The Dunwoody Development Authority has agreed to issue a $7 million tax break to a mixed-use development that includes apartments reserved for seniors.
At a March 8 Dunwoody City Council meeting, Mayor Lynn Deutsch and three members of the council voted to approve the development at 84 Perimeter Center East at the intersection of Ashford-Dunwoody Road. The property was originally approved as a hotel in 2019, but was revamped in light of the COVID-19 pandemic’s effect on the hospitality industry.
The council took a while to approve the zoning for the development. Both council and members of the city’s Development Authority – a government body which issues tax breaks to real estate projects – expressed concerns along the way about the age-restricted nature of the development and how that could be enforced. When the council approved the development, they did so with the stipulation the property would have to stick to senior-only housing.
The Development Authority initially approved an “inducement resolution” for the $7 million abatement at its Feb. 18 meeting to get negotiations underway. At its May 20 meeting, the authority approved a “memorandum of understanding,” which begins the process of issuing funds. The estimated value of the offered tax break for the development is $7 million over 10 years.
According to the agreement, an apartment will not count as “age-restricted” unless the actual person whose name is on the lease is 55 years old or older. If at least 80% of the occupied units in the property are not leased by someone 55 years or older as per the federal Fair Housing Act, then the tax abatement could be withdrawn.
According to the authority’s attorney, Dan McRae, since the authority last saw the plan for the development the estimated budget has risen from $85 million to $97 million.
Authority member Jeff Ackemann expressed concern over the fact that the budget had risen. He asked John DiGiovanni, a representative of property owner JSJ Perimeter LLC, if he believed the developer would be able to get sufficient rent increases on both the residential and the retail side to cover the cost.
DiGiovanni said the cost had risen because of demand for construction materials, as well as the cost of the types of materials it would take to create the “high end, class A” property the developer plans to build.
“We think we can make those numbers work,” DiGiovanni said. “There is an assumption that some of these commodity prices are going to come down before we start construction.”
Economic Development Director Michael Starling said in an email that it could take four or five months to get financing in place and create the final bond documents. According to the conditions approved by the council, the developer must apply for a land disturbance permit within two years of the zoning approval.