Gwinnett County commissioners cleared the final hurdle to issue bonds that are designed to support the construction of a major mixed-use development near the Mall of Georgia on Tuesday.
County commissioners approved a resolution that authorizes the issuing of a $38.48 million bond, with a 6.5% interest rate, for the Exchange at Gwinnett tax allocation district. The TAD was created to reimburse Fuqua Development for some of the costs associated with developing the site, which sits between Interstate 85 and Laurel Crossing Parkway on Buford Drive.
Bonds will be placed through Preston Hollow Capital LLC with closing expected to take place June 11. Commissioners Jace Brooks and Tommy Hunter voted against the resolution.
“Today’s action should be the final step to facilitate financing of the redevelopment costs associated with the TAD,” Gwinnett County Chief Finance Officer Maria Woods said.
The Exchange at Gwinnett is a major $350 million, 103-acre development project that will be located between the Mall of Georgia and Coolray Field. It is expected to include a Sprouts grocery store, Andretti Indoor Karting and Games, Top Golf, CMX Cinebistro, a Hilton hotel, Lazy Dog, Starbucks, MOD Pizza, Five Guys, Chipotle, City Barbecue, a food hall, a brewery, office spaces and residences.
The creation of a TAD last fall to support its development did not come without some controversy, however. Critics argued TADs have traditionally been used to redevelop a previously developed area, but the Exchange at Gwinnett is being built on land that has never been developed before.
A TAD designation essentially freezes the property value that taxes can be collected by the county and school system from the site. Taxes on the increased property value goes into a separate fund that will be used to pay off the debt service on the bond.
Fuqua officials argued last fall that the TAD designation was needed because of extra costs associated with the site, such as removing rocks from one side of the property and filling in ravines on another side. There were also steep slopes on the site, and Fuqua officials said there would be issues with getting water to the site.
“If you chose to create the TAD, what happens is the value of the property tax digest within the redevelopment area is established as the base value of the Tax Allocation District, and in this case, it’s a couple million dollars in taxable value today,” Fuqua attorney Sharon Gay told commissioners in December.
“From that point forward, if the county and the school board consents to participate, that property tax revenue on that base value will continue to flow to your general funds, so you’re not giving up any money, any tax revenue that you receive from the site today. Once the TAD is created, any new property tax revenue on that increased real property value resulting from the redevelopment of the property would go into a separate fund that can be used to reimburse the developer for redevelopment costs, which could include paying debt service on Tax Allocation Bonds.”