By BRENDEN SAGER
The Atlanta Journal-Constitution
Published on: 07/25/05

Marietta officials are moving aggressively to spawn city-financed private redevelopment projects near the historic Marietta Square.

But two recent votes show the city’s leadership is divided on how fast to move ahead. Earlier this month, Mayor Bill Dunaway cast a rare tiebreaking vote to give local developer Wes Godwin $400,000 to fund unanticipated costs in a condominium development.

That vote, along with a 4-2 vote to provide developer Marty Littleton $660,000 for his duplex redevelopment, exposed fissures on the Marietta council over criteria for giving tax dollars to real estate investors. The investors say that without the public money, their projects would not move forward and the city would lose economic development, new homeowners and new jobs.

In the coming months, Marietta is expected to approve several site plans for projects that will drastically change the downtown.

The City Council will choose contractors to build multimillion-dollar projects. It also could give large sums of tax dollars to developers to get these projects moving, or to fund high-quality development. But the scope and speed of the city’s activity have made some residents and county officials uncomfortable.

Godwin received money from the city for several construction expenses, including demolition and debris removal of a longtime abandoned taxicab garage. In its place he’s building the 32-unit Marietta Mill Lofts condominium. The $10.4 million, four-story structure will be on a bluff with views of downtown Atlanta.

Littleton received money to rebuild 17 run-down World War II-era duplexes as single-family homes with a total market value of about $9.6 million. Littleton will use the funds to move utilities, build sidewalks and locate driveways behind the structures. Both projects are close to the Marietta Square.

The money for Godwin’s and Littleton’s projects comes from a tax allocation district. The districts work by financing bonds with future tax contributions from redevelopment. Tax values are frozen at current levels, and the bonds are repaid with property taxes generated by increased values that come with redevelopment.

Traditionally, tax district subsidies are agreed upon before construction. However, both Godwin’s and Littleton’s projects broke ground months ago.

Councilman Pete Waldrep voted against giving them tax funds, saying that providing tax dollars after construction commences could result in similar requests from future developers.

“You’re telling people, ‘Plan your project, but — oops — if you make a mistake you have the ability to come back to us,’ ” Waldrep said.

Councilman Philip Goldstein supported the measures because the projects were among the earliest redevelopments in the city, and therefore faced higher risks of failure.

“The first projects out of the box are generally the most difficult,” he said. “I’ll look at each of these on a case-by-case basis.”

Cobb County Commission Chairman Sam Olens said he was concerned Marietta could “set a dangerous precedent” by giving out redevelopment dollars after projects commence. Olens’ opinion didn’t count in the recent City Council votes, but the County Commission will have a say over adoption of future tax districts. Within a tax district, all the local boards that levy property taxes must vote to pledge their portion of taxes toward the district.

In Marietta, about 10 percent of most residents’ property taxes go to the city, 60 percent to the Marietta school board and 30 percent to Cobb County. That means if the county and school board don’t support the district, the city loses 90 percent of the district’s potential to fund redevelopment.

Some Marietta residents fear the city is moving too fast.

Sam Elliott said city officials promised that affordable housing would be included in city-backed redevelopment projects. He said in more recent proposals, affordable components seem absent, with the lowest home prices about $160,000. Elliott defined affordable housing as homes costing no more than $140,000.

“By that standard, affordable housing is now off the table,” Elliott said. “I think that our city leaders should have the integrity to say that’s not going to be the priority in these projects.”

Elliott said the city’s redevelopment objectives — beyond economic return — aren’t clear to the public.

“I don’t think there’s a guiding principle behind [redevelopment], but there should be,” he said. “You don’t get halfway across the ocean and determine which course you’re going to take. You have to have a clear heading in front of you.”

Voters in three other Cobb cities — Acworth, Powder Springs and Smyrna — also approved tax districts, but those cities’ councils have taken a go-slower approach.

Acworth’s Super Target shopping center is under way, and Mayor Tommy Allegood said recently that developers have requested tax district funds for other projects and the city has refused them. Powder Springs is reviewing developer proposals for its single downtown mixed-use retail and residential project. Smyrna has yet to announce a tax district project.

In contrast, Marietta has five projects in different stages. In June, developers proposed two more, and the city is studying ways to extend the borders of the current tax district to accommodate them.

Gary Eubanks, president of Wharton Management Inc. and a retired lawyer and manager of a row of downtown Marietta retail and office buildings, proposed one of the new sites.

Eubanks has proposed building a $10.4 million office building on the site of an old warehouse and parking lot, just a block from downtown. He billed the Atlanta Northern project as the first “Class A” office space near downtown in 25 years.

Eubanks also has requested a $600,000 tax subsidy that, he said, would make or break the project.

“If the [tax district] isn’t approved, nothing happens — it stays a parking lot,” Eubanks said.

Eubanks said the money is justified because intown developers face increased costs compared with their suburban competitors.

Eubanks said the tax money would pay to move utility and sewer connections that converge in a dense thicket at a busy intersection.

He said he’s also taking a risk on bringing high-quality office space to Marietta.

“It’s a fairly expensive proposition. The [tax district] is a way of leveling the playing field . . . with office developers in west Cobb,” he said. “There’s a market for Class A, but it’s hard to know the depth of it.”