ALPHARETTA, Ga. — After nearly a year of study, the City of Alpharetta has submitted an application to create an opportunity zone within its struggling North Point District.
Approved through the Georgia Department of Community Affairs, an opportunity zone provides qualifying employers the highest tax credit available through the state — $3,500 per created job with a minimum of two jobs. The credits can be used against a company’s state income tax and withholding tax liability, and they are available to any business, including retail.
At the council’s final business meeting of the year Dec. 14, Alpharetta Economic Development Manager Matthew Thomas said to qualify for the designation, the city has documented all the elements needed to establish the area as economically distressed.
The zone includes close to 600 acres bounded by Ga. 400 to the north and west, Big Creek to the south and Haynes Bridge Road to the east. The zone includes retail hubs, like North Point Mall, and 35 acres of residential tracts, including two apartment complexes.
In its recently released North Point Redevelopment Plan, the city says mall vacancy has risen above 29 percent, and average sales per square foot for remaining tenants have been declining significantly since 2014. Surrounding properties are likewise affected, the report states. Data collected from the U.S. Census Bureau show two neighboring residential tracts with poverty rates at or above 15 percent.
Office properties within the redevelopment area showed a vacancy rate of 12.2 percent in 2017, compared to the city’s overall vacancy rate of 10.4 percent, according to CoStar, a commercial property tracking service.
City Finance Department records show the rate of business closures within the redevelopment area has been climbing over the past decade, with a high of 69 closures in 2018. Some of the recent victims include Sears, Toys “R” Us, La-Z-Boy, Thomasville Furniture, AMC Theater and Hudson Grille.
Thomas said the city has nothing to lose and a lot to gain. There is no cost in applying for the opportunity zone status, he said, and his department has compiled the latest figures on crime and unemployment to include in the report.
“I believe we have satisfied all the criteria the DCA is asking for,” he said.
If approved, the North Point site would become Alpharetta’s second opportunity zone. The city won approval for an opportunity zone for an area at Westside Parkway and Windward Parkway in 2012. That area now supports more than 1,500 jobs.
Alpharetta has a huge stake in revitalizing North Point.
Right now, the area generates over $1 billion in retail sales and pays out more than $10 million in property taxes to the city, county and school district annually, according to Gary Mongeon, senior vice president with Bleakly Advisory Group.
In 2017, the Atlanta Regional Commission awarded a $125,000 grant to launch a Livable Centers Initiative study as a means of transforming the area into a walkable economic ecosystem.
A year later, the owner of North Point Mall announced plans to construct a mixed-use development on the site of the abandoned Sears property that will include 325 apartments, three restaurants, walking trails and green space amenities.
Late last year, the city established a tax allocation district for the North Point area that will provide future funding for infrastructure improvements by diverting a portion of future property tax collections.
Estimates compiled for the city by Bleakly show the district could receive anywhere from $65-$88 million in funding for these improvements over 25 years if the county and school district consent to be a part of the TAD.