The headquarters of the nation’s largest mattress company, Serta Simmons Bedding, is planned for construction atop the rubble of the old General Motors factory in Doraville, bringing 500 jobs and a long-sought corporate tenant to the mostly vacant site.
City leaders hope Serta Simmons’ office building and research facility will jump-start a rebirth of the 165-acre area, where developers are working to build a trendy mini-city called Assembly on the MARTA Gold line.
The deal to combine four of Serta Simmons’ offices, in metro Atlanta and suburban Chicago, is expected to be finalized next month.
Serta Simmons’ plans to move onto the Doraville site were revealed when the city’s economic development board voted this month to award an estimated $16.8 million in property tax breaks to build the headquarters, which will cost the company $65 million, according to city documents obtained this week by The Atlanta Journal-Constitution under Georgia’s Open Records Act.
Doraville Mayor Donna Pittman said landing a major company will create momentum at the GM site, vacant since the last minivans rolled off the assembly line in 2008.
“All our planning has stressed the need to establish professional employment centers,” Pittman said. “The first is usually the toughest, so this is a very significant milestone.”
About 380 of the jobs moving to the Serta Simmons HQ are already in the Atlanta area. They’ll move from the company’s corporate headquarters in Buckhead, Simmons Beautyrest brand offices in Dunwoody and a research and innovation center in Norcross.
Another 120 employees based at the Serta brand offices in Hoffman Estates, Ill., are being offered positions at the company’s new location.
“Our intent is to bring all of those business units together into a single location in Atlanta. We’ll focus on Assembly as a potential location,” said Serta Simmons spokeswoman Noreen Pratscher. “What we like about moving to a single campus — potentially Assembly — is we can accommodate future growth.”
The 5 acres reserved for Serta Simmons will house a four-story office building, a parking deck and a research and development facility, located beneath MARTA and CSX train tracks. The 250,000-square-foot campus is scheduled to open in early 2019.
Besides Serta Simmons, two other businesses are already operating at the former GM plant:Third Rail Studios, which produces movies and TV shows, and a Nissan dealership.
Developers hope to recruit a brewery, condos, restaurants, a health-related company company and a movie theater, according to bond documents. The site’s developer, The Integral Group, is selling $53 million in bonds whose proceeds will be used for infrastructure like roads, grading, utilities, street parking and related improvements.
The project’s architect, Stan Eckstut, said he envisions building a community of walkable neighborhoods, access to public transit, parks, workplaces and retail.
“It’s a way of living where maybe it goes back to the old kinds of towns that used to be where people lived and worked around the main street of downtown,” Eckstut said during a speech, published by The Brookhaven Post, during Pittman’s State of the City address April 28.
The Integral Group declined to comment, and executives for a subdeveloper, Holder Properties, didn’t respond to a phone message and email.
Before the Doraville Development Authority approved tax incentives, Serta Simmons was considering other sites outside Georgia for its headquarters, said Dan McRae, the bond attorney for the deal
“We have a very great corporate headquarters project — very much in demand across the country,” McRae told the board before its 6-0 vote May 3. “It’s very normal that they ask for incentives in this community that they’d get in other communities.”
The tax breaks give Serta Simmons a discount on property taxes that would otherwise go to DeKalb County schools, DeKalb County government and the city of Doraville.
Serta Simmons will do business on the site tax-free for its first three years on the former GM site, which amounts to a benefit worth $3.5 million of the $16.8 million total, according to terms of a memorandum of understanding between the development authority and the company. The tax discount then gradually declines from 100 percent to 35 percent over the next nine years, then holds steady at that rate for 18 more years.
Last year, the Doraville Development Authority approved a 35 percent tax break for the entire GM property over the next 30 years. Through a complex financing arrangement, the tax money that businesses save through the incentive is designed to offset the cost of more than $180 million of infrastructure improvements, including a covered street connecting the site to the Doraville MARTA station.
Further government support for the project came in January, when the DeKalb Commission and Doraville City Council created a tax allocation district on the GM site. With the TAD, future growth in the site’s property tax revenue will be spent on infrastructure.
The city’s decision to award tax incentives was critical to Serta Simmons moving forward with its new headquarters, said Kristen McGuffey, the company’s general counsel.
“What you’re doing here tonight is a big reason we’re looking at this Doraville location,” McGuffey told the development authority board at its May 3 meeting.
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In other DeKalb news:
By the numbers
$65 million: Estimated investment by Serta Simmons Bedding at the Assembly site
$16.8 million: Total amount of property tax discounts awarded to the company over the next 30 years
$3.5 million: Value of the tax breaks in the first three years, when the company will operate tax-free
$180 million: Cost of planned infrastructure on the site, including a covered street to MARTA, roads, grading, utilities and street parking
$53 million: Amount of a bonds being sold to pay for the first phase of infrastructure improvements
Source: City of Doraville