Massive new student apartment complex under consideration

Does downtown Athens need more student housing? Despite the large public benefits that may come with it, the Athens-Clarke County Commission isn’t so sure.

ACC Commissioners are currently considering whether to approve a development agreement that would facilitate the construction of a massive new student apartment complex in downtown Athens. Chicago-based developer Core Spaces is proposing a 1,400-bedroom apartment complex near Lay Park and wants to partner with the Athens Downtown Development Authority to build it. 

While Core Spaces could legally build something at this site regardless, the developer is seeking the local government’s participation and is willing to provide millions of dollars in public benefits in exchange. The centerpiece of the deal involves a land swap in which the local government would provide two triangular parcels off North Jackson Street in exchange for another piece of land on which Core Spaces would build a public parking deck.

“It’s really geometry that’s driving this project. We have two funky triangles [that are difficult to do anything with],” Mayor Kelly Girtz told ACC Commissioners on October 21. So when the neighboring property owner, who effectively could do everything they’re doing by right without talking to us, engaged with us and said ‘hey we could swap these two triangles for this rectangle’… it certainly made sense just from a functionality and practical perspective.”

The commission gave their initial approval to the land swap back in June in a split 6-5 vote. Girtz broke the tie in favor of the development, with Commissioners Tiffany Taylor, Dexter Fisher, Stephanie Johnson, Carol Myers and Ovita Thornton voting against it. Since then, the parties involved have worked to formalize the agreement and lay out in detail the responsibilities and benefits they expect of each other. The agreement, spanning hundreds of pages, is coming before the commission for a vote next month.

The benefits

The agreement includes millions of dollars of public benefits and estimated tax payments to be provided by the developer and the property owner.

First, the developers would pay the local government $4.7 million for the publicly-owned triangles of land at 550 North Jackson Street and 293 Hoyt Street. The ACC government would also receive a smaller piece of land at 295 E. Dougherty Street in exchange. In addition, the developer is planning to make use of the density and parking incentives provided in the county’s rarely-used inclusionary zoning ordinance for this development. That means Core Spaces would provide another $7.8 million to the ACC housing trust fund so that the local government can build affordable housing in another part of town. There will not be any affordable units directly included in the proposed apartment complex itself.

Such a large project would strain our already taxed sewer system downtown, so the developer would also pay for sewer improvements costing another $2.5 million. The increased sewer capacity may benefit other housing projects in the area as well, such as future phases of the redevelopment of Bethel Midtown Village.

Core Spaces has also agreed to pay for almost half of a 425-space public parking deck to be managed by the Athens Downtown Development Authority. This deck is in addition to a 650-space private parking deck intended for residents of the proposed apartment building. The new public deck is estimated to increase net parking revenues by $225,000 a year over the costs of operation.

All of this doesn’t include the tax revenue from such a large project, which is quite substantial. The local government is estimated to receive over $900,000 a year in additional property taxes whereas the ACC School District would also receive $1.3 million a year.

Costs, indebtedness and other downsides

Beyond aesthetics, traffic and other issues, the main downsides to the land swap arrangement involve impacts to Lay Park, which may be substantial. Downsides also include the cost of the other half of the parking deck, which would require the Athens Downtown Development Authority to take on new debt. Furthermore, there are a few additional costs, including an exemption for part of the utility connection fee for the project that would cost the public $701,683 in lost revenue.

Parking decks aren’t cheap

If this deal is approved, the Athens Downtown Development Authority would take on several million dollars of debt at 5% interest to help pay for the public parking deck. This debt is ultimately backstopped by the ACC government. Unfortunately, the expected revenue from the deck, while substantial, would not be enough to pay the agreed $767,192 a year in debt service. However, the Athens Downtown Development Authority is paying off some debt on previous parking garages next year and this should make up the difference so that the debt can be paid without using property tax dollars.

Impacts to Lay Park

If this development is approved, Lay Park would end up tucked behind a massive wall of student apartments that would cause significant changes to how it operates.

First, the playground currently onsite would be destroyed and rebuilt in two separate locations. Core Spaces is promising to rebuild a public playground on the same spot, but it would be smaller and more difficult to access. The parking lot currently present will no longer exist and increased traffic from students may make it difficult to drop children off at this location. Instead, parents might choose to park in the public deck to access the playground, and there would be 50 spots reserved for this purpose, free for three hours at a time. Yet, according to the commission’s agenda item, the route from the parking deck to the playground would be “longer and somewhat less intuitive” than the current easy access parents and children have now.

The local government will construct a new playground on Lay Park grounds, newer and hopefully better than the currently existing one. This will cost money, of course. In fact, roughly $1 million or more will be needed for improvements to Lay Park to accommodate student apartments in such close proximity. 

During construction of the complex, activities at Lay Park would be severely impacted. For example, essentially all nearby parking would no longer be available. After construction, the view to downtown would be blocked permanently, altering the experience and perhaps making it seem less inviting. The commission’s agenda item admits that this will be “an abrupt change for park patrons.”

Commission opinion

Even with the impacts to Lay Park and other costs of the project, it may be difficult for commissioners to turn down tens of millions of dollars, simply put. It has become challenging for the local government to maintain basic infrastructure like road repaving over the years, while homeowners have grown increasingly resistant to property tax increases. Projects like this one offer commissioners a way out from distressing fiscal realities without having to ask taxpayers for more money.

The parking revenue and the benefits to taxpayers are reasons why some commissioners support the project, notably Commissioner Mike Hamby who represents the commission on the Athens Downtown Development Authority.

Commissioner Melissa Link also supports this project for another reason, which is to give UGA students a place to live outside of single-family neighborhoods, areas she feels are “tremendously overtaxed” by the student presence. She also emphasized the other public benefits the development would provide in her remarks at last week’s commission meeting.

“Every bedroom we build in a project like this that is not adjacent directly to a neighborhood and that has parking on-site is going to loosen up the issues in our neighborhoods and draw students out,” Link said. “I only wish that we could have seen these kinds of benefits [such as contributions to the affordable housing fund] from the dozens of other large scale student housing projects that have come to this community.”

Despite the benefits, the commission appears just as split on this development now as they were back in June. Those who voted against the plan in June now called for delay so that they could have time to digest the 500–page agreement and inform their constituents about it.

“We’re going to miss things [in this agreement]. We’re not going to have time to ask questions. I would like to see a decision pushed out until 2026,” Johnson said.

“I do think the devil is in the details,” Thornton added.

Fisher and Myers called for a work session on the development before the vote.

“I think there’s too many moving parts for us to make a decision in November. I recommend that we pull this and do a work session,” Fisher said. “To ask us to make a decision in November is not fair.”

In his comments, Fisher also doubted the need for additional student housing in Athens, saying that he felt UGA would soon cap the growth of its student body. Finally, Fisher wondered if Lay Park would be able to survive after this development was built.

“I’m trying to look at the future and what this development will bring,” Fisher said. “I could see, five, ten years from now that Tom Lay [Park] may not even be there, may not even be in existence.”

Instead of a work session, Girtz has scheduled a drop-in open house for those who have concerns about the project or who want to learn more. From 3 to 7 pm this Wednesday, October 29, ACC staff, representatives from both the Athens Downtown Development Authority and Core Spaces will be available to provide information and answer questions at the Foundry (295 E. Dougherty Street).

The vote on this development remains scheduled for November 4.

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