Smyrna mayor: City ‘on track’ to sell off property
by Nikki Wiley
February 08, 2014 04:00 AM | 3305 views | 4 4 comments | 13 13 recommendations | email to a friend | print
SMYRNA — In 2010, the city of Smyrna purchased the aging Hickory Lakes apartment complex with the promise of redevelopment.

Almost four years later, city officials are still looking to unload the 47-acre site at the intersection of Old Concord and Windy Hill roads.

The now-vacant site cost the city $16 million to purchase and tear down. Of that amount, about $3.4 million has been paid.

Under the current payment schedule, when all is said and done, the city will have paid $15.9 million on principal alone and another $16.2 million on just interest, totaling $32 million.

On Feb. 1, the city paid $898,631 toward the purchase and interest on the bond that underwrote the sale. Another $473,402 is due Aug. 1 in interest alone on the debt.

The city is scheduled to make two payments each year until 2035: one on principal and interest and another on interest alone.

Payments are being made to Birmingham-based Regions Financial Corp.

Officials have said the property was purchased with the intent of controlling Smyrna’s destiny.

Potential buyer in line

The Smyrna Downtown Area Development Corp. met Tuesday to discuss the sale of the property, but no official action has been taken since October when the City Council tabled a resolution supporting the downtown group’s intention to sell the property for $13 million, said Mayor Max Bacon.

Vinings-based Southeast Capital Companies, the buyer considered by the city, is a real estate acquisition firm that specializes in development of multi-family single-family, and mixed-use projects, according to its website.

A $13 million sale would mean a $3 million loss on the property the city has spent $16 million purchasing and razing.

That doesn’t account for the millions of interest the city is paying or the 5 percent commission the city’s Realtor, NAI Brannen Goddard, stands to receive, which would be $650,000 on a $13 million sale.

“We’re still on track to sell the property it looks like,” Bacon said.

Bacon said he hopes to close on the sale this year but the potential buyer is taking time to carefully consider the purchase and conduct surveys.

Councilman Wade Lnenicka spearheaded a committee appointed by the mayor that was responsible for finding potential developers for the site.

Lnenicka was the sole opposing vote on the council in 2010 when the decision was made to buy the apartment complex.

He remains cautious of the expense to the city.

“My job was to get the property off the city’s books in the best and fastest way possible without hurting the city,” Lnenicka said. “At some point we’ll have to make some decisions about that but I don’t think that’s anytime soon.”

Other properties still on the books

More than $20.1 million of taxpayers’ money has been spent in the last five years by the city purchasing private property for redevelopment.

Smyrna Elementary School was once a 144-unit apartment complex called Smyrna Commons before it was purchased by the city.

The Smyrna Downtown Area Development Corp. spent $4.6 million for the property that also provides public recreation space. Another $2.5 million in renovations was also spent before the city knew about the school board’s interest in turning the site into a new school.

A property, intended to be a retail center at Dunton Street and Concord Road but containing only the 15,000-square-foot steel frame of a building that was never finished, was sold by the city for a $100,000 profit.

About 6.3 acres representing 22 parcels on Concord Road were purchased by the city between 2007 and 2011 to improve the road. This time, though, the money for the $5.75 million purchase came from special purpose local option sales tax funds.

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SmyrnaGuy
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February 11, 2014
I really do hope folks understand the loss is more than the often quoted $3 million. Don’t forget about the interest payments made and those that will be made, and more importantly, the tax revenue lost from this site while it’s been under city ownership. So the loss is actually larger. And while some feel the “loss” is worth it as it will “improve the quality of life and reduce the cost of police/fire services” consider that it will take years to recoup the tax revenues lost, regardless whether the development is commercial or residential.

And also don’t forget that any developer that does business in our area, comes to the table expecting tax subsidies to be given, which further depletes your tax revenue generated from the site. And because of you’ve now reduced the tax revenue through the subsidy, it actually costs more for police/fire protection as it puts a strain on those services as you’re now unable to properly fund them (see fire station #5). While I want this to succeed, with other projects stalled across the city, and with a bigger more massive project (Riverwalk) tentatively on the way, it’s hard to remain positive when we’ve gone all in on just a chance.

RJSNH
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February 10, 2014
buying property with public dollars, financed... allowing attorneys, bond counsel, financial advisors, and investment firms to profit, selling it a loss to developers so they didn't have to pay fair market value in the first place benefits all these folks at taxpayer expense. It was a lousy decision to throw away millions in taxpayer money to benefit all these other folks. It is doubtful that the city will ever recover these loses from future tax revenue to be gained from whatever becomes of the property. And, it is even more doubtful that any of those who are defending Mayor Bacon and his Band on this issue would ever knowingly and willingly agree to gamble with their own money on such a purchase. If they would, let it be known here and I will be happy to arrange such a purchase for you.
SG68
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February 10, 2014
Sometimes you just need to bite the bullet, cut your losses and move forward with improving the community.

The monetary "loss" is a small price to pay for eliminating a slum and replacing it with tax producing development.

The long term positive impact will certainly be worth it.
Dave Z.
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February 08, 2014
A $3 million dollar upfront loss to dramatically improve quality of life is a fair price to pay. And over time, the reduced cost of (police) services and increased land values in the area will more than make up for the upfront loss.

Also, the school system is considering consolidating LaBelle Elementary and Belmont Hills Elementary - and this large parcel is situated between those two schools. Although funding for this replacment school may not come until the next SPLOST, it would be wise for the school system to be proactive and make a move on 15-20 acres of this land now.
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