Submitted by Charles Gerrick, REALTOR®
By Rachel Tobin Ramos and Ty Tagami, The Atlanta Journal-Constitution
Disputed Brookhaven project gets lift
Developers of a large retail project in Brookhaven say they’ve signed four anchor tenants and plan to start construction this fall, even without a controversial tax break in hand.
Sembler Co. An aerial shot of Town Brookhaven, showing Georgia clay where retail tenants soon will rise. Construction on new anchor tenants will begin this fall.
Thursday’s announcement by Sembler Co. shows retailer interest in the Town Brookhaven mixed-use project, where apartment buildings now sit ringed by red clay.
But it doesn’t end the Florida developer’s bid for a larger tax break that the firm says it needs to finish the project with restaurants and boutiques.
Sembler said it signed leases in recent weeks with Costco, Publix, LA Fitness and CinéBistro, an upscale dinner-and-a-movie house.
Work should start in November, with the stores opening in late 2010, Sembler said. The 54-acre project is near Oglethorpe University and the Brookhaven MARTA Station in DeKalb County.
“I feel great about our leasing efforts,” said Jeff Fuqua, president of Sembler. “To open stores in this environment is not easy to do.”
Sembler generated political heat in May by seeking a 100 percent property tax abatement. It was initially valued at $52 million over 20 years, though the estimated value has since been reduced to $42 million. Sembler asked the DeKalb Development Authority for the expanded break , after the authority had already granted a 10-year abatement worth $20 million.
Fuqua argued that the tax breaks would be offset by the $181 million in sales tax revenue and 1,100 jobs the site could generate. Critics said it would deprive DeKalb and its school system of tax money needed during the recession, and that the sales tax boost could come at the expense of other merchants.
The Development Authority in June indefinitely delayed a vote while it reconsiders its policies on tax incentives.
Fuqua said Sembler still wants an additional tax break, though it may ask for less.
DeKalb County Commissioner Jeff Rader, a steady critic of the subsidy, said Sembler’s success with anchor tenants means it should be less dependent on taxpayer money now.
Rader contends that there is no shortage of retail space in DeKalb. A public subsidy for Sembler would be unfair to existing building owners who would stand to lose tenants to the Sembler project, he said.
“Those anchors should help [Sembler] in attracting the smaller tenants,” Rader said. “So do we need to give them another advantage over existing locations?”
Fuqua said he needs the tax break to help attract about 40 smaller retailers and local restaurants. He said he has a bank loan and investor capital, but the tax break will give him more money to build customized tenant spaces and lower lease rates.
The project calls for a “Main Street” spine with street-level retail. Fuqua said he wants it to be like Virginia-Highland, and that the additional abatement will help him attract the right mix of shops and eateries.
He said the anchor signings give DeKalb officials proof of Sembler’s commitment to the project.
“We are confident that they will be fair with us,” he said, “and give us an appropriate abatement that will help us finish this project the way it should be finished.”
The Development Authority’s former chairman, Eugene Walker, quit this month in the wake of the controversy over Sembler’s donations for his school board run. He had championed the additional tax break for Sembler while on the board.
The new chair, Judy Turner, couldn’t be reached for comment on Thursday. A spokeswoman for DeKalb CEO Burrell Ellis said he doesn’t expect a new tax incentive policy to be in place until at least October.
“He’s hoping Sembler is going to take full advantage of the ($20 million abatement) deal that’s already been presented to them.”
A prolific developer in Atlanta, Sembler has retail projects including Edgewood Shopping Center, Perimeter Place, and Lindbergh Plaza.
It announced Town Brookhaven in 2006, but the overall project was scaled back as the economy soured, with fewer apartments and retailers than originally envisioned. Fuqua said he expects to sign two more anchor tenants by the end of the year.