Full Copies of Agreements between City, DDA, and Solis Developers in Tax Break Deal
Decide for yourself if Sugar Hill taxpayers got a good deal.
I attended all of the public meetings regarding the City’s tax abatement deal with the developers of Solis Sugar Hill. Later, I submitted an Open Records Request (ORR) asking for all of the contracts and memorandums of understanding between the City, DDA, and the developer. I got six (6) documents, which wasn’t even everything responsive to the request. And, I had to pay for them. It was only $8 and change, but still. I guess we need to make up the tax revenue shortfall somewhere.
The City could have asked someone who knew all about the deal to help the City Clerk get me everything. They could have provided it to me for free. They could have chosen to openly share everything on their website. They didn’t.
Elected officials also could have written about it or made a video for their social media pages way before now.
And, if this was a great deal that did SO much for the City, why didn’t they?
They all stayed quiet about this deal until I started sharing information about it during election season and people started asking questions and expressing disapproval. It’s pretty clear this was something none of us were meant to see.
And before anyone tries to throw the City Clerk under the bus, I am going to say that the City Clerk performs her duties as required by law, and she has absolutely no reason to hide anything here. On the other hand, the current City Council, City Manager, and the DDA ALL stand to lose something.
When this tax abatement became widely known to the public, they became exceedingly defensive and disrespectful, told some half-truths, and still concealed much of the relevant information. If there was a good case for this tax abatement, why not just answer all the questions and make a case?
But, you don’t have to take my word for it. Or Council Member Taylor Anderson’s. (Although, he gets SO visibly testy if you don’t.) I am giving you the documents that I have from the City in their entirety, in chronological order, so you can read them yourself. You can decide if YOU think this was a good deal for Sugar Hill. I made these PDFs searchable so you can look for dollar amounts or things I mentioned.
To the best of my knowledge, this is everything. I hope you will look. I have not misrepresented anything. I don’t have to.
I do this because I want people to be informed and take ownership of THEIR government. These folks work for you. For now.
If you don’t believe these are the actual documents, you can always do your own ORR. Maybe you should. The City could use more money after this deal.
THE DOCUMENTS
In July 2020, the City of Sugar Hill Downtown Development Authority signed a development agreement with Terwilliger Pappas outlining most of the deal. The key part of the deal is this:
“During the Due Diligence Period, Developer will seek the issuance of an inducement resolution by the Authority authorizing a fifteen (15) year bond financing package for the Project (commencing on the first calendar year following the issuance of the final certificate of occupancy for the Project), and on such other terms as are satisfactory to Developer (collectively, the “Bond Transaction”). The general terms of the Bond Transaction shall be as follows: (a) the Authority will be the owner of the Project for fifteen (15) years and shall lease same to Developer during some period, and the Project Site shall be tax-exempt while owned by the Authority, and (b) Developer and the Authority will negotiate the payment of a Management or Administrative fee to be paid by the Developer to the Authority. A Management or Administrative fee payable to the DDA shall be negotiated and shall be subject to mutual agreement of the DDA and the Developer once details of the Project are finalized.“
This first agreement said there would be 298 apartment units, 15,000 square feet of commercial space, and 700 parking spaces with 150 shared between the City and the developer, and 200 for public use. Those numbers change with different agreements, but the final numbers will end up being 294 apartment units, 12,001 square feet of commercial space, and 650 total parking spaces, with 150 shared public/private and 200 public.
The original Development Agreement gave the developer 150 days for a due diligence period, but allowed them to ask for a couple of 30-day extensions. They were supposed to pay $50,000 for each 30-day extension. Here is the first amendment to the original developer agreement, from December 2020. It allowed the developer to extend their due diligence period to February 2021 in exchange for a $50,000 deposit to the earnest money escrow account.
In January 2021, the City of Sugar Hill and the City of Sugar Hill Downtown Development Authority (DDA) signed a Memorandum of Understanding (MOU) that says the City will sell specified parcels to the DDA for $5 million so the DDA can work out a deal with Terwilliger Pappas to develop the property.
In February 2021, the DDA and Terwilliger Pappas again amended their original development agreement. This agreement acknowledges that the developer had previously exercised one of their rights to extend the due diligence period and placed additional money in an escrow account to do that. It again extends their due diligence period, this time until April 2021, but does not indicate that they placed additional money into the escrow account for that. It allows them to ask for up to two more 30-day due diligence extensions. They would not have to pay an extension fee for the first extension, but would have to pay for the second.
In April 2021, the DDA and Terwilliger Pappas signed a new “Amended and Restated” development agreement. This agreement changes the number of apartments, commercial space square footage, and number of parking spaces. It extends the due diligence period again, this time until July 2021. It also adds an “Administrative Fee” schedule, specifying part of the money that the developer will owe as part of its lease payments. This administrative fee schedule seems to be superseded later by a new administrative fee schedule in the Design, Development, and Occupancy agreement signed in November 2021.
In August 2021, the DDA and Terwilliger Pappas amended the new development agreement to extend the due diligence period to September 2021.
On November 8, 2021, the City of Sugar Hill and the DDA made a few changes to the original MOU from January 2021. Namely, the City indicates that they approve of the development plan and are willing to go ahead and transfer the property to the DDA. The City also authorized the DDA to use $4.95 million of the first lease payment (that includes a one-time $5 million land rent payment) from the developer as a deposit into the parking deck escrow account to pay for the City’s portion of the parking spaces.
A few days later, on November 12, 2021, the DDA and Solis Sugar Hill Owner LLC (formed by real-estate investment company PCCP and developer Terwilliger Pappas) signed a Development, Design, and Occupancy Agreement. This seems to be the final arrangement between the City and the Developer. It spells out the tax-exempt status of the project and project site. It also describes the rent payments the developer will pay, including a one-time land rent payment of $5 million, money to cover the repayment of the bond, and administrative rent, more commonly referred to as a Payment in Lieu of Taxes (PILOT) in these kinds of deals.
It states that the DDA will place $4,950,000 in an escrow account as a contribution to the cost of building the parking deck, but the DDA will not pay for the construction of the commercial space in the project.
Also on November 12, 2021, the DDA and Solis Sugar Hill Owner LLC signed a Parking Agreement and Commercial Space Agreement. These documents both contain condominium agreements that describe the City’s ownership of the parking spaces and commercial space within the Solis Sugar Hill apartment complex. These documents also describe the cost-sharing arrangement between the owners for certain expenses.
In December 2021, the City of Sugar Hill and the Sugar Hill DDA signed an Intergovernmental Economic Development Contract in which they agreed to the Solis arrangement, including the issuance of the $7.615 million bond for the project and the placement of $4.95 million into an escrow account to pay for the City’s spaces in the parking deck. Although the developer’s lease payments to the City are supposed to include money to cover the bond, the City agrees “to make payments to the Authority in amounts sufficient to enable the Authority to pay, among other things, the principal of, premium, if any, and interest on the Bond when due and will agree to levy an annual ad valorem tax on all taxable property located within the corporate limits of the City, at such rates within the three (3) mill limit or such greater millage limit hereafter authorized under applicable law, as may be necessary to produce in each year revenues that are sufficient to fulfill the City’s obligations under this Contract.”
I downloaded the Authorizing Resolution from the City’s website. This is the document presented at the December 2021 City Council meeting for a vote by the Council. This document states that the City of Sugar Hill officially approves the Series 2021C bond for Solis Sugar Hill and agrees to give DDA the money to repay the bond and levy up to 3 mils property tax if necessary to produce sufficient revenues to meet this obligation.
And finally, the minutes from the City Council vote on the Authorizing Resolution in December 2021. The vote was unanimously in favor of the resolution. This was the first full meeting for Council Members Mason Roszel and Jenn Thatcher. Although both were just sworn into office the month before, both voted for the resolution approving the bond that was a critical part of this deal providing the tax abatement for the developers of Solis Sugar Hill apartments.
Both Brandon Hembree and Mason Roszel were members of the DDA during the execution of this deal.
