At a Feb. 19 called meeting, the Covington City Council voted to waive $1.4 million in fees and costs to try to spur construction of 350 units of what was described as a “luxury, Class A, high end, multi-family development” at Covington Town Center and in turn, try to boost commercial and retail development at the site.
The council vote came after Dave Tracht of Elevation Development Group of Atlanta, the company looking to develop the project, told members that the company was having trouble raising capital for the project.
“We have struggled in the capital markets to find capital partners to bring this project to fruition,” Tracht said,” We have a lack of comp projects we can point to in the Covington marketplace. You really would have to get closer to Decatur to find a comparable project.”
Tracht said investors that his company has approached, including some who have come to tour the area, have looked at the project and decided they weren’t comfortable making the investment. He said some of the investors have asked if the project is getting any monetary incentive from the local government.
“A number of groups will ask us if we are getting some sort of contributory incentive from the city, which we haven’t been able to give an affirmative answer to that,” he said,” There are capital groups that we have come across that that is a requirement for them- to see participation from the city or county.”
Tracht told council members that his company had requested $3.5 million through the Office of Economic Development but was told that the amount was not feasible.
“Depending upon the result we get here, with the city - for which we will be grateful- we will determine our next best path,” he said.
The $3.5 million included $1 million for permit/tap fees, a parking lot at a cost of $1.8 million, five acres of greenspace for a cost of $277,000 and electric infrastructure costing $456,000.
Tracht told the council that the city’s participation was critical to the project moving forward.
Mayor Steve Horton suggested that any incentives approved by the council should be contingent on the city successfully negotiating contracts to secure its interests.
The council voted unanimously to waive the $1 million in permitting costs and water and sewer tap fees along with $456,000 electric infrastructure costs “in an effort to stimulate growth beyond just residential development at the Covington Town center overlay as it has been strongly suggested that future commercial and retail development can be hindered without this development being brought to fruition.”
Tracht said his company hopes to break ground on the project before too long.