Developers for a proposed new office tower and hotel in Dunwoody’s Perimeter Center area are seeking a $130 million tax break from the Dunwoody Development Authority as they hope to begin construction early next year and open in 2020.

Trammell Crow, the developers, must first get a special land use permit from the mayor and City Council to build a 16-story office tower and 10-story hotel at 1134 Hammond Drive, next to the Dunwoody MARTA station in a largely unused corner of the Perimeter Mall parking lot. The company plans to purchase the land from the mall.

A rendering of a 16-story office tower proposed by Trammell Crow to go at the intersection of Hammond Drive and Perimeter Center Parkway. Trammell Crow also is proposing a 10-story hotel at the site. (City of Dunwoody)

The first reading of the special permit was at the Sept. 25 council meeting; the second and final vote is scheduled for Oct. 9.

The Development Authority on Sept. 14 approved an inducement resolution with Trammell Crow for $130 million in revenue bonds over 10 years — the same deal that was approved a year ago for developer Transwestern. Transwestern, however, eventually dropped the project when the City Council rejected their request for a 20-story office tower and approved only 16 stories.

“This inducement resolution is the first step in providing tax incentives,” Economic Development Director Michael Starling said.

The hotel is not part of the tax break request, Starling said.

The resolution allows the developer and the development authority to enter into talks about specifics of the agreement, while also triggering a financial analysis, he said. “We expect them to come back to the authority next year as they close on purchasing the property,” Starling said.

At that time, a memorandum of understanding would be negotiated, he said.

Under such tax abatement deals, the authority would own the property and lease it back to the developers, who would pay much lower property taxes in the beginning and then gradually increase the amount over many years. Ownership would eventually switch back to the developers.

The inducement resolution means a new financial analysis will be forthcoming to see what will be saved in property taxes from the city, DeKalb County and the DeKalb County School District. Starling said there will also be discussion on “clawback” provisions — setting out how the city would recoup the taxes should the project fail — in the agreement and on the number of jobs the new office building will bring to the city.

Brandon Houston of Trammell Crow told the mayor and City Council at the Sept. 25 meeting that his company was in talks with a tenant that is seeking to locate its headquarters at the building and that would take up 60 percent of the building.

“They do not have a headquarters in Dunwoody now. This would be new for the city,” he said.

Square footage of the office building is just under 350,000 square feet. The hotel will have 193 rooms. A pedestrian bridge would connect the MARTA station to the office tower and to the hotel. The location next to a MARTA station is a strong selling point for potential office tower tenants and also for the hotel, which would likely serve mainly business travelers, Houston said. Houston said the tenant he is in talks with plans to have at least 150 employees use MARTA.

Attorney Jessica Hill said the proposed development would include a 0.1-acre pocket park adjacent to the office tower where people could sit and eat lunch.

Resident Robert Wolford spoke in favor of the project, but urged the city to protect as many trees at the site as possible and to ensure the developer replaces trees that are cut down. There are 83 trees on the site and 40 are marked for removal, according to the city.

Mayor Denis Shortal requested the developers find a way to add more public green space to the project, perhaps close to where the Chick-fil-A restaurant is located at the site’s eastern end.

Density and traffic concerns were raised citing the city’s analysis that traffic would increase by 7.1 percent in the area. Houston said a hotel does not typically check in guests during morning and evening peak driving times, which should offset congestion concerns in the busy Perimeter Center.

Trammell Crow is also in talks to buy an existing MARTA parking garage for the tower’s use, the same plan that was initiated by Transwestern.
The hotel would be tucked into a triangular area — also now a surface parking lot — behind the tower and right next to the mall’s massive parking garage.

The hotel and the tower would have an elevated walkway and terrace connecting them. Hill has described the hotel as “screening” the parking garage from view. A resident told the Planning Commission, though, that the area is now screened by large trees that would be cut down for the project.
Houston said there is no completed architectural design for the hotel and no hotel brand yet secured, although he said it would likely be a major brand name. He did say the hotel would have a fitness center, limited conference space and a roof-top bar and outdoor space.