|Shopping centers empty like ghost towns in the Wild West|
By Rep Mike Jacobs
Drive north on Peachtree Road and Peachtree Industrial Boulevard through Brookhaven, Chamblee, Doraville and into Dunwoody and the view is startling. Shopping centers are empty like the ghost towns of the Wild West.
Town Brookhaven is finally sprouting major anchor stores, but is having trouble filling its smaller retail store fronts. Chamblee Plaza? Nearly empty. The new “Super H Mart” center adjacent to the GM site? It’s nearly empty, too.
The CoStar Group, a national real estate analysis firm, says the vacancy rates of retail, shopping centers and offices in North DeKalb are at catastrophic levels when you compare them to the national average. With so many empty store fronts, why would county officials push so hard to use our tax dollars for a supersized mixed-use project at the site of the former GM plant in Doraville?
- In the North DeKalb zip codes 30319, 30338, 30340, 30341, 30346 and 30360, the vacancy rate for shopping centers is 23 percent compared to 14 percent in DeKalb County as a whole and 10 percent in the City of Atlanta.
- The vacancy rate for North DeKalb office buildings is 24 percent compared to 18 percent in the county overall and 20 percent in the City of Atlanta.
- Retail vacancy rates are 17 percent in those zip codes, 11 percent in DeKalb overall, and 9 percent in Atlanta, according to CoStar.
The county’s elected officials are considering using a special allocation of $36 million in federal stimulus bonds on the 165-acre GM site with visions of creating another Atlantic Station. These bonds come with a high price tag to the taxpayers. DeKalb officials would use the stimulus bonds as a $36 million “gift” to an out-of-state developer, New Broad Street of Florida.
Worse yet, county taxpayers would have to pay the principal and a majority of the interest on these bonds. It’s very likely that means higher property taxes for you and me because the county doesn’t otherwise have the money to make the payments.
In ordinary times, the developer wouldn’t have to rely on county taxpayers. There would be more private investment to help finance the project. But these are no ordinary times. We’re in the midst of the worst commercial real estate market in memory. Private investors don’t want to provide the financing for an overly ambitious mixed-use project consisting of shopping, apartments and offices. The county wants the taxpayers to step in and do what private investors won’t do: bear the risks of this project.
If a new restaurant, retail shop or gas station, for example, wants to open for business, investors take the risk whether it prospers or fails. The same should be true for this project. DeKalb taxpayers are not a bank. They are not in the business of providing corporate welfare to jump start a project the private sector would never finance.
This is the most ambitious project we’ve ever seen county officials attempt to tackle, and it comes during a deep recession. It is not the taxpayers’ job to finance the next Atlantic Station and add to the already glutted market a new supply of retail and commercial space.
The definition of insanity, according to Albert Einstein, is doing the same thing over and over and expecting different results. We should heed the lessons of the “real estate bubble” and steer clear of risking taxpayer funds for further overdevelopment. After the bubble has burst, don’t use our tax dollars to create another bubble!
There are two final things to consider:
1. The GM site ultimately will be redeveloped if the county does not intervene. It’s arguably the most valuable parcel of available commercial property in the county. It’s on a major highway (I-285), a major north-south artery (Peachtree Industrial), and a MARTA station. In better economic times, something that private investors and market forces will support will be built there. I’m confident of that.
2. These particular stimulus bonds are supposed to be used for public infrastructure projects, not for private development. When used properly, they are a cheaper way of financing these projects. The county already has a list of infrastructure needs a mile long, not the least of which is the water and sewer system upgrades that they plan to fund with massive increases in our water bills. The bonds could be used to defray those costs. They also could be used for projects such as street repairs, new sidewalks, intersection upgrades, and parks.
The DeKalb County Board of Commissioners will vote on this matter tomorrow, Tuesday, August 24.
Commissioner Elaine Boyer has pledged to vote against it. I encourage you to contact the other six county commissioners (Rader, Johnson, Barnes-Sutton, May, Gannon, and Stokes) and urge them to vote “no” as well. In particular, Commissioner Jeff Rader appears not to have taken a position as of yet. You can find the commissioners’ telephone numbers and e-mail addresses by clicking here.