Source: Maria Saporta, Atlanta Business Chronicle
The Los Angeles-based CIM Group will develop at $1 billion mixed-use project around a renovated Philips Arena, Atlanta Mayor Kasim Reed said in an exclusive interview Friday.
One of the key principals of the CIM Group is Richard Ressler, the brother of Tony Ressler, the majority owner of the Atlanta Hawks.
Reed confirmed the “transformative project” during an interview after the quarterly meeting of the Atlanta Committee for Progress, held at the Ponce City Market offices of Cox Enterprises on Friday morning. It also was Tony Ressler’s first ACP meeting.
Mayor Reed said he has been working with the Ressler brothers on the $1 billion project from the day the Hawks organization decided to remain in Philips Arena and to partner with the city to renovate and reconfigure the venue – a $200 million project.
The city is contributing about $142.5 million towards the redevelopment of Philips Arena, including $110 million that will come from the extension of the car rental tax. The rest will come from recent land sales, including the sale of Turner Field.
The Hawks will put in $50 million for the renovation, and the organization has agreed to extend its lease through 2046.
“I think the development around the gulch is going to be one of the most important developments in the life of our city,” Reed said. “We have been talking about the gulch for at least 30 years.”
Reed was asked specifically whether CIM was seeking acquire the air rights over the parking decks across from Philips Arena from Cousins Properties. He said to contact Larry Gellerstedt, the CEO of Cousins and the 2018 chairman of the Atlanta Committee for Progress – who also attended Friday’s meeting of 25 leading CEOs from the Atlanta region.
Reed also was asked whether CIM would be buying the adjacent railroad gulch owned by Norfolk Southern.
“I don’t have any comments on the real estate aspects,” Reed said. “I don’t want to influence any conversations they are having..”
But he was quick to say that CIM is an ideal partner to build a mixed-use development next to Philips Arena.
“CIM manages complex real estate projects,” Reed said, mentioning the 432 Park Avenue development in New York City as well as projects in Austin and Los Angeles. “They have private capital. They develop first tier projects. They would be considered first rate.”
Reed said he knew the city’s $142 million contribution to the upgrade of Philips Arena would leverage a $1 billion development downtown, and he has been working on this outcome for nearly two years.
“We have been partnering with CIM and the Hawks organization to secure the appropriate tax tools for a redevelopment of this kind,” Reed said. “Just imagine being in a relationship for two years and not being able to disclose it. It was part of the discussion from Day 1 about the future of Philips Arena and changing the experience at CNN Center.”
The city had to not only extend the car rental tax, but it also had to get state legislation passed.
During the past session, House Bill 342 was passed that would allow sales and use taxes from retailers to pay off bonds for infrastructure investments in designated enterprise zones, creating a significant tax incentive for developers.
The bill allowed the tax incentive to be given to projects of at least $400 million in a designated enterprise zone (defined as chronically underdeveloped for a period of 20 years or more). The enterprise zone would last for 30 years, but there was one condition – the incentive would not apply to the development of a casino.
Reed thanked Gov. Nathan Deal for signing that bill, and said it was a key reason the $1 billion development was going forward.
Read the complete article at the link above.