A Norfolk-Southern train travels south close to the Mitchell Street bridge in the Gulch in May 2013. The railroad giant owns land critical to develop the Gulch downtown. The company wants to sell its holdings to developer CIM Group and use proceeds for a potential relocation to Midtown. JASON GETZ / JGETZ@AJC.COM
Photo: The Atlanta Journal-Constitution
Photo: The Atlanta Journal-Constitution

UPDATED: Gulch deal off agenda for Wednesday City Council meeting

UPDATED: Atlanta Mayor Keisha Lance Bottoms has pulled a vote on the Gulch deal from the agenda of a Wednesday special called meeting of the City Council, placing into doubt yet again when the matter might come before the body. 

City Council President Felicia Moore on Thursday called a special meeting that included a public financing package for the proposed $5 billion downtown development deal. 

But on Friday, Bottoms’ Chief of Staff Marva Lewis wrote in a memo to Moore stating that the mayor’s office wanted the legislation removed from the agenda.  It’s the third time Bottoms’ office has reversed course on a council vote. 

Several members demanded time to review final legislation and felt a Wednesday vote was too soon.  The council’s next regular meeting is Nov. 5, though another special meeting could be called if needed before then.

The Wednesday meeting will go forward with matters related to watershed bonds. 

Lewis wrote that the administration expected outside lawyers to have final Gulch documents ready for council review by this past Wednesday. 

But that didn’t happen, and the public and council as of Friday afternoon did not have final legislation to review. 

“It is the desire of Mayor Bottoms that the members of Council have adequate time to review and consider the newly negotiated terms of this development deal,” Lewis wrote. “ Therefore, it is requested that all of the legislative items related to the Gulch development be removed from the agenda of the special called meeting to allow time for the Council to review the information that will be provided.”

Original story continues below:

ORIGINAL POST: The CEO of Norfolk Southern told employees Thursday the company is looking to consolidate its headquarters in Atlanta, “but only if many aspects can be resolved,” the Virginian-Pilot newspaper reported. 

Though the company had previously discussed a potential consolidation of its operations, the comments by CEO James Squires were the first formal acknowledgement of the railroad’s interest in a potential headquarters move from Norfolk, Va., to Atlanta. The remarks came the same day Atlanta City Council announced a special called meeting next week to consider a public financing package for the $5 billion redevelopment of downtown’s Gulch. 

Squires’ remarks and the scheduling of a Wednesday special council meeting added to the sense among some observers at Atlanta City Hall that a Gulch financing package, originally valued by the city at up to $1.75 billion, will ultimately receive City Council support. 

A deal for taxpayer-funded Gulch incentives is a crucial step in the complicated courtship of Norfolk Southern by state leaders and the city of Atlanta. 

Norfolk Southern owns key Gulch property that’s part of a complicated deal by developer CIM Group, which wants to build a mix of office towers, apartments, hotels and retail on 40 acres of lonely parking lots and railroad tracks between Mercedes-Benz Stadium and the Five Points MARTA station. 

Norfolk Southern wants to sell its land to help finance a new headquarters. The company is said to be interested in a parcel known as 3rd and Ponce in Midtown, where it would locate in a headquarters to be developed by Atlanta-based Cousins Properties. 

Tom Bell, a Norfolk Southern director, is the former CEO  of Cousins. A unit of Cousins reportedly has the land near Bank of America Plaza under contract. 

Bert Brantley, a top economic development officer for the state of Georgia, said in recent weeks that the Norfolk Southern headquarters could create or relocate about 1,000 jobs to the city

Squires told employees the situation for Norfolk Southern goes beyond a possible sale of Gulch land, and also involves navigating the process to develop a new Atlanta headquarters. 

Squires said in a video address that a move to Atlanta “would involve construction of a new headquarters building, which would take about three years,” The Virginian-Pilot reported.

Most of the Norfolk Southern employees who might be moved wouldn’t relocate to Atlanta until summer 2021, the paper reported Squires as saying, but some could start the transition next summer. Squires told employees that he hoped to have a resolution in 30 to 45 days, the newspaper reported. 

"We will be better as a team if we are together in one place," Squires told employees according to the Virginian-Pilot. "I've believed that for a long time." 

In an interview this month, Norfolk Mayor Kenny Alexander said his city won’t get into a bidding war for the railroad company, and he said Atlanta’s City Council should not feel pressured to make a deal because of any fear of a Norfolk counter-offer. 

The Fortune 500 railroad has deep ties to Atlanta and has more jobs in Georgia than in its home state of Virginia. The company recently expanded its operations center in Midtown. 

CIM, meanwhile,  bought the former Norfolk Southern office complex on the southern end of the Gulch and is currently converting the buildings into loft apartments. 

City Council President Felicia Moore on Thursday OK’d the special council meeting for Wednesday, but wrote in a memo that she has “great concern” about including such important legislation on the agenda when the council hasn’t seen the new proposal. 

Mayor Keisha Lance Bottoms is pushing for a Wednesday vote, but several council members said this week they want time to review any future deal terms before making a final decision. 

If council isn’t ready to vote Wednesday, the matter could come before the body at its next regularly scheduled meeting on Nov. 5.

A rendering of CIM Group’s proposed $5 billion redevelopment of downtown Atlanta’s Gulch.
Photo: The Atlanta Journal-Constitution

Parts of the Gulch deal were believed to still be under negotiation late Thursday, but the call for a special meeting signals the core pieces of the proposal are set. 

The city and California-based CIM originally proposed a public financing package of up to $1.75 billion in bonds backed by two future tax revenue streams. One would come from a portion of future sales taxes created on the Gulch property, while the other would involve future property tax revenue created by the development. 

The proposal also contains commitments for affordable housing, job training and an economic development fund. But critics say the public benefits aren’t commensurate with the taxpayer support. 

The council twice balked at the original deal, sending Bottoms and CIM back to the drawing board. 

On Monday, the city and CIM scrapped a controversial provision that would have extended property tax collections in a special taxing district through 2048. The Westside Tax Allocation District, instead, will help fund the project through 2038. 

The TAD extension had been fiercely opposed by some council members and by Atlanta Public Schools, which also would have had to approve the extension. 

The proposal also will rely on bonds supported by five cents of the local 8.9-cent sales tax created in the Gulch area for the next 30 years.

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