant and some retail business on the main floor. A pedestrian bridge would connect the building directly to the MARTA station.

Transwestern is buying the property from General Growth Properties, owner of Perimeter Mall. As part of the deal, General Growth will buy MARTA out of its lease of the parking deck closest to the mall; that lease expires in 2017.

The planned office building will eliminate 119 parking spaces from the mall, but those spaces will be replaced by parking spaces inside the parking deck, Germano said. The MARTA parking deck has 600 spaces; 481 spaces would be gated off from replacement mall parking to be used by those in the new office building, he said.

Plans are to break ground in early 2017 and open in late 2018.

Dyana Bagby

Dyana Bagby is a staff writer for Reporter Newspapers and Atlanta Intown.

One reply on “Tax abatement for new tower riles some in Dunwoody”

  1. The line of reasoning used by Mr Starling is so stupid. It looks like he is hinting that a tax abatement is a good idea since a non-tax producing piece of property is being turn d into a tax producing property. And he hints that a tax break is needed since we compete against midtown, buckhead etc. cities will always have non tax producing land auch as parking lots, parks, parking decks. That is part of a town and city. We don’t want every sq inch of land coverted to tax producing entities. This just ensur s that we are wall to wall buildings. We do not want to compete with atlanta- we have a $25mm cuty budget which is fine. We don’t want hi rise anything. Me Starling thinks we are competing with mistown et all which is why he should be removed from his position. He is pushing dunwoody to turn into midtown since he seemsto think that being what we are is not good enough.

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