The Braves Development Company is seeking a loan to build a new 300,000-square-foot office building in The Battery Atlanta that will be used in part by German conglomerate Thyssenkrupp.
The Development Authority of Cobb County signed off on a necessary step for the Braves to get the loan on Tuesday.
The project is broken into halves. One half includes a 420-foot tall elevator research and development building that will be built by Thyssenkrupp on land owned by the Braves. The other half will be an office building built and owned by the Braves.
Under the abatement, the development authority would take the title to the property, removing it from the tax rolls. The companies would pay no taxes on the improved properties during the first year, though they would pay taxes on the value of the unimproved land, said Nelson Geter, executive director of the development authority. The company’s tax payment would then increase each year until it reached 100 percent after 11 years.
Jonathan Smith, deputy general counsel for the Braves, said at Tuesday’s meeting that the project will span about four acres owned by the Braves. About half the land is being leased by Thyssenkrupp for the R&D tower, which the German conglomerate will own.
The other half will house the office building, which the Braves are building and will own, according to Smith. Half the office building is being leased to Thyssenkrupp, Smith said, and the other half is being leased to other companies, though no tenants have been announced yet.
Just as the land is being split in half, so too is the bond. Geter said $130 million will be used by Thyssenkrupp for the R&D tower while the remaining $134 million was for the Braves and the office building.
Geter said the Braves Development Company bought the bonds itself, rather than selling them to a third party to raise capital. He said this type of transaction is sometimes referred to as a “phantom bond” transaction.
About 10 to 15 percent of the projects that receive a bond from the development authority use these “phantom bond” transactions, Geter said, so they are not uncommon.
Because the Braves Development Company didn’t raise any capital from the bonds, it is now seeking a construction loan from SunTrust, Geter said.
In order to get the loan, SunTrust needed to be added to the deed for the project, Geter said. But because the deed is being held by the development authority in order to grant the Braves the tax abatement, the Braves needed the development authority to approve adding SunTrust to the deed.
The development authority voted 6-0, with board member Karen Hallacy absent, to approve the Braves’ request.
Geter emphasized that the amount and financial structure of the bond deal approved in June has not changed.
The Thyssenkrupp project would bring 863 new jobs with an average wage of about $100,000, according to an analysis by Georgia Tech’s Enterprise Innovation Institute.