Gultch/CIM Group Development

[echinatl]

I've lived downtown for over 10 years, and I'll take pretty much anything that fills in the gulch that's "nice". I've got a lengthy wishlist, but seriously whatever they want to put in there that is nice, or hell even just ok would make me extremely happy. It's a total eyesore that every person that has ever visited me has commented on negatively. It's depressing to walk by and on hot days you can feel the heat radiating up from the parking lot down there. There is a really REALLY good chance nothing happens and the gulch stays as is for the next 30 years. Fingers crossed something positive even happens at all.

[GTAlum]

Any updates after yesterday's meeting about the Gulch? Not seeing much news about it today..

[Atlanta3000]

Atlanta3000's School of Finance - Gulch Edition

Does everyone understand a $5 Billion development costs more than $5 Billion? Why? Interest on money. When you buy a $500K house, is the total cost of the house $500K? Yes - if you don't need a loan. No - if you need a bank to finance the house.

The same goes for the Gulch. CIM Group doesn't have $5 Billion in capital lying around to underwrite this project. They are asking the CoA to issue 30 Year bonds - which they will purchase all the bonds so CIM Group is on the hook if the property tax and/or retail sales tax incentives don't cover the bonds. Also, the CoA has defined milestones in the Agreement CIM Group needs to hit before they will issue a new traunch of bonds. CIM Group does have the ability to sell these bonds at a future date to inventors, but again the CoA is not liable if CIM Group cannot repay the bonds.

As mentioned several times before, CIM Group is self financing $500 Million in infrastructure to bring the 40 acres to street level. This will take 3 - 4 years and the city and state are not funding any of these costs by ways of bonds or any other incentives.

CIM Group said they believe it will take 10 years in order for full build out of the project at an estimated cost of $5 Billion. So let's amortize $5 Billion at 30 Years @ 6.5% (average commercial mortgage rate):

https://www.myamortizationchart.com/...ation-schedule


So can those on here and in the media PLEASE stop saying the CoA and the State are almost paying half of the project because you sound fucking stupid.

Why? Because this $5 Billion project is going to cost $11.4 Billion when you factor in the interest cost of the bonds.

[wonshirim]

Atlanta 3000:

Do you have updates on whereabouts of this after the Sept. 26 session? Do you think it might get blocked by the City Council?

[Username123]

https://www.ajc.com/news/local-govt-...jLKmGzDUr3DFO/

“An effort by members of Atlanta City Council to get an audit of the $5 billion Gulch development proposal failed Monday to win the eight council votes needed to pass.

The failure to approve the outside review could keep the project on track for a council vote at its next meeting Oct. 15. Last month, Mayor Keisha Lance Bottoms delayed a vote on the Gulch deal because of a lack of council support.”

[Atlanta3000]

Originally Posted by wonshirim

Atlanta 3000:

Do you have updates on whereabouts of this after the Sept. 26 session? Do you think it might get blocked by the City Council?

Based on the City Council Meeting yesterday, I think this will pass. The final step is October 15th when the City Council will be voting on the Gulch Agreement.

[jct3]

if it's such a great deal, it'll hold up to outside independent analysis (not paid shills, which is what I fear we'll get).

[Libertarian]

if it's such a great deal, it'll hold up to outside independent analysis (not paid shills, which is what I fear we'll get).

Truth.

[Atlanta3000]

Originally Posted by jct3

if it's such a great deal, it'll hold up to outside independent analysis (not paid shills, which is what I fear we'll get).

I am not sure your background, but I worked for one of the top Management Consulting firms - PricewaterhouseCoopers. You know why several Council Members didn't want a third party audit? Because they knew it would take to long and the City Council already has access to an external legal and internal auditors that could and should have advised them on the specifics of the Agreement if they chose to utilize that appropriate resources.

Since it seems you have versed yourself on the Agreement, do you care to share with the group the areas of your concern?

[Libertarian]

I worked for one of the major global audit firms and can assure you, they are financial prostitutes. Also they are expensive, but I repeat myself. The city would be well advised to take a skeptical attitude and insist that CIM convince them it's such a great deal for the citizens and taxpayers.

[Atlanta3000]

Originally Posted by Libertarian

I worked for one of the major global audit firms and can assure you, they are financial prostitutes. Also they are expensive, but I repeat myself. The city would be well advised to take a skeptical attitude and insist that CIM convince them it's such a great deal for the citizens and taxpayers.

To my knowledge nobody is telling the City Council not to review the Agreement and just sign it.

What some of the City Council members were saying yesterday is there is an independent city agency (I forgot the name) that is capable of reviewing major legal agreements such a this one. They also have retainers with consulting companies an legal firms should they need any specialized services. The fact that some of members on the City Council want to dick around and go through a lengthy selection and procurement process to find a third party audit firm validated they didn't understand and/or utilize the resources given to them. That is my problem.

That and every Tom, Dick and Harry coming out of the woodwork from all parts of the city wanting a handout if the Gulch deal happens. For instance people were arguing CIM Group should be building affordable housing for people at 0 - 30% of AMI (or people who can't afford to pay rent). Literally people were arguing against development and high paying jobs. I think the people believe the way to solve the city's problems and affordable housing shortage is to keep the city poor.

This is what I heard yesterday from the public
Development + High Paying Jobs = Gentrification/BAD
No Development + Low Paying Jobs = Affordable Housing/Good

[atlwarrior]

Originally Posted by Atlanta3000

To my knowledge nobody is telling the City Council not to review the Agreement and just sign it.

What some of the City Council members were saying yesterday is there is an independent city agency (I forgot the name) that is capable of reviewing major legal agreements such a this one. They also have retainers with consulting companies an legal firms should they need any specialized services. The fact that some of members on the City Council want to dick around and go through a lengthy selection and procurement process to find a third party audit firm validated they didn't understand and/or utilize the resources given to them. That is my problem.

That and every Tom, Dick and Harry coming out of the woodwork from all parts of the city wanting a handout if the Gulch deal happens. For instance people were arguing CIM Group should be building affordable housing for people at 0 - 30% of AMI (or people who can't afford to pay rent). Literally people were arguing against development and high paying jobs. I think the people believe the way to solve the city's problems and affordable housing shortage is to keep the city poor.

This is what I heard yesterday from the public
Development + High Paying Jobs = Gentrification/BAD
No Development + Low Paying Jobs = Affordable Housing/Good

Did you speak attend the meeting and speak when the floor was open. All the things you’re saying make so much sense.

[Atlanta3000]

Originally Posted by atlwarrior

Did you speak attend the meeting and speak when the floor was open. All the things you’re saying make so much sense.

I was they guy they had to taze. Just kidding I watched online.

[atlwarrior]

Originally Posted by atlanta3000

i was they guy they had to taze. Just kidding i watched online.

Hahahaha!

[atlwarrior]

Here’s the Gulch 600 page agreement

https://drive.google.com/drive/mobil...usp=drive_open

[smArTaLlone]

As the $5 billion Gulch redevelopment heads toward a potential Oct. 15 vote, Atlanta Mayor Keisha Lance Bottoms is reevaluating the controversial extension of the Westside Tax Allocation District, according to multiple sources.

That concession could reshape the ambitious deal between the city and Los Angeles real estate company CIM Group, which proposes to develop the Gulch over the next 10 to 12 years, creating a micro city on the historic but now vacant railyard.

For CIM, the TAD extension provides not only critical funding for the project’s construction but also time to pay back the debt it assumes to develop the Gulch’s new offices, residences, hotels and restaurants.

Taking the TAD extension off the table, however, could sway Atlanta City Council members who aren’t on board because they believe the city is giving away too much public financial support to CIM. As of press-time on Oct. 3, the mayor was still a few votes short of the eight needed to pass legislation for the project.

[GlobalResNativAtlant]

I appreciate the knowledge from Atlanta3000. My opinion has changed from a naysayer to a proponent of the Gulch development. DT Atlanta needs as much development as it can get.

[echinatl]

Originally Posted by GlobalResNativAtlant

I appreciate the knowledge from Atlanta3000. My opinion has changed from a naysayer to a proponent of the Gulch development. DT Atlanta needs as much development as it can get.

I think people should also consider the costs of having a giant ugly hole in the middle of downtown, where major sports and convention business comes through every week. It's something visitors write about in their surveys, and business leaders get an eye full while scouting relocation sites.

[smArTaLlone]

This is another perspective on the proposed deal but I am mainly posting this because it gives a better understanding of the deal itself.

https://www.georgiapol.com/2018/10/0...-deal-matters/

The government isn’t fronting money to the developers to build something. They’re offering to use the taxes on what gets built there to cover some of the construction costs so something can be built at all.

That’s called tax increment financing. It’s how Atlantic Station was redeveloped. It’s almost certainly how the old GM plant in Doraville along I-285 is going to be redeveloped. And it’s about the only way gigantic, expensive brownfields get cleaned up. The Gulch is unlikely to be developed without tax increment financing. No one is going to put up $500 million to build up the area to street level without government help, not when there’s cheaper land to be had. Neither the city nor the state is putting money at risk here: there’s no tax coming in on that land right now.

In the deal, the state is borrowing money, which will be paid by sales taxes from whatever gets built on the site. If the site goes undeveloped, there’s no tax money to pay off the bonds. Normally, the state would be on the hook for that debt. But in this case, the developer is buying all the bonds. If the developer wants its money paid back, it has to build something that generates economic activity. The developer has accepted greater risk than is usual under these conditions … which is why the deal is fairly unique and worth pursuing.

The Gulch is unlikely to be developed without tax increment financing. No one is going to put up $500 million to build up the area to street level without government help, not when there’s cheaper land to be had. Neither the city nor the state is putting money at risk here: there’s no tax coming in on that land right now.

[skyscraperpage17]

Here's yet another perspective. Can never have enough of them...

Norfolk mayor: No bidding war for Norfolk Southern

https://www.ajc.com/news/local-govt-...DTTk5j1EVIliO/