City: Callaway Development “Reflects Priorities and Safeguards”
Decatur Metro | February 20, 2017 | 11:05 am
With the recent demolition of the old rusty, asbestos-laden DeKalb County Callaway Building, the City of Decatur is taking a moment to consider the bigger picture, noting that the coming Cousins’ development embodies many components of the city’s planning efforts.
Posted by Deputy City Manager Hugh Saxon, the article includes many interesting facts about the project. Here’s a summary:
- Office Space: “It will include 329 residential units, 65% of which are studio and one bedroom dwellings; 18,000 square feet of retail space; and Decatur’s first new office building in over 20 years, providing 33,750 square feet of Class A office space.”
- $$$!: “the project will finally return the site’s 4.7 acres to the city’s tax rolls, reversing DeKalb County’s tax exempt status that’s been in effect for the past half century.” That’s approximately “$560,000 a year to the City Schools of Decatur and $280,000 a year to the city’s General Fund”
- Trees: “137 native trees…Featured species will include Oaks, Elms, Hornbeams, Dogwoods, Hemlocks, and Cedars, among others.”
- Bikes: project will be “bordered on three sides by dedicated bicycle facilities”.
- LEED: “…downtown’s first commercial project to comply with the city’s high performance building ordinance.” The development is currently seeking Silver LEED certification, with a hope of Gold.
- Public Plaza: “The N. McDonough side of the project will feature an internal public plaza with fountain, fronted all around by commercial and live/work spaces and allowing for pedestrian access across and throughout the site.”
The article concludes by noting that the project is on track to be completed in two years, in Spring 2019.
I remember when it was promised that Alexan 333 would include bike lanes along Commerce. Those never appeared. So I assume that at least some of this stuff will never materialize and is instead just PR to make the project seem more acceptable to everyone.
Those lanes are coming, it isn’t just PR. They are doing a cycle track. See the Path/COD master plan from a month ago
D’oh! Just beat me! 🙂
Actually, the Alexan bike facilities are still on. They were going to install a bike lane but then the local bike community got involved and worked with the city to upgrade it to a separated cycle track. Those plans are now fairly complete and funding is being sought to build the track from city hall to Commerce and then on Commerce all the way to Church St.
I will be forever disappointed that the city did not buy this property. I believe this is such a missed opportunity for the city. It would have been the perfect space for the high school to expand as well as provided much needed green space for downtown Decatur. The last thing this area needs are more apartments and office space. McDonough is already a huge traffic jam and I can’t imagine the terrible traffic after this project is completed. This space could have been something great. What a shame.
Actually, the city did buy this property. In order to make this development happen. I’m happy that this property is going on the tax roles. We need to increase density downtown and in our commercial districts to help off-set the tax burden on single family homeowners. I’m optimistic that, if executed properly, this project can be something great.
And by the way, since it’s easy to pick up flak on here if you are in public service, I’ll say thank you to our city leadership for doing what they’ve done to turn this true burden of a property in the middle of our downtown into what will hopefully be a true asset for the next generation. The city fought hard to get the appropriate development done here, and they got one of the most respected development companies in America to do it. Our leadership did it because they’re sticking to the plan that has guided us for a generation. The plan that laid the ground work for Decatur’s success. It’s actually quite a great story. I’ll forever be grateful.
I agree. The high school is doing fine on the current footprint. We need more athletic facilities, but the Callaway property is too valuable for that purpose. I’d love to see a complex out at the UMCH like Paideia has in Avondale. With a track!
tax *rolls
This is not a question born from skepticism, but an open question to commercial real estate people — does the downtown area need more class A office space?
Do 315 West Ponce, 755 Commerce, and others constitute class A? It appears to me that every major office building in downtown always has a “space for lease” sign.
I really have no idea. For those in the know — what is the occupancy rate of office space in downtown? Is there demand?
No idea about the current vacancy rates, but there is little, if any, space that qualifies as Class A. Most of the office buildings in CoD are showing their age.
Thanks. I was wondering how much is “class A.” I don’t know how much is reality vs marketing (i.e. everyone wants to say it is)
Also, it’s fairly common for a large office building considered fully leased to have 5 or 10 percent of its space in flux at any given time — coming up for renewal, odd spaces, etc. That’s why they tend to erect a permanent sign. They don’t want to be turning away any prospects without talking with them.
According to data from a reliable data collection firm, within a half mile radius of the downtown MARTA station there is 1.8 million(ish) sq. feet of total rentable office space. It’s currently just over 90% occupied. It’s been this way since the end of the recession. During the recession it was about 85% occupied. Average asking rents increased in 2015 from about $20/sf to about $23 and look to be stable since then. All of these numbers put us on par with most other office clusters in the region (some are more occupied and expensive, but we’re a bit above the median it seems). This all points to a healthy office market in downtown Decatur.
Very little, relatively speaking, Class A “spec” office space is being built anywhere in the region right now, due to tight commercial lending standards. Having new space within walking distance of MARTA and all that downtown has to offer will be a real marketing advantage for Cousins, who is building this. They will likely attract strong interest in this space. All the big new office deals lately show that a quickly increasing number of employers are seeking to locate in mixed use districts near MARTA – being near MARTA drives office demand – in order to attract top talent. There’s a similar sized office building going up near the Chamblee MARTA station. If Chamblee can fill a Class A office building, I think that’s a good sign for Decatur.
Also – this building is great news from an economic development standpoint. Sometimes you have to push the envelope and put a stake in the ground to attract new business. 30K sq. feet of office space should bring at least 300 new office workers to town. (Yes, I know there were county workers in Callaway previously so it’s not all net new). As Dawg Fan said, most of the space here now is old and built under a different office space paradigm. So having this new space should “grow the pie” of businesses in Decatur – that is, it will attract some companies that would not have looked to be here otherwise.
Slightly off topic, but what is the deal with the At&T property on the far western edge of the Dequator? I think it’s a training facility of something but it has a large campus with lots of beautiful trees, access to E Lake Drive, College, and MARTA. Has the city ever tried to acquire it?
There is also telephone switching equipment on that campus, which would complicate any transaction.
Correct. It is both a switching office and training center for employees all over the southeast.
What is happening with the Decatur housing authority property across commerce from the Calloway property. The city should buy it for free space downtown.
The Housing Authority needs to sell that property because it’s factored into the financing that’s paying for all their other units getting built/redeveloped. But from what I’ve heard, they’re relatively ambivalent about who buys it or how it ends up getting used. They just need the revenue.
There is a group working to preserve and promote greenspace downtown and, last I heard, they want a dedicated downtown park with a sizable green, but I don’t believe they’ve settled on a particular parcel (beyond the BOA site they identified originally that’s since been purchased by others) or launched any sort of capital campaign to fund the purchase. Worth checking out, though.
While the possible influx of new business to occupy the nice office spaces may be looked upon as a positive at first I think most residents who have lived here more than a couple of years are about to see a lot of what they liked about “small town Decatur” disappear very quickly in the coming months or year.
Sincere question: Our first downtown multifamily housing was constructed almost 18 years ago. In the years since, we’ve had 8 more large format projects come on line. What is it about this particular project that makes you think it’ll change downtown in more dramatic ways than all the other projects?
MrHogan – I would take exception to your assertion that this particular development, and this type of development in general, is unpopular among “most residents who have lived here more than a couple of years.” The idea of a dense mixed use development in the heart of our commercial district is nothing new. This is the type of development envisioned in the Strategic Plan in the early 1980s, which was reaffirmed in 2000 and again in 2010. There are plenty of us who have lived here for much longer than “a couple of years” who recognize that a more robust and vibrant downtown area benefits us in many ways, without negative impacts to the neighborhoods in which we live.
I sure hope that longer-term residents like us don’t try to drive a wedge between ourselves and our newer neighbors that may have only lived here for a couple of years. We were all attracted to Decatur for our own reasons, but in the end, we’re all here. We’re all Decaturites. And we all have have say in our future.
Hi Geoff, you wrote “We need to increase density downtown and in our commercial districts to help off-set the tax burden on single family homeowners.”
Could you please share how off-setting the tax burden on single family homeowners has manifested in Decatur with the increased density? Not sure I have observed any data supporting your statement although the concept is fairly straightforward. For example, the residential to commercial digest has been at an 85% to 15% ratio for numerous years (even after increased density). In addition, decreases in the millage rate are not announced as tax decreases due to increases in appraisals. Moreover, the recent passing of the school bond referendum, homestead exemption for seniors over 65, and any increases in city expenditures year over year all contribute to the tax burden on single family homeowners by decreasing the tax base.
Perhaps it is more accurate to state that increases in the tax burden of single family homeowners is not as great as it would be without the increased density.
Hi Marty – I don’t have exactly the answer you are looking for at my finger tips, although it wouldn’t be hard to figure out with enough time. I accept your last sentence. But think of this – the City’s current budget says that Decatur’s revenue from taxes is $25 million annually. If, in fact, this project pulls in $280K annually, that would mean that this one project will increase the City’s tax collections by over 1%. On less than five acres. In a city of about 2700 acres. So that’s a good bump in revenues on .2% of the land. It’s all about the economical and efficient use of land that adds jobs as well as “amenities” such as restaurants, and this case, even adds trees. And because we are blessed with mass transit and a walkable downtown, it doesn’t add nearly as many cars as one might fear.
If one is concerned about the school district’s budget, it works the same way. The best way to help pay for new school facilities without raising taxes on homeowners (to the extent that is possible) is to increase development density in our commercial core areas.
The key concept here is that dense residential is more cost-effective to serve than spaced out single family residential. Mixed-use is even more efficient to service.
Now, if we’re looking simplistic math on the tax impact, a question is how many students will this add? If it’s more than 80 it will be a net drain on the schools ($560,000 divided by $7,000 local contribution per student). It looks like there will be 115 apartments greater than one bedroom…..
The other benefit is that it will enhance the vibrancy of downtown. We just need to stop sacrificing traffic lanes for bike lanes while continuing to protect sidewalks and buffer zones for pedestrians.
Good points. And I’m glad the schools (and city) continue to monitor our new apartment projects for enrollments.
Prior to the opening of the Place on Ponce, The Alexan, and the ARLO, CSD established low end and high end projections — both of which were revenue positive for the schools — for the number of enrollments to be expected with downtown multifamily. The Place on Ponce is now almost fully leased and it’s my understanding that its number of enrollments, which are not inconsequential, fall within the projected range.
Of all the present projects, it could be argued that the Place on Ponce is the most attractive if you have kids, given the bulk of the project is on a quiet, residential street. That bodes well for future projects. If they remain within the projections, they’ll remain cash-positive for our schools.
I do understand that increasing enrollment presents other challenges (space and staff, etc.) that are beyond just a plus or minus bottom line analysis. Still, the premise we’ve been exploring as a community is that downtown development will pay more into the system than it ends up taking out in services. Now 10, large format projects into our experiment, that seems to be the case.
Thanks Geoff. Concerning economical and efficient use of land as it relates to low tax burdens (and also planners and leadership); the basic framework or concept in Decatur is that increased density is a primary mechanism for decreased tax burden on single family homeowners? Is this the correct? If so, does this framework apply to all municipalities or are there unique characteristics of Decatur that make the framework more city specific?
Also, from your comments it seems reasonable to assume that long term plans require a continuity of like-minded leadership and that is interesting.
One thing that affects Decatur more than many places to the low proportion of commercial to residential property.
Those are great questions, Marty. I can’t speak for the city leadership, but it is my firm belief that, yes increased density, in appropriate places, is A primary mechanism for easing the burden on SF homeowners. There are not that many other options in that regard that are acceptable to me, personally.
I would say that, in general, this is a mechanism that every city should be looking at to solve this issue. But, Decatur is unique from many other cities in that we have a large(ish) downtown district that was designed to allow for density. Many towns (think Duluth, for example) were never “urban” to begin with. Yet, they are pursing the “Decatur model” because they see the benefits. That is, they have created an “urban core” from scratch basically. Many other small towns are in the same boat of creating new town centers (Woodstock, Suwanee, etc.). So we are in a good position in that we have a town center that can “accept” additional density without negative impacts to our neighborhoods. We also have opportunities to insert higher density commercial into other current and future commercial centers – Oakhurst, East Decatur Station and East Lake are the ones I’m thinking of, mostly.
Not sure if you are familiar with StrongTowns.org? They are a leading voice for this type of thinking and I would encourage anyone to explore what they are up to for further examples and evidence of what I’m talking about.
As for continuity of leadership – I am a firm believer in the power of the people. I hope the public leadership, anywhere in our country, is taking cues from their constituents. What you’ve seen in Decatur is a commitment to a public process when it comes to the vision and the future of downtown. The original Strategic Plan was devised from public input, as were the subsequent updates. So I’d say that successful long term plans require a commitment to seeking and incorporating public input. You don’t need the same people sitting in the leadership chairs, but you need to have people that are committed to a continuity of the process.
The concept is sound that increased revenue via commercial taxes -could – be a primary mechanism to ease the SF tax burden in Decatur. However, there has to be a prioritization by leadership to apply this money toward reducing residential taxes,does there not? For example, priortization may be on increased personnel hires and associated costs completely consuming the $280,000 that Callaway provides to the general fund. This is likely the reason that you and others have thus far been unable to provide measureable outcomes or indices demonstrating that increasing commercial revenue via increased density is associated with a decreased residential tax burden in Decatur. In response, there is merit that the SF tax burden in Decatur is appropriate for the return on the investment, but that is a separate discussion.
Again, currently, the data does not support that increased density is decreasing residential taxes in Decatur. Therefore, when you or anyone proposes – “We need to increase density downtown and in our commercial districts to help off-set the tax burden on single family homeowners” it is misleading.
Would like to address the last paragraph concerning continuity of leadership a bit later.
I think a more appropriate statement would be “We need to increase density downtown and in our commercial districts to generate the revenue necessary to exercise our community values and priorities.”
These priorities could certainly include reduced residential taxes across the board. Or, they could be to further a social mission, as we did with tax relief for seniors. Or, it could be in quality of life initiatives (for example, green space acquisition such as the Methodist Children’s Home). Or personnel. Or service offerings. Or anything else.
The point is, you’ve got the revenue-in side of the sheet, which our existing policy initiatives and tax digest make fairly predictable, but then you’ve got the revenue out side of the sheet and that’s entirely political. Our years of strategic planning provide us a fairly clear picture of what our community values are but which ones get prioritized and funded is at the mercy of the political process. Which ties back, at least somewhat, to the idea of continuity of vision, if not leadership.
Being a community generating revenue in excess of obligations creates options. Which of those options are acted upon is in the hands of our elected officials, who are accountable to the collective desires of the community. But I can certainly say, as someone who works with communities large and small across the continent, that having meaningful options at your disposal is always a better position than not having them. Even if the process of allocating funds can be messy.
Your first statement is more appropriate but not completely accurate. While the commercial digest has grown with increased density and development, it has not grown relative to the residential digest. This is reflected in the lack of change in the 85-15% ratio of the tax digest; the residential digest is growing at a rate equal to the growth of the commercial digest. In essence, residential taxes provide 85% of the revenue necessary to exercise community values and priorities, which has not changed with strategic planning.
As evident, tax reduction is not a priority in Decatur, therefore any linking of commercial development/density with a reduction of SF tax burden is disingenuous and used as a narrative to increase support of density. This is problematic when issues such as gentrification are discussed and comments are made that increasing density will help offset the residential tax burden contributing to gentrification.
Thanks for discussion Geoff and Scott.
Since we’re all clearly adept at parsing, allow me to parse just a tad more…
You say “In essence, residential taxes provide 85% of the revenue necessary to exercise community values and priorities, which has not changed with strategic planning.” I question whether that can be said definitively. What it could equally show is that strategic planning has allowed downtown (et al) commercial to maintain its value in relation to our residential, which has been increasing for a different set of reasons.
In short, CSD has been a big driver of home values. One could speculate that our neighborhoods would still have had a significant uptick with our without downtown redevelopment, based on the strength/reputation of the schools alone. Thus, with no strategic planning or intentional efforts to create/recreate downtown as we have, we could reasonably speculate that the relative value of our commercial might have fallen. Perhaps the split would’ve become 88/12 or 90/10.
From an advocacy standpoint, I try not to directly link an increasing tax base with residential tax relief, for the reasons you mention. But I do link its possibility, because we all know that these kinds of pursuits can get traction very quickly with the proper wherewithal. Just look at the school tax break for seniors. It was an idea that floated around for a while and then, quite quickly, it became a policy initiative. And shortly thereafter, it passed with an unprecedented level of support. Which is all to say, we have pretty accessible and responsive leadership. What’s not an obvious priority today can change pretty quickly. And even moreso if there’s a growing pool of money to work with.
Thanks back atcha!
And I thought traffic was a headache now………………..oh well, progress, right???
I still strongly oppose a separate bicycle lane, especially changes proposed at the Commerce & Clairemont intersection. I try to ride up to Lily Church Hill as much as possible before this section is ruined for bicyclists. Bicyclists need to be smart & cut through the CVS & up to the new community center, before cutting back to Commerce to the bike lane going up the hill. It is infinitely safer than the proposals that want to get bicyclists off the road~ or just as bad, pushing them into intersections. It is being used by developers to con the bicycle community & others. Bicyclists need options to remain safe. Complete Streets & segregated lanes do not give this. There is a continuing effort to put in poor & dangerous infrastructure.
It is “vehicular cycling” that will lead to the safety of bicyclists, not efforts to have two year~olds ride on sidewalks. The effort to get cyclists off the road will lead to the collapse of the cycling community. A progression of “vehicular cycling” to include such things as the “Idaho rolling stop” & lights that respect bicyclists, particularly, on big downhills, is the future of safety for cyclists, as well as others, including walkers & drivers. The extension of the present system will remain the failure that it is. Adding the concept that pedestrians can ignore physics & common courtesy has only made the roads more dangerous for everyone. “Look both ways!”
Resistance to developers railroading everyone, backed by politicians & high~jacked activist groups will continue, & is the future of safety.
Resistance to developers railroading everyone, backed by politicians & high~jacked activist groups, will continue, & is the future of safety.