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Development authority rejects bond financing plan for Poplar Place

  • By Sarah Fay Campbell
  • |
  • Mar. 04, 2022 - 6:23 PM

Development authority rejects bond financing plan for Poplar Place

This rendering shows the proposed Polar Place multi-use development. The developers were seeking bond funding through the Coweta County Development Authority. Because the authority doesn’t incentivize residential or commercial development, the request was denied.

A request for bond financing for infrastructure, a parking deck, and the first office building for the Poplar Place development was soundly rejected Thursday by the Coweta County Development Authority.

The board voted 4 to 1 against partnering with the Barry Companies to issue bonds for the 42 acre project.

The developer also planned to seek designation of the project as a "special services district," which would have allowed revenue that would have come from property taxes in the development to pay off those bonds.

The SSD isn't exactly a "tax abatement," but a large portion of money that property owners in the development would pay as taxes or "assessments" would not have gone to the county, school system and city of Newnan, but would instead go to pay off the bonds.

But the SSD request was separate from what came before the Coweta County Development Authority Thursday.

Poplar Place is a mixed-use development proposed for a 42-acre tract of land along Poplar Road and Interstate 85, across from Piedmont Newnan Hospital.

The Newnan City Council voted in February to approve the annexation and rezoning of the land. The land is zoned MXD: Mixed Use Development. The proposal is for 450,000-square-feet of office space in three buildings, 101 townhomes, 155 "active adult" senior multi-family units, 350 apartments, retail and restaurant space, and a 140-key hotel.

The main reason for rejecting the bond financing is that is simply not what the CCDA does.

The authority members told Barry that the development authority doesn't incentivize commercial, retail or residential development, said Scott Berta, project manager for CCDA.

"They never have in the history of the development authority," Berta said. "Our job is to create higher-paying jobs and capital investment."

The request was for bond financing for all of the horizontal infrastructure for phase one, as well as the parking deck and surface parking, and one office building. According to the presentation presented to the CCDA, the infrastructure costs for phase one are estimated at $34.5 million.

That infrastructure would have gotten the site ready for the planned residential, commercial and office development on the site, Berta said.

While the CCDA rejected the current proposal, bond financing for a Class A office building and the associated parking deck is something the authority might support, Berta said. And Barry and his team were informed of that during the discussions held up to this point, he said.

They could come back at a future meeting with a new presentation, Berta said.

Barry said Friday that they will now move forward with Plan B, but said he wasn’t ready to release information about Plan B.

Authority member Norman Lundin had originally asked to abstain from the vote, Berta said. However, the authority’s rules don't allow for abstentions, so Lundin changed his vote to be in favor of the bond funding.

Barry said Friday that he was disappointed in the result. Several years ago, the development authority and chamber approached him and asked him to help bring higher-paying jobs to Coweta, he said.

That takes more than just building a Class A office building, according to Barry.

“Developing premier office space south of Atlanta is already difficult,” he said. "You can't do it unless you create something more than just an office building."

Before a Special Services District could be created, either the county or the city – and it's unclear right now which – would have to pass an ordinance allowing for SSDs, and then vote to create one for Poplar Place, according to Berta.

At the meeting, Barry and his team presented scenarios for an SSD lasting 30, 25 and 20 years. After that time period, the SSD would expire and taxing would go back to normal.

The SSD allows for the owner of the site to set their own millage rate, Berta said. The proposal is for a 33 mill tax rate. Currently, property owners in the city of Newnan pay a property tax of 26.876 mills.

For the first few years, all of the money generated by that 33 mill assessment would go to paying off the debt service on the bonds and building up a required reserve that can ensure debt service is paid if there is an issue, such as a downturn in the economy, according to Berta.

Once the required reserve is built up, revenues beyond what is needed to pay the bonds each year would go to the county, city and school system, according to Berta.

“Essentially, it would function as a 100 percent tax abatement for the first several years,” Berta said. “Then, once the reserve fund has been built, structures have gone vertical, and there is increased value, the city and county and school system would begin seeing revenue from the difference.”