Moderated by Rick Badie
The former General Motors plant in Doraville is slated to become the home of a major movie studio, part of a massive commercial, business and residential project known as The Assembly. Doraville’s mayor couldn’t be happier about the development and touts its economic benefits in today’s lead column. The companion piece addresses the state’s booming film industry and what private property owners should weigh when approached by industry executives who want to lease their stead.
Doraville’s bold GM investment
By Donna Pittman
Fortune favors the bold, wrote Virgil in his epic, “The Aeneid.” It’s one of my favorite quotes and it rings true particularly in the process of economic development. In the early 1940s, DeKalb County Commissioner Scott Candler shrugged off a barrage of criticism when he proposed a $1 million bond issuance for a new water plant just north of Doraville. Completed in 1942, the new system featured a 30-inch water main that ran to the edge of the Southern Railway and the future General Motors site.
In 1944, GM chose Doraville, a fledgling agrarian community, as the site of its new assembly plant because of its robust water capacity. The water system, combined with the state’s promise of an $800,000, four-lane expansion of Peachtree Road, ultimately sealed the deal. The Doraville GM plant, along with the new “Peachtree Industrial Boulevard” opened in 1947.
The GM plant breathed new life into Doraville and ushered in an economic boom for North Atlanta. By 1949, that $1.8 million investment was credited with attracting more than $75 million in industrial development to north DeKalb.
Fast forward 75 years.
Candler’s bold actions provide a valuable lesson for us today. Integral Macauley + Schmit’s “Assembly,” the vision for the former General Motors property, certainly qualifies as bold. Roughly 25 acres bigger than Atlantic Station, Assembly will indeed be a city within a city, replete with new urbanist and quality-growth concepts. Situated next to the Doraville MARTA station, Assembly will feature trendy hot-spots, neighborhoods and a corporate campus, spurring possibly 8,000 new jobs.
According to a recent study by the Bleakly Advisory Group, the development will represent nearly $2 billion in private investment with a net impact of more than $2.5 billion over the next 10 years. Coupled with the anticipated redevelopment of 124 acres east of the MARTA station, the projected growth is even more staggering.
According to the Bleakly study, the combined area (289 acres) currently represents about $40 million in assessed tax value, generating about $1.7 million in property tax revenue for Doraville, DeKalb County and the DeKalb school district. After a 25-year buildout, that assessed value is expected to reach $800 million, or $29 million in additional property tax revenue for the three tax jurisdictions.
But there’s never any gain without a little pain, right?
Economic development and infrastructure investment go hand-in-hand. They always have and they always will. Mind you, Integral Macauley Schmit’s plan envisions a dense, urban-style of development and in order to support this level of density, Doraville’s antiquated infrastructure – designed to support industry – has to be retrofitted. The costs associated with the upgrades are expected to reach $200 million.
So how do we pay for it?
The Bleakly study was a legal prerequisite to creating a tax allocation district. Think of it as the TAD’s feasibility study, which gauges future growth and determines the amount of bonds a jurisdiction can issue. Based on the projected growth, the study determined we may be able to issue up to $293 million in revenue bonds. These bonds are repaid over a 25-year term through the district’s incremental tax growth. So for 25 years, the three jurisdictions will continue to receive the base $1.7 million in revenue. As the district builds out, the positive increment or increasing revenues are used to retire the bonds. At the end of the term, the positive increment or new tax growth ($29 million) becomes a windfall. So a TAD is neither a tax break for developers, nor does it mean a tax increase for residents.
Economies evolve and change over time. Infrastructure has to change with it. What was good for a farming community didn’t suffice for what was needed to support industry. What was needed to support industry is not adequate for an innovation-oriented economy. The one thing that doesn’t change is the bold undertaking of public investment.
Donna Pittman, a DeKalb County native, is mayor of Doraville.
Be cautious when allowing your private property in film
By Matthew V. Wilson and Philip G. Skinner
The film industry in Georgia is booming. As of June 2015, Georgia ranks third nationally for film projects behind only California and New York. The state, with its temperate climate and picturesque landscapes, bolstered by a highly successful tax-incentive program, has proved irresistible to Hollywood production companies and filmmakers. On any given day, from Savannah to Decatur, film crews can be seen shooting in public spaces, local businesses and neighborhood homes.
Before any private property can be portrayed on film, however, the filmmakers must secure various rights from the property owner or the owner’s authorized agent. In industry-speak, the right to access, record and depict private property is secured through a location release agreement.
As one might imagine, the length, scopeand complexity of these agreements often vary depending on the needs of the parties, their relative tolerance for risk and overall transactional sophistication.
The rise of the film industry in Georgia is a relatively recent phenomenon. Most property owners know little about location release agreements. The purpose of this article is to briefly outline some of the issues a property owner should consider.
In addition to addressing access and publicity rights, most location release agreement forms originating from the filmmaker’s camp will include a litany of legal concepts designed to favor the filmmaker. Accordingly, it is important for a property owner to appreciate the legal landscape associated with filming and the movie industry, generally, and to work with experienced counsel to help rebalance what is likely a one-sided agreement.
For example, a business owner seeking to minimize the disruption to business activities should insist the agreement specify the precise dates and times filming will occur. Similarly, the property owner will want to protect the condition of the property and be indemnified for any losses arisingfrom its use.
In some instances, image-conscious owners may want to consider how the property will be portrayed and restrict any uses that may be deemed embarrassing or defamatory, or simply not in keeping with the character or image of the property. The creativity displayed in some location agreements can match, if not eclipse, the efforts of big-budget Hollywood screenwriters.
The use of a single-family residence will present a bundle of potential issues and concerns. “Who will take care of my personal property and belongings?” “Do I have to pack anything up and put it away?”“Will they need to paint or change anything and, if so, will they put it back the way it was?” All should be answered before handing over the keys.
In contrast, issues that emerge with the use of a multi-tenant commercial property are somewhat more complex. For example, a landlord might ask: “What do the tenant leases say about this?” “Do I need to inform my mortgagor and/or seek their consent?” “Should I let my insurance carrier or agent know?” “Do I have to use the license fees or rental payments received to reduce or offset operating costs?” “Will this interfere with my tenants’ use of their premises or common areas?” “Do I want my building’s or project’s name published or displayed in the film?” The questions that accompany a location agreement can vary tremendously.
The portrayal of a home, business or other structure in a feature film, commercial or television show may enhance the value of a property, but could leave the owner with post-production headaches that could have been avoided with a little work on the agreement on the front end.
Consequently, the prudent owner should ensure that the owner and the owner’s property are adequately protected. That’s a wrap!
Entertainment lawyer Matthew V. Wilson and real estate attorney Philip G. Skinner are with the Arnall Golden Gregory firm.