ATLANTA | Development Thread VI

[Ant131531]

Originally Posted by ATL_J

A caveat should be added that certain foreign companies don't have the same sort of capital / debt restrictions as others. Any traditional debt financing is going to require pre-sales.

Edit: Also, do we know they don't have presales? I haven't seen anything mentioning that they don't. Additionally, I haven't been by the site, but as we've seen with multiple other condo projects, pushing dirt around doesn't mean they got a construction loan. Developers often use equity to do this to make people feel the project is real and get people on board (see Opus, see JPX's former project).

JP5 has two cranes up with foundation already in place. It's definitely under construction.

[clexmond]

Originally Posted by 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.

If anything is a public good in this plan, it's the building of the viaducts to bring the Gulch up to street level. I'd prefer to see the city issue bonds for that component (and retain public rights over the streets) and let developers secure their own financing for developing the then-usable space.

[Atlanta3000]

Originally Posted by clexmond

If anything is a public good in this plan, it's the building of the viaducts to bring the Gulch up to street level. I'd prefer to see the city issue bonds for that component (and retain public rights over the streets) and let developers secure their own financing for developing the then-usable space.

It is against the law for a City to issue bonds for a project that is not tied to a source of revenue. What happens if the city pays the $500 Million for the infrastructure and no developers are interested in developing at the site? That is why the MARTA 's $2.5 Billion expansion is funded with bonds because the CoA is raising retail sales tax $.05.

[skyscraperpage17]

Originally Posted by Atlanta3000

[B][COLOR="Navy"][SIZE="5"]CIM Group doesn't have $5 Billion in capital lying around to underwrite this project.

With all due respect, that's bullshit. You can't convince me that a company with yearly revenue of $260 million doesn't have the capital on hand to pay for this project over a span of 30 years.

We can debate what's fair or actually realistic, but that's an entirely different discussion. And even then, from a philosophical standpoint, I am sympathetic to the individuals expressing outrage about a multi-million dollar enterprise begging for "incentives."

[Atlanta3000]

Originally Posted by skyscraperpage17

With all due respect, that's bullshit. You can't convince me that a company with yearly revenue of $260 million doesn't have the capital on hand to pay for this project over a span of 30 years.

We can debate what's fair or actually realistic, but that's an entirely different discussion. And even then, from a philosophical standpoint, I am sympathetic to the individuals expressing outrage about a multi-million dollar enterprise begging for "incentives."

First S-17, CIM Group is a private company and they do not publish their Annual Report to the public so I am not sure where you are getting your info. Furthermore, real estate developers do let money sit around. Any money sitting around is not making more money.

[skyscraperpage17]

Originally Posted by Atlanta3000

First S-17, CIM Group is a private company and they do not publish their Annual Report to the public so I am not sure where you are getting your info. Furthermore, real estate developers do let money sit around. Any money sitting around is not making more money.

See the link below, towards the bottom...

https://www.crunchbase.com/organizat...ction-overview

[coyotetrickster]

Originally Posted by skyscraperpage17

Don't forget places like Great American Cookies, Shane's Rib Shack, Mellow Mushroom, Huddle House, Church's Chicken and Zaxby's.

There's been some hemmorhaging lately though, with the loss of Popeyes and the company that owns Longhorn Steakhouse (Darden?).

That's really what I love about Atlanta though. It's home to so many successful, home-grown companies that have become household names.

It's also a city that has tentacles in almost everything.

*Aerospace (Delta, Honeywell, Lockheed Martin, etc. all have major operations here).

*Logistics (UPS, Norfolk Southern, Hartsfield-Jackson being the world's busiest airport.)

*Food / Beverage (Coca-Cola, tons of restaurant chains, etc., RaceTrac, etc.)

*Banking / Finance (SunTrust, Equifax)

*Government / Military (CDC, Dobbins Air Force Base, Federal Reserve Bank)

*Broadcast Media / TV (Cox, Turner Broadcasting, The Weather Channel, etc.)

*Healthcare (Cancer Treatment Center of America, American Cancer Society, McKesson, etc.)

*Housing (PulteGroup)

And now Atlanta has buergeoning industries in:

*Automotive (Mercedes, Porsche, Kia, PSA Groupe)

*Film (Raleigh Studios, Pinewood Studios, Founders Studios, etc.)

*Tech (NCR, Anthem, Georgia Tech, etc.)

About the only thing Atlanta doesn't have siginificant ties to is the oil industry, mainly because its geography isn't conducive to drilling / fracking.

Not sure why you have McKesson on this list. McKesson is still headquartered in SF. It has a large administrative center in Alpharetta, but it is not hq's in the region.

[Atlanta3000]

Originally Posted by coyotetrickster

Not sure why you have McKesson on this list. McKesson is still headquartered in SF. It has a large administrative center in Alpharetta, but it is not hq's in the region.

Administrative Center? MeKesson's Provider Solutions is based in Atlanta and over 4K people work in tis office in mainly software development and consulting roles.

[skyscraperpage17]

Originally Posted by coyotetrickster

Not sure why you have McKesson on this list...

This is why:

Originally Posted by coyotetrickster

...It has a large administrative center in Alpharetta...

[Martinman]

Originally Posted by ATL_J

Perhaps it is not entirely accurate, but the rationale for providing tax breaks to a project with minimal public benefit (as outlined and compared to the tax breaks) deserves scrutiny. The reality is this project, subsidized by a loss of tax revenue, would steal demand from other in town locations that WOULD provide an increase to the tax digest without similar subsidies needed.

If they can't make the gulch project work, that means the economics are not there. Which is fine, because as Newport and others improve the South Downtown, Downtown, and the west Atlanta neighborhoods, eventually the economics will make sense without the massive subsidies in addition to not stealing demand from other sources.

The only possible way this makes sense for the city, if it was the ONLY way Amazon would come to Atlanta, but even then you'd have to couple these subsidies with those also being provided be local and state agencies to lure Amazon, and then I'd still question if it all makes sense.

I never suggested or implied that this deal doesn't deserve scrutiny. I did say however that particular blog post is so entirely inaccurate that it doesn't inform us of anything. I would love to see a qualified independent analysis of the proposed deal but that was far from it. The supposed $100 million "public benefit" itself is laughable considering the Gulch development would never be "tax free". The obvious public benefit would be the taxes generated annually by the development.

This applies to property tax with max total of $500 million.

10% of project costs will be reimbursed through real estate taxes generated exclusively within the Gulch Enterprise Zone.

This applies to sales tax. This is the state's portion of the sales tax.

Provides for 5 cents of the 8.9 cent sales tax to be available to
support development bonds (excluding taxes for education, public transportation, and water and sewer projects).

And keep in mind that in order for CIM to get the $1.75 billion incentive, they would in fact have to get HQ2. Otherwise the total incentive will be much less in accordance with a much smaller development.

https://saportareport.com/wp-content...on-8.21.18.pdf

[Atlanta3000]

Originally Posted by Martinman

And keep in mind that in order for CIM to get the $1.75 billion incentive, they would in fact have to get HQ2. Otherwise the total incentive will be much less in accordance with a much smaller development.

[/URL]

This is the major point - Thanks Martinman.

[Verge]

Originally Posted by Ant131531

Shocker! Yet another project in this town VE'd.

I actually think it looks better--

[jpk1292000]

Originally Posted by Ant131531

Shocker! Yet another project in this town VE'd.

I think it looks great.

[Verge]

Originally Posted by jpk1292000

I think it looks great.

I see design refinement-- Not VE--

[Atlanta3000]

R&B Hall of Fame Coming to Atlanta????

Video Link

[shivtim]

Originally Posted by tdawg

^ It absolutely is. The CDC is such an important organization with global impact/reach. Atlanta is also the U.S. headquarters of CARE.

Atlanta is the world headquarters of public health and global health, with tens of thousands of public health workers between CDC, Emory University, CARE, The Carter Center, and a variety of non-profits and consultants (such as the Council of State and Territorial Epidemiologists). This all has a massive impact on our economy.

[coyotetrickster]

Originally Posted by Atlanta3000

Administrative Center? MeKesson's Provider Solutions is based in Atlanta and over 4K people work in tis office in mainly software development and consulting roles.

You are correct. Executives I worked with at McKesson tended to refer to most non-HQ locations as administrative centers. My BFF was a Director at Provider Solutions. McKesson consolidated several regional offices into the Alpharetta location a few years ago. She took a buy-out rather than move to Alpharetta from Denver.

[Pemgin]

Was this news posted here? Jones Day considering Midtown Union for new office.

https://www.bisnow.com/atlanta/news/...wn-tower-93445

[jnihiser]

It appears that they are well underway:

[1lifealex]

SCOPE / COMPONENTS
- 12-story residential over five-levels of parking
- 336 units
- Mix of Studio, 1BR and 2BR units
- 3,200 sf roof-top terrace
- Amenity pool deck on top of parking
- Future hotel proposed adjacent to residential tower
- Residential tower is under construction, expected completion spring 2020 https://www.nilesbolton.com/generation/