A company developing a commercial project in the Brookhaven neighborhood has lured four anchor tenants to sign leases – without a significant county tax break the company has sought for several months.
Sembler, a Florida development company, signed leases with LA Fitness, Publix, Costco and CineBistro movie theater/restaurant each to 20-year leases, said Angelo Fuster, a company spokesman. For months, the company’s Brookhaven project has been the center of controversy and indirectly contributed to the county Development Authority chief’s resignation last month.
The company also continues to pursue a deal with the county that would provide them with a significant tax abatement, which Sembler officials say is crucial to financing and finishing the project.
“Despite the economy and the uncertainties of financing, we are moving forward… even without having settled the issue of tax relief, proceeding in good faith, believing that the county will be fair in dealing with us,” Fuster said.
Sembler’s vision for the project, known as Town Brookhaven, includes big-box retail stores, restaurants, boutiques and more than 1,500 residential units. The company is already in the process of building two residential units and preparing site work for the retail portion, but the economic recession has jeopardized the rest of it, and Sembler claims it needs the tax breaks to finish.
Sembler hopes to sign leases with two more anchor tenants and approximately 40 more small businesses for its Main Street area, Fuster said. The anchor stores should open in 2010 in the 600,000-square foot retail development on Peachtree Road near Oglethorpe University.
The Development Authority had already approved an abatement worth about $20 million over 10 years when Sembler asked to expand it several months ago to one valued at more than $40 million over 20 years. The proposed abatement angered some local residents who said they believed the county was handing over tax revenue to Sembler. Company officials countered, however, saying they were taking tax revenue that wouldn’t exist unless they build Town Brookhaven, which they claim cannot happen without the abatement.
At the same time, Fuster said, the development will create more than $181 million in sales tax revenue and other fees over that same 20 years and more than 1,000 jobs.
“All the independent financial people [agree] with us – that there [is] a financial benefit to the county,” he said.
Eugene Walker, a school board member, chaired the authority until late last month. He said he resigned from his post Aug. 18 because he didn’t want to further distract his colleagues after many residents complained of his dual role as an authority and school board member.
Walker’s school board campaign received more than $21,000 from Sembler last year, according to state records. The proposed deal between the county and Sembler is on hold until the county settles on a series of guidelines for granting tax breaks to developers.
Walker said because he disclosed the campaign contributions, he did nothing wrong. He will remain in his District 9 school board seat, he said.
The General Assembly created development authorities, including DeKalb County’s, in 1974 to promote trade, commerce and job growth. The quasi-governmental body can package bond financing for companies based on the number and types of jobs produced.
Authority members could not be reached for comment.
The county has released a draft of an economic stimulus policy that would guide the authority in what sort of breaks it could grant developers. The county is not expected to finalize that policy until later this fall.
When it is finalized, depending on the policy’s terms, Sembler may ask for a smaller abatement, Fuster said.
“In this economy, the smaller businesses are having a real difficult time getting financing, not just to rent but to design the interior of the buildings and put their imprints on things,” he said. “They cannot get [loans] on that. They’re turning to us. That’s one of the things that the tax abatement would help us do.”