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Redlight The Gulch Litigation

$16,550 of $30,000 goal

Raised by 169 people in 4 months
The City of Atlanta's Bucks for Billionaires Gulch Scheme that passed Council on Mon Nov 5 would short schools and public services of $1.44 Billion. Residents would end up holding the bag - yet would own no share of this huge private development.  

This really has been a fight over what sort of city Atlanta is going to be - one run for all residents or one run for a few powerful, wealthy insiders by their pawns. Six Council Members stood firm with their constituents and we should all support them.

The Gulch Scheme has several legal vulnerabilities. Now we're forced to fight it in court, we are ready to do so.  Our crack legal expert has already warned council that the sales tax exemption part of the scheme is unconstitutional. See his letter and an explainer on RedLightTheGulch.com.
Preventing this scheme from going through would save every family in the city $13,000.

Sadly, litigation is not cheap, even with attorneys working at steeply cut rates.  We'll need to raise $30,000 quickly to pay the legal team to prepare filings and object at the bond validation hearings and, if necessary, to appeal.  Since the Gulchies rushed their scheme past Invest Atlanta on Nov 8, the court date could be in the next few days.  

It's now or never. If bond validation is not challenged, the scheme is locked in.

Hundreds (perhaps thousands) of constituents have been outraged enough to protest to their council members and attend meetings to show opposition.   Many supportive people have now contributed. We're on our way! 

Please contribute what you can - and get like-minded friends to do the same - to head off a scheme that would cost every resident and every public employee of this city. Let's send another signal to today's leaders that the Atlanta game has to change.

 Any money left over will go to the Atlanta Community Food Bank.

This Gofundme Fundraiser is being run by Julian Bene of Atlanta, GA - the person interviewed by WSB's Richard Belcher in the video clip above. Julian Bene is a member of the Redlight the Gulch Coalition that has campaigned against the Gulch Scheme and its BillionDollar Plus public giveaway.  (A quick Google search on "Atlanta Gulch Julian Bene" will show several articles and op-eds in the Atlanta Journal Constitution and in other Atlanta media reports.) As stated above, the funds are being raised to pay the legal costs of objecting to Gulch bond validation. So Julian Bene has paid for a court copy of the ~1,700 page bond petitions and exhibits. And he will pay the rest of the money contributed to this Gofundme to the attorneys on the Redlight the Gulch Coalition's legal team. The Gofundme money may be supplemented by contributions to these legal fees and expenses from other allies of the Redlight the Gulch Coalition.
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Last Thursday’s bond validation hearing did not settle anything. We’re still waiting for the judge to make decisions on key procedural issues and on bond feasibility itself. As with any litigation, it is very difficult to predict the outcome. This update gives our view of some key elements of the case. It goes far more deeply into the legal weeds than previous updates. As contributors, you may be interested in some of the complexities of challenging this billion-dollar deal.

One of the City’s outside lawyers has been in contact, claiming not to know what Gulch opponents want. We want to defeat the Gulch scheme because it diverts a massive amount of tax revenue from providing public services like schools to subsidizing a billionaire’s private real estate project, with no real and substantial community agreement for public benefits commensurate with a $1.9 Billion subsidy. The proposed bond package has serious legal problems. We want the courts to uphold the law and stop the deal.

We had told the court last week that we’d discovered the City’s bond counsel appeared to have been engaged in clear violation of City Code, with neither a competitive process nor a Council resolution. It was mystifying that the judge did not require the City Attorney’s representative to explain what happened. City Council needs to assert itself on behalf of citizens and insist that the administration follow the law when hiring million-dollar outside attorneys. The legal effect could possibly be to render every filing they have made in these bond proceedings ultra vires and void, and, as the judge mentioned, there may also be a question of fee disgorgement.

We showed evidence at the hearing that Atlanta’s TADs greatly exceed the state cap of 10% of total city property value, so no new TADs could be created. One of the legal objections to bond validation is that the Gulch TAD quacks like a new TAD. Mayor Bottoms herself texted that it is a ‘synthetic’ TAD – which is certainly new. It keeps future Gulch property taxes for the Gulch developer and away from the Westside TAD, with its own bond and its own pay-as-you-go rules. Gulch TAD dollars are segregated from Westside TAD revenues, which are spent at the discretion of the board of Invest Atlanta.

We also pointed out on the stand that it is not economically sound to build offices downtown, which is the bulk of what the developer claims to be planning. The cost of construction (~ $ 425 / foot) greatly exceeds the value of the most prestigious downtown office towers (~ $250 / foot), even before the exorbitant platform over the Gulch that the developer proposes.

The developer has managed so far to avoid answering questions that would tell the court whether they really have a solid plan in place. Have they put a project team in place, done a market analysis that supports the sketchy revenue projections in the bond package, acquired all the parcels of land, lined up tenants, lined up financing, done enough engineering, design and transportation work to show physical feasibility and so on? If not, there’s no project to validate and the law of bond validation requires some showing of a definite plan.

We briefly argued another objection before the judge: that the Fulton County Commission has to approve any projects in the Westside TAD area financed after December, 2018, but has not voted to approve the Gulch. Since the Gulch deal has not been validated or received any public financing, it seems clear that the deal cannot be validated as it stands.

What’s next? It depends how the judge decides on letting the City bring the January 7 APS – City TAD agreement into the case. If, over our opposition and Georgia precedent, the judge allows this, we would have an opportunity to raise additional objections. That would draw out the proceedings even further. Alternatively, if the judge does not allow the January 7, 2019, actions to come into the case, we have already moved for the Court to find in our favor.

The City actually contends the January 7, 2019 Resolutions concerning an agreement with APS are unnecessary for bond validation, because the City argues the December 7, 2018 APS Resolution had no legal effect – meaning the City is taking the position that APS was required to participate in funding the Gulch project through December 31, 2038 - even if APS declared on December 7 that it was not going to participate. Obviously, our position with the Court is why include the January 7, 2019 Resolutions in the proceedings if the City says they are unnecessary– especially since the Court would be on very shaky procedural grounds by including a purported agreement which was not part of the original notice to the public when these cases were filed in November 2018. There is very clear and recent Georgia Supreme Court precedent on this exact notice to the public issue.

On the other hand, the City's legal argument that the December 7, 2018 APS Resolution had no legal effect in funding the Gulch project has a zero chance of prevailing – so the City's lawyers have for the moment placed themselves into a procedural and substantive “straitjacket” – which might even require the City asking the Court for permission to dismiss the proceedings and start over.
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Curbed picked up our latest Redlight Gofundme update today! All publicity is good publicity, since we're the revolutionaries against big money's redcoats!
(Those of you good and civic-minded contributors who know my origins and accent will appreciate the irony there.)

https://atlanta.curbed.com/2019/2/18/18229205/redlight-downtown-gulch-redevelopment-cim-group
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You may be wondering what’s going on in the Gulch case that you are helping to fund. The next hearing on the TAD bonds (property tax break) is scheduled for Feb 21. Behind the scenes, the lawyers have been filing motions back and forth with the court on multiple aspects of the case. In a public communication like this, it’s best to be cautious, but a few comments will give you some of the flavor.

One big unresolved issue remains whether the judge will allow the Jan 7 deal between the City and APS into the case. There are strong precedents against this. We want to see the case judged as it stood when the City filed their bond package, before the school board caved in. That would prove that APS had no obligation to let $312mm of our school taxes be used to subsidize the developers. APS never agreed to participate in the Westside TAD beyond 2023, as a judge explicitly noted back in 2008 when excluding APS taxes from another bond validation.

We have dozens of other legal objections to the Gulch deal. One is that the Gulch TAD is a new TAD, which the City is not permitted to create because TADs now greatly exceed the 10% cap on the share of the city’s total property value. That cap is part of state law. It is intended to protect taxpayers from local officials going hog-wild on developer handouts that drain tax revenue to fund services to residents. Sound familiar?

Another objection is that this Gulch project, despite the 1,700 pages of the City’s filing, is incredibly vague, which Georgia precedent forbids. The more one studies the filing and listens to the City’s evidence, the less serious their massive purported office / retail plan sounds. So the deal is legally vulnerable from many angles.

It’s inevitably costly to mount a case against a billionaire giveaway. For example, we recently sent the court reporters a check for $2100 for transcripts of just one of the hearings. And we’ll have to be ready to fund an appeal. So please do tell your friends that this is a worthwhile battle that needs contributions from more than 150 civic-minded people. Every resident in the city will benefit if we defeat this outrageous giveaway. Let’s not let Big Money win for want of the bare minimum of legal funds. Thank you!
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Three news items related to the Big Gulch Giveaway.
1. The judge has postponed the next Gulch bond hearing until Feb 21 or 22. The case is clearly not over.

2. In the Stadium case - where citizens claim the Falcons should pay property tax since they effectively own the building (even though taxpayers paid for about $700mm of it) - the appeals court sent it back to Fulton Superior Court, who had dismissed it, for a re-do. It's worth challenging these deals if there are good legal arguments, as in the Gulch case.
https://www.ajc.com/news/local-govt--politics/group-claims-mercedes-benz-stadium-should-paying-property-taxes/FgHL3su1jUgnXOk9Lf8XeJ/

3. Property tax breaks worth $95MM to big Midtown office developers are on the agenda of Fulton Development Authority today. This crony game will continue at the expense of schools, city and county and us taxpayers if we don't fight it. There are hints the new Fulton state delegation will curb the Authority's giveaways. Let them know your views!

Thank you for all your support. - Julian
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