Selig Seeking Public Financing for Suburban Plaza “Urban Store” Redevelopment
Decatur Metro | June 25, 2011Remember that story from a few days back about Walmart’s plans to open in Suburban Plaza? You do?? Excellent. But, do you remember the follow up where both the developer and Walmart were emphasizing that nothing was confirmed? OK, good!
Well, here’s another element of the story.
The Clairmont Heights Civic Association blog posts a letter from County Commissioner Jeff Rader who says that both he and Commissioner Kathy Gannon have met with Selig to go over their big-box development plans. Here’s most of Rader’s email to the CHCA president…
Selig has come in to vet their redevelopment objectives. A big box development is permissible under the existing C-2 zoning, but I got the impression that the space requirements of their desired building program and required parking would eat up a lot of space on their site if conventionally developed, so in order to retain shopping center strip that houses Big Lots, etc., they would like to do an “urban” store with underground parking at the corner of Medlock and N Decatur, where the thrift store and mattress outlet are currently.
This would cost them more than a conventional layout and they are therefore suggesting public financing assistance for underground parking and the renovation of the facade of the remaining shopping center strip.
Commissioner Gannon and I listened without making any pronouncement on the project, and will be interested in what they might propose when next we meet. Any action by us or the Development Authority of DeKalb County to assist them with financing would require a public process, but again, provided they meet the requirements of the current zoning, no discretionary decision is required to build a big box store.
An urban store in Suburban Plaza? Won’t that rip a hole in the space-time continuum or something?
Latest from Decaturish
Over Winnona Park Stud’s dead body.
Thoughtful response. Thanks.
JohnH,
Winnona Park Stud would be happy to sit down with you and expound on the reasons Winnona Park Stud believes our tax dollars can be put to better and higher uses than subsidizing the development of the Selig Company. You pick the time and place, and we will chat and Winnona Park Stud will provide the nuanced outlook on the pros.Anderson cons you’re seeking.
Actually, this sounds pretty good to me. It is going to take some sort of big traffic generator like Walmart or Target to revive SP. The only big box underground parking I am familiar with is IKEA, and it certainly seems to work well there. Better security too. If something like this does happen, along with a mall facade makeover and streetscape improvements, I don’t think it will be long before a new tenant is found for the old Winn Dixie space… a tenant more to the liking of some of the big box haters.
As much as I enjoy browsing a thrift store once in a while, I have always thought that their presence was a death nell for a shopping center. I suspect they can only pay minimum rent, which says management is a little desperate.
More than one Atlanta area Walmart exists with underground parking. The two where I have shopped are at Lindbergh and in Chamblee on Peachtree Industrial. They work quite well – escalator or elevator up to store level with limited exposure to weather. And then the Edgewood center with Traget, Ross & B,B&B has a similar design.
That’s a Target at Lindbergh but yes point taken. Target has done structured parking a ton. Keep in mind a parking deck typically costs on average $20,000 per space. Paving a lot obviously costs a small fraction of that.
Probably the best example of this and what sprouts up around it (other stores/managing traffic) is the Walmart at Howell Mill Road.
Public financing? For one of the richest, most successful corporations in the world? Are they crazy?
I agree, but the point that public support would make the developer more beholden to community needs is also important. All they’re really looking for is some guarantee on the bonds that would enable a lower interest rate. Which, if they pay off the bonds on time (which they would unless either Selig or WalMart go bust) is not a problem.
The game they’d play is to try and do the bonds under the name of the property, so if at some point WalMart changes its corporate strategy they could walk away and leave the County holding the bag. You need to prevent that.
I agree that the incumbent commissioners aren’t the folks to be trusted on this. And I also think that this is what you get when you failed to annex the area into the city of Decatur.
“And I also think that this is what you get when you failed to annex the area into the city of Decatur.”
Touche!
And if DeKalb throws in some financing dollars then the annexation on that segment of city limits is dead.
As for the idea that Wal-Mart was asking for taxpayer financing being crazy, Wal-Mart never said it wasn’t crazy; they did say they were Wal-Mart.
All they’re really looking for is some guarantee on the bonds that would enable a lower interest rate. Which, if they pay off the bonds on time (which they would unless either Selig or WalMart go bust) is not a problem.
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Is this right? I read “public financing assistance” to be more than a loan guarantee. If Wal-Mart is truly involved, I doubt they’d care about a loan guarantee, because (a) WMT would have little need to finance this in the first place, and (b) without checking, I would bet that WMT’s credit rating is higher than DeKalb Co’s and it can already borrow at lower rates.
No, DeKalb rates would still be lower because they would be issued as tax-free municipal bonds.
Right, but that wouldn’t apply if the county simply guaranteed a loan to Seelig or WMT. In that case, no bonds are issued, you’re just using the County’s credit rating as a backstop. This may not be the actual plan, of course. Maybe they are talking about a bond issuance, who knows.
Either way this is a horrible idea. I just checked and Wal-Mart has $7.5 billion in cash on its balance sheet. DeKalb Co., by contrast, is talking about a 4 mil tax increase to fill a huge budget shortfall.
The bonds would not be issued on behalf of Wal-Mart, they would be issued on behalf of Selig, the developer. Wal-Mart again is not stupid when it comes to business – they want the developer to assume the risk.
Surely, after funding the legal profession so well these years, Dekalb could spread some taxpayer love to the developers.
After all, they’re just swimming with extra money these days. If there’s not enough, just tack on another penny sales tax, ’cause nothing attracts retailers like a big sale tax.
Actually, the public financing angle could be used by the community to exercise some control over the process. For instance, if Walmart wants to prohibit another food store from entering the mall (the old Winn Dixie space), approval could be contingent on their waiving that.
DeKalb taxpayers subsidizing a Walmart is absolutely the wrong way to go. Up in the DC ‘burbs, Montgomery County (Maryland) dangled a $4 million incentive for Costco to come into a similarly struggling mall despite major money issues in the county. The Washington Business Journal reported on how the County would be paid back for the investment:
http://www.bizjournals.com/washington/blog/2011/04/nine-years-to-recoup-4m-for-wheaton.html
I’m with you, David. I’d be dead-set against any sort of public financing to help built a WalMart. The company is one of the richest on the planet, for one. I don’t see Suburban Plaza as that big of a blight in the community. I shop at Big Lots and the thrift store all the time, for example. I think there are much worse areas.
Plus, what’s the advantage to the community of helping to finance this? WalMart jobs are extremely low paying, and they will draw dollars out of the community that will go to Arkansas, and away from private store owners who live and work and invest here.
“No discretionary decision is required to build a big box store,” so the property owners are seeking alternatives because they don’t want to build a big box store. Furthermore, it’s not in their interest to deliver something the community doesn’t want.
And yet, there is the threat that they can and “just might” do something the community would not appreciate. It’s a tired game.
Gannon and Rader have bought into this game and repeatedly leave the citizens sharply divided. Had enough? I have.
Give me a break. The property is zoned for a big box. The Board of Commissioners are out of the decision loop if Selig or Wal-Mart don’t seek a zoning change.
The Development Authority of DeKalb is an independent body that can act as it sees fit. Neither the CEO or the BoC can control decisions by the Authority to issue inducement bonds.
Whaht are Gannon and Rader suposed to do?
Perhaps I blew the whistle a little early? That’s what a reputation will get you.
I didn’t understand you as offering anything contrary, but please feel free as I will try not to disrespect your opinion.
What are they supposed to do? Oh, I think they’re supposed to operate with the understanding that they don’t know what’s best for everyone else.
I believe it is time to run other candidates for their positions. They are obviously for the developers, not the citizens of DeKalb.
Development = additional tax base. It’s a bottom line issue and that is for the citizens of the county to grow the tax base. I’m not saying I fully agree with that but it’s important to see it from all angles.
Public financing for Wal Mart and Selig?
Umm … no!!!!
Walmart has an old bad habit of going in very close to it’s other stores to prevent competition moving in and then in a few years abandoning that site and holding the lease. I want Trader Joe’s!!
If they can’t afford to pay to develop the property,I don’t want to pay for it either.This feels similiar to Sembler on North Druid Hills.They wanted to make that a TAD,so taxpayers could help pay .
Get on their case Now! Even then it might be to late because the unstated thing here is how much and of what the commissioners will get to help this move along. Let them know their jobs are the line and money won’t help them.
Public money? Forget it!
Chewing 10d nails just imagining this.
If we want to let our public officials know how we feel about this issue, whom should we contact? The Decatur City Commission? DeKalb County officials? Is there a development authority or a planning board?
Thanks.
That would be the DeKalb County Commission and the DeKalb County Economic Development Authority http://web.co.dekalb.ga.us/decidedekalb/ed-dev-authority.html
Selig owns the property and would like to make some money off of it. It is underutilized. They could put a regular ol’ walmart there and make some money. Or they could put an urban walmart there and make more money, but doing so is more expensive. The comment was made about why we would subsidize one of the richest companies in the world. Walmart is successful because they have all the leverage and won’t pay the rents that Selig (or any other landlord) would require in order to build underground parking. They have their land suppliers by the b___s just like all of there other suppliers. Public money may not be the answer but perhaps there are other creative solutions – how about density bonuses on the remainder of the property if Selig builds the deck? Or how about Dekalb kicks in for the parking if Selig builds a new library or theater on the site? If we want to influence how private owners develop their property we have to be creative.
Soooo… if we don’t want another Walmart within a stone’s throw of Decatur… we don’t support this b/c Selig will be forced to set rents so high that Walmart won’t pay them.
Do I have that right?
Hmmmm… not supporting it sounds like a win/win to me.
Walmart sucks.
No. It just means they will build a standard (rather than urban format) walmart in a sea of parking, which they can do under their current zoning.
Standard Walmart is allowed by current zoning but I wonder how real a threat that is. Do they want to put another standard store here so close to the one in Avondale ? Selig certainly wants to be able have tenants besides Walmart on that property.
Walmart is eager to spread the urban store concept The threat is good as a leverage tool but I’m not sure they would actually build a standard Walmart if turned down for public money incentives on the urban format.
I wonder what kind of leases are in that other building – Big Lots, Hancocks , Suburban Lanes ,etc? May be very difficult/expensive to buy them out to level that building for a regular Walmart .
If we are to have a Walmart at Suburban Plaza, I’d certainly rather it be an urban concept store but I don’t think the County should rush into subsidizing it.
“They could put a regular ol’ walmart there and make some money. Or they could put an urban walmart there and make more money”
Urban concept stores make more than standard Wal Marts? Am I reading that right? I don’t think I believe that.
My reasoning is that they would make more money because less of the site would be taken up by surface parking, allowing them to put additional retail or other uses on the property. From a developer’s standpoint, that’s the case for density.
Nobody’s asking the most important question: What happens to the bowling alley?
It sounds horrible on first glance, but the details may not be so bad. It is not likely they will default on their bond payments and if the community gets a bigger say in what is put there, that is a good thing. That corner really needs some TLC.
Oh, why can’t Trader Joe’s move in there and make everyone happy!
That said, I wouldn’t mind a public subsidy for a big box store if it were Costco.
Is annexation off the table? I believe the City still has an interest, but that is me just speculating.
Something unclear to me is, if the area has value in terms of tax revenue, why would the County be willing to let it go? Or do they have any choice if the property owners agree to annexation? I understand why residents would approve annexation to Decatur–better schools and services perhaps. But why would businesses approve it? Obviously I know nothing about annexation, property taxes, business interests, etc. but maybe I should learn.
Trader Joe’s would not make me happy. It’s boxed processed food, just like its sister store Aldi. I don’t understand why people assume everyone likes that. I also don’t understand why public policy about public financing would be decided by someone’s opinion of what a worthy recipient is.
Frankly, these corporations all scream about their divine right to an unfettered market but want public financing to get that access. Completely illogical.
Agreed, Trader Joe’s is little more than all the worst crap in the middle aisles of regular grocery stores, but at lower prices and hipper cashiers.
Yup! Their stuff is loaded with salt, fat, and preservatives. But because they sell curry and tofu the hipsters are ok with it. Please. Familiarize yourself with your own kitchen. Support your local growers!!
Trader Joe’s would not make me happy. It’s boxed processed food, just like its sister store Aldi. I don’t understand why people assume everyone likes that. +1
I also don’t understand why public policy about public financing would be decided by someone’s opinion of what a worthy recipient is. +1
I had to dig for this comment but it tickled me so much last time I read it, it was worth it!
“lumpintheroad says:
June 14, 2011 at 11:42 am
Decatur, I love you, but you talk about Trader Joe’s like that ex-boyfriend who married someone else eight years ago, but you’re still SURE that any day now he’s going to leave that smug bitch and their three conventionally adorable kids and come back for you.
You’re better than this, Decatur. Clearly, Joe has moved on. So should you.
And you probably shouldn’t adopt that sixth cat, either.”
Yes, in case it hasn’t been said enough…Trader Joe’s has looked at the demographics of Decatur and the surrounding area and determined it just ain’t upscale enough. Look at every other Atlanta area Trader Joe’s.
Upscale or urban? The only metro-Atlanta Trader Joe with which I’m familiar is the one near Grady High School. I wouldn’t say the area is more upscale, but more urban than Decatur. More young adult shoppers. I see a lot of former students and interns from my various work lives. And the one I used to frequent way back when in Culver City, California was similar. I don’t think Trader Joe’s shopper are as likely to be the minivan crowd as Whole Foods or the traditional grocery stores. Some of Decatur is cooler than the minivan crowd, but many of us are not.
BTW- All the Walmart articles aren’t hooked together, the one with the 200 posts isn’t anyhow. May as well stick the DG ones to them as well since all the *against* arguments, are essentially the same.
There goes the neighborhood…
Pretty much the last thing large corporations want is a free market. Walmart in particular is known for attempting to restrict competition.
Given how flush with extra tax dollars our county is, why shouldn’t we subsidize a developer’s big plans for a store we don’t want in our neighborhood?
This idea didn’t go over so well in the Chamblee/Brookhaven area – the taxpayers spoke up, and lo and behold, the development got built WITHOUT the subsidy.
Might want to head over here before listening to all the wonders of having a Walmart that no doubt you’ll be hearing in the coming months.
http://walmartwatch.org/blog/archives/walmart%E2%80%99s-broken-promises-coming-soon-to-a-district-near-you/
With the economic drivers that would come with a redevelopment such as: new jobs at the center, the construction jobs while it’s built, the increased retail sales and the higher RE tax basis maybe Dekalb County could come closer to meeting its budget.
Possibly there is an argument for superior alternatives for the county’s financing priorities, but I’m having trouble seeing this proposal as the “horrible idea” or similar descriptions here.
The proposed financing, which I believe would come in the form of a credit enhancement, can be structure so that Dekalb County no tax dollars are used and the county receives fees at origination and a piece of every bond payment. Where’s the downside other than a financially unsuccessful development?
My hope is that Walmart (or whatever its equivalent would be–likely some other hate-able big box that would draw lots of traffic) can be a catalyst for improving that area. As to who pays for what, this is business, let’s negotiate!
Those of us on the OTHER side of the intersection would be happy to be able to get groceries nearby, perhaps without having to drive. We have a lot of long-time older residents who may be able to remain independent (“age in place” y’all!) for a longer time if they could do their shopping nearby. Which brings me to the insanity that is the N. Decatur Road / Lawrenceville / Medlock intersection. What if a Suburban Plaza development came with a way to make that intersection more functional for pedestrians? What if we got a sidewalk on the Medlock Rd. side that connects to Church Street so one could walk or ride to City of Decatur safely? Might the PATH Foundation be interested in this area to safely connect its paths in City of Decatur to the paths its developed around Medlock Park and Mason Mill?
Suburban Plaza is not going to turn into green space: it’s a commercial lot that is expected to make money for its owner. It needs a big magnet store to draw customers, which in turn will entice other businesses into the area. I don’t know if Walmart is the key to turn this thing around but I’d hate to squander an opportunity with NIMBYism before we find out exactly what we could be getting out of this.
I get the point about negotiation for concessions that add value for the community. Anything substantive, though, would take serious focus and cooperation on the part of County Commission members. I question whether they’d be able work together in an open, reasonable manner for this type of negotiation.
Even if they do hammer out a good deal in exchange for developer incentives, I wonder if the County departments involved would properly monitor the project to make sure all is completed as agreed. Seems like most of the County departments are short staffed and inefficient.
A government that is having to consider a pretty major tax hike to stem a so-called fiscal crisis has no business guaranteeing the debt of one or more highly successful private businesses. I don’t know much about Selig’s balance sheet, but WMT has more than sufficient liquidity to finance this project. If WMT wants a parking lot, it should build one. If it doesn’t want to spend the money, then let it move along and Selig can find another idea. Or not.
The risk of an unsuccessful project isn’t just that it would fail and SP would go back to being a ghost town. It’s that if Selig goes Ch. 11, then we’re on the hook for all that debt. Then — whoops! — an already indebted, cash-strapped county is even moreso. Add to that: guaranteeing this debt, even without a default, would be a contingent liability on the balance sheet. And may I remind you, our fair county is just one notch above junk status right now, even without this deal included on the liabilities side of the ledger. http://www.ajc.com/news/dekalb/dekalbs-bond-rating-drops-890284.html. Fiscal compentence is not our leaders’ strong suit, to say the least.
It strikes me that taking on more liabilities under these circumstances is a pretty horrible idea, even if the deal generates some short-term income. And as for that income, I highly doubt that (a) Selig has any intention of paying a premium for the insurance policy it is asking the county to write or that (b) even if it is, that the folks running the county have any clue how to price that premium to reflect the risk. Then you have the issue of having reserves to cover the liability. An insurance company would have the reserves. The county does not. Because it is not an insurance company.
Bump and thank you.
I am still too consumed with grief over the loss of pep boys to even comprehend something else at suburban plaza.
I miss Pep Boys too.
So all powerful and rich Wal Mart and well to do developer, Selig, want us to pay for a parking deck.
Sure just as soon as you help me re-paint my home.
Why all the vitriol directed toward Commissioners Gannon and Rader.? All they did was LISTEN to the proposal with an open mind, RESERVE JUDGEMENT pending further information, and RESPOND to an inquiry from CHCA regarding the proposal.
Is any of that inappropriate?
None of that is inappropriate. However, this county has a history of big giveaways to developers. And the county is broke.
Development money should be reserved for local citizens trying to start a business and clean up blighted areas for development. WalMart is neither local nor needy.
The flip side is that a Wal-Mart will generate a ton more tax revenue than small start-up businesses or most mixes of thrift, mattress or dollar stores. I’m emotionally against the idea of public subsidizing of private business but understand that sometimes ya gotta play the game. The county should only get involved financially if it’s clear that Sub. Plaza will continue its decline without it and it sees a clear path to recouping any subsidies in the not-too-distant future.
Suburban is a quirky, funky shopping area. From trophy shop to uniform shop, antiques to sewing supplies and then there’s Last Chance and Picadilly. Sure there are empty storefronts, but that is the case everywhere. The funkiness can be saved and space filled if Trader Joe’s comes in instead. Don’t think many neighbors would oppose Trader’s Joes. And those heading toward Hwy 78 could shop on their way home.
Walmart could build less than1 mile away at the empty, rundown Ford dealership – already an eyesore. With an additional traffic light on L’ville Hwy and a light on Church St access would be good without adding congestion to an already congested 6-way intersection. All adjacent properties are commercial already. The condo’s across L’ville Hwy would benefit from the traffic light as well.
I can see no benefit to a Walmart at Suburban as there are already multiple Walmarts close by. Chamblee at PDK, Memorial Dr at Columbia, Tucker at Lavista & L’ville Hwy and Hwy 78 (for those leaving the Clifton Corridor headed out to St Mtn, Snellville and Lithonia).
Walmart could build less that 1 mile away at the empty, rundown Ford dealership – already an eyesore. With an additional traffic light on L’ville Hwy and a light on Church St access would be good without adding congestion to an already congested 6-way intersection. All adjacent properties are commercial already and the condo’s across L’ville Hwy would benefit from the traffic light as well.
Suburban is a quirky, funky shopping area. From trophy shop to uniform shop, antiques to sewing supplies and then there’s Last Chance and Picadilly. Sure there are empty storefronts, but that is the case everywhere. The funkiness can be saved and space filled if Trader Joe’s is allowed.
Dekalb is raising the property tax rate to compensate for property tax revenue lost due to lower appraisal values. The area surrounding Suburban is one of the few areas to not suffer significant loss in property values. SO… drive the appraisal value down nearby so less property tax revenue collected and use public funding to assist a major corporation in driving adjacent property values down. Does anyone besides me see the contradiction.
Walmart at Suburban is a lose / lose situation for everyone except Walmart and Selig.
oops – small viewing of comments led to double paragraphs when posted. message is good if not the editing.