I spoke at the Newnan City Council Meeting of July 25 in opposition to the proposed 350 apartments and commercial development by The Residential Group.
I wanted to clarify for your reader’s one of the points I made at the meeting that was covered later by the article appearing in the Times-Herald on Monday, July 29.
Congress passed the Jobs Act of 2017. The Opportunity Zone Tax Credit was one of the items included in the Act. 260 Census tracts in Georgia were identified as meeting a poverty and low income metric. There are two census districts in Newnan/Coweta that meet this metric and qualify for this credit.
The RD Cole/Caldwell Tanks property is located in one of these areas and qualifies for this tax treatment. Many yet to be developed properties throughout Newnan and Coweta County also qualify.
There is nothing exclusive about this parcel of land. At the meeting, I asked the representative of The Residential Group to state if his group was planning on applying this tax credit to the proposed apartment and commercial development? His answer to my question was yes.
Why is this important? Because one of the features of this tax break is the entity applying for the credit must keep ownership of the entire project for a period of 10 years in order to pay no capital gains taxes on their project when they sell it. This is the reason and purpose of selecting the location at the former RD Cole/Caldwell Tanks property for 350 apartments and small amount of commercial space.
They want to develop it for a tax break. That's fine, that's capitalism and it is legal.
What does this mean for us? The developer must retain ownership of the entire project until they sell it 10 years later. Nothing can be broken off of the master project.
Ownership units such as condominiums, townhouses and office condominiums are single owner units. If the developer were to build these and sell these single owner units, he loses his tax credit and will have pay capital gains taxes on the project. He will lose the primary reason for doing the development in the first place, his tax break for this development and the retaining the taxable profits from previous projects.
Should they keep the development entirely apartments and some small amount of retail, they continue to qualify for this substantial tax break. For us, it means that the city council and the residents of Newnan cannot influence or cause TRG to modify the proposed development to add condominiums, townhouses and office condominiums.
While wanting to modify the development certainly seems reasonable, it's simply not possible. It becomes an all or nothing proposition for the developer, the city and the residents of Newnan.
The city council and the city administration cannot negotiate to change the proposal. They can only vote yes or no. The citizens have asked the developer if he was willing to forego developing the 43-unit apartment building on the one-acre parcel across the railroad tracks in historic Cole Town.
He has stated to more than one resident on more than one occasion that if he did forego the one-acre parcel part of the development, he would simply add the 43-units to the apartment development in the master RD Cole/Caldwell Tanks site. This means that they are only interested in a 350-unit apartment development.
It's all or nothing. The bottom line is the developer wants his cake and to eat it, too. He wants his tax break and he wants all 350 apartment units. There is no room for compromise from his point of view.
Our choice is to determine what is best for our home town for the long run. We can build apartments pretty much anywhere in town. This is a special site in the very heart of town. There is nothing special or imaginative about the too dense proposed 350-unit apartment development.
Do we settle, or do we demand more? A good development of this property could be the Jewel in Newnan’s Crown. This development is just cheap, imitation glass. Don’t be fooled by it.