$330M Atlanta Project Reaches Milestone
- Feb 01, 2019
The $330 million mixed-use Star Metals Atlanta project under construction in the city’s West Midtown neighborhood has received approval from the Development Authority of Fulton County for a 10-year tax abatement that will begin once the buildings are completed. Star Metals Atlanta will have multifamily housing, offices and a boutique hotel on the 5.4-acre site.
The abatement, which will not begin until the certificate of occupancy is issued for each of the buildings, helps slightly reduce the operating cost of the buildings in the early years, while they are being stabilized, Nathan Hedges, director of development in Georgia for The Allen Morris Co., told Commercial Property Executive. It is the first time the 60-year-old company, one of the largest real estate firms in the Southeast U.S. specializing in commercial, multifamily and mixed-use developments, has used this abatement.
Hedges said the Title for Bond uses a portion of the increased property taxes from a new development to provide a tax abatement once the project is delivered and gives it back to the developer as an incentive. The deal calls for the firm to give the title to the property to the development authority for the 10-year term.
“We pay them $1 a year for 10 years and effectively lease our property back from them during the term of the incentive,” Hedges explained. He noted the current city and county tax bill on the property is about $56,000 a year but will increase to approximately $3.5 million once the development is up and running. The abatement starts at 50 percent on year one and decreases by 5 percent each year until the 10-year term is up.
“The Title for Bond is a testament to how valuable this project is, and we are grateful to the Development Authority of Fulton County for their support that enables us to move the project forward,” W. Allen Morris, chairman & CEO of The Allen Morris Co., said in a prepared statement.
Creating jobs and housing
Morris noted the project is anticipated to create 1,945 permanent full-time and approximately 3,000 construction jobs. It will also expand the city’s tax base and channel more than $92 million to Minority Business Enterprise (MBE)/Women Business Enterprise (WBE) firms as well as increase workforce housing.
Located at 1050, 1055 and 1005 Howell Mill Road, Star Metals Atlanta will feature 227,000 square feet of Class A, creative office space with green roofs and tenant terraces on each floor, 55,000 square feet of retail with dining and entertainment offerings, a 155-key luxury hotel and 409 one- and two-bedroom apartments.
Hedges said the residential and office buildings will be completed in the second half of 2020. The independent boutique hotel will deliver around mid-2021.
In June, IWG-owned Spaces, an international, full-service co-working firm, agreed to take 56,121 square feet in the office building. Spaces will lease the seventh and eighth floors of the 14-story office building. It will also have a 5,642-square-foot ground-floor reception area and a private business club.
Images courtesy of The Allen Morris Co.