Fayetteville OKs 89 townhomes near downtown

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Fayetteville Mayor Ed Johnson with city's logos,
Fayetteville Mayor Ed Johnson with city's logos,

City to grant $6.63 million 20-year tax break to Meridian Square downtown project — 

Though a nearby resident criticized Fayetteville for stormwater retention failures, the City Council June 17 approved the rezoning request that allows 89 townhomes to be built within walking distance of the downtown square.

Fayetteville Mayor Edward Johnson at the June 17, 2021 Fayetteville City Council meeting. Photo/Cal Beverly.
Fayetteville Councilman T. Joe Clark at the June 17 City Council meeting. Photo/Cal Beverly.

The resident said she had videos of stormwater damaging her land already, and that the new development would make that problem worse. “What the city is doing is not working,” she said.

City Councilman T. Joe Clark disputed her assertion, saying he lives near that area and that the city-required retention ponds work just fine.

Mayor Edward J. Johnson chided the resident: “Why didn’t you bring this up earlier?” at several planning and zoning commission meetings and at earlier City Council discussions on the matter. She replied that she just found out about the development plans.

The 8.13-acre development will have deed covenants prohibiting more than 15% of the 89 units from being rental. All other $350,000 and above units will be privately owned. The site is off Ga. Highway 54 West on Campaign Trail at the entrance to the Villages neighborhood.

$6.63 million tax break for developer

In other action, the council agreed to move forward with a big property tax break for a developer who plans a mixed-use apartment and retail project on the northwest corner of the downtown square.

Dubbed an “incentive agreement for Meridian on the Square Development,” the city intends to provide a “gap-funding source” of $6.63 million in city property tax abatement over the next 20 years. The Fayette County Board of Education must also sign off on the tax break.

Why the tax break? “This gap is derived from the cost of building the $28.1 million project versus the amount of rent revenue that the Fayetteville market will bear,” according to an explanation given by Economic Development Director Brian Wismer to the council.

Unexplained was the change in the estimated value of the project from the May 20 council minutes. In those approved minutes, the city said the cost of building the project was $36.8 million, a difference of $8.7 million in under a month.

Put another way, the developer says rent income won’t pay for the project over the next two decades, so it needs the city and the board of education to stop collecting property taxes for up to 20 years to make up the difference.

How can a government give a no-tax pass to a private development? Because the developer will deed the property to another government entity, the Fayetteville Downtown Development Authority, which will own the property for 20 years. Government entities pay no taxes to anybody. After 20 years, the DDA will deed the site back to the developer.

Staff told council a study of similar projects in the metro area that involved such tax-abatement incentives showed the Fayetteville deal “is on the lower to middle spectrum.” There was no discussion or explanation by city staff or the council at the meeting about how the big tax break for a private developer would benefit Fayetteville taxpayers.

What’s next for ex-City Hall

Also approved last week, the future of what until earlier this month was the Fayetteville City Hall became clear. The city will transfer ownership of the one-time school building at 240 South Glynn Street to the DDA.

<b>For the past 25 years, the now-old Fayetteville City Hall. File photo.</b>
For the past 25 years, the now-old Fayetteville City Hall. File photo.

Then the DDA will lease the old City Hall to a private company to be “used for the operation of downtown business-driven endeavors including but not limited to co-working spaces, business incubator office rentals, retail establishments, a general events center and on-premises sales and food service,” according to a city memo.

One resident complained that the city should turn the old city hall into “low income housing.” Because of rising home values and increased rents, “We’re being pushed out,” she told council.

Mayor Johnson urged residents to be patient about using the park facilities behind the new City Hall on Stonewall Avenue, saying the park was due to open by July 17. And the council plans a June 24 called meeting to discuss setting the city budget, the mayor said.

2 COMMENTS

  1. I would like to invite The Mayor and Mr. Clark down Sharon Drive during the next rain storm to see for yourselves how well your drainage plan is not working! Washing out residents backyards and be sure to visit the next time the sewer over flows and dumps raw sewage in the creek behind our houses. This occurs frequently! Y’all need to stop worrying about developers and start fixing the problems you have caused for your long time existing tax paying citizens that elect you! It may not be flooding your backyard Mr Clark but it is ours. So much for working for the citizens!

  2. Irresponsible to put this much congestion downtown where the streets are already over crowded with rush hour traffic. Now it will be this way all the time. This Mayor seems to be getting kickbacks from the developers. He doesn’t listen to what the people want either. Also have to ask is the development company or the city getting grants from the federal government for providing rental properties to communities, which in turn is the reason for the tax break. So the school board will sign off on the tax break for a development company…but home owners get raised taxes each year?