Redlight The Gulch Litigation

$17,120 of $30,000 goal

Raised by 176 people in 5 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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Antonio Brown, the anti-Gulch candidate in the Council District 3 race, won the runoff last night. Thank you to all who supported Antonio. Let's hope the result is seen by other elected officials as a signal that backing Bucks for Billionaire Boondoggles is bad politics. Stephen Deere has a good take on what was at stake in this race:
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The Gulch deal is a hot issue in next Tuesday’s Atlanta Council District 3 runoff election. At yesterday’s debate on WABE, Rose Scott asked the candidates how they would have voted on the Gulch.

Antonio Brown answered, “I’d have voted No.” He mentioned our legal challenge; decried the lack of jobs brought by the development compared to the billions in tax abatement; and pointed out that schools need the money.

Byron Amos also claimed he would have voted No, but Brown asked why in that case Amos voted Yes on the Gulch deal when he was on the school board [last December & January].

Mr. Amos claimed that without the deal “the City could expand or increase any TAD without the written permission of the school board. In addition the deal added $20-30mm back into the school budget.”

Mr. Amos's excuse for supporting the Gulch deal makes no legal sense. The Georgia Constitution expressly requires school board agreement for extending TADs using school taxes. APS originally agreed to participate in the Westside TAD only until 2023, so they had no obligation to fund the Gulch.
Last December, Mr. Amos opposed the majority on the school board who then refused to participate in the Gulch deal.
Far from helping the schools budget, APS's January about-face cost the schools about $520mm net over the next 20-30 years.

The Redlight the Gulch Coalition is an informal group that does not endorse candidates. We do seek to inform the public on the Gulch deal.
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Four months have passed since the City filed their Gulch deal with the court - and the deal is still not validated. In fact, in a Council resolution this week, the City and the developer admitted that it may never be validated. This surely confirms that we were right to intervene. Without validation, the Gulch billionaires will not get a massive public subsidy from taxpayers.

The court has its work cut out sorting out the many legal problems with the deal, including the City’s dubious attempts to ram the deal past the Schools and County and even City Code. Our legal team continues to present written briefs to bolster our objections. The ball remains in the judge’s court, which doesn't bother us - though it seems to make the other side anxious. Stay tuned!
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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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Raised by 176 people in 5 months
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