TAD under consideration to save downtown apartment project
Published 9:00 am Wednesday, May 10, 2023
On Tuesday, the LaGrange Redevelopment Agency voted to recommend approval of a Tax Allocation District (TAD) to help pay for construction of the long-planned downtown apartments. The TAD will still need to be signed off on by the city, county and school district.
The project to bring 144 apartments home to downtown LaGrange at the former Loy’s Office Supply on Main St. was originally announced in late 2021. Many months later the project still hasn’t broken ground due to funding issues.
Jamie Williams, director of acquisitions for the developer EYC Companies, said the company is still working to complete the project, which includes 152 units and podium parking underneath.
Williams said the podium parking, which is primarily dedicated to the city, is part of why the project is so expensive at $44 million.
“A normal parking garage wouldn’t cost that much. Parking garage cars don’t really weigh that much in the scheme of things. They just don’t. But we’re putting housing on it. That’s a whole different ballgame. That’s part of why is project is so expensive.”Williams noted that construction costs have also increased since the project was originally planned.
“We’re here because we’ve gone through the process, and we finally got to a stopping point to say hey, we can’t justify the rents that we‘ve got to have for this project,” Williams said, noting they have had trouble getting financing.
Williams said they have pointed to other successful downtown apartments in Newnan and Columbus, but it’s very difficult to say the apartments can get $2,500 a month in the downtown area because there is currently very little housing in the LaGrange downtown area.
It’s been very difficult for banks to comprehend what their numbers would be, Williams said.
“They’re still going to have a hard time because I don’t have anything physical downtown. So, we need some help and a TAD is a good way to do that,” he said.
Williams said they are seeking a pay-as-you-go where they would receive a refund on the increased taxes on as the property value goes up, which would be used to repay financing for the project over 15 years.
The developers would still pay their base property rate over the period, but essentially any increased taxes would be abated.
City Attorney Jeff Todd said that TADs typically are approved for projects because they wouldn’t happen otherwise.
“You’re going to continue to get what you would have gotten because this isn’t happening unless you do the TAD, which means you get $10,000 a year. But then they come in and put $20 million on it. The tax bill for the new $20 million value, they get to pay it back to themselves. In this case, to pay back for the parking deck. They paid $15 million for the parking deck over the next 15 years. They pay the tax effectively back to themselves to get $6 million back of that,” Todd explained.
The current annual property taxes for the location are minimal, but it is expected to increase to around $374,000 upon full build-out, Williams said.
City Councilman Mark Mitchell asked how much impact would the new homes have on the school district, seeing as they are also being asked to chip in through the partial abatement.
Williams said they are targeting young professionals for the apartments, not families, so the impact on the school system would be minimal. Most of the units will be studio and single-bedroom with just a few two-bedroom homes. EYC is estimating less than one child per 144 units.
The LaGrange City Council later voted to call for a public hearing for the potential TAD on June 13.