The Atlanta Beltline on Wednesday announced it is launching a $2 million incentive fund to encourage developers to create affordable commercial spaces.
The Local Developer Incentive Fund will award grants to applicants that reserve retail and office space at rents below market rate within their Beltline-adjacent projects. Grants will range from $150,000 to $500,000 and require affordability metrics to be met for at least 10 years.
Beltline officials said the fund is designed to counteract increasing commercial rent costs that act as a barrier to small businesses along the popular 22-mile trail loop. It is also a pilot program that, if successful, could serve as a model for the rest of Atlanta.
“There isn’t a national playbook on this,” Kelvin Collins, the Beltline’s vice president of economic development, told The Atlanta Journal-Constitution. “We are writing the script as we go along.”
The Beltline’s influence extends beyond the width of its multiuse concrete trail.
Credit: Miguel Martinez-Jimenez
Credit: Miguel Martinez-Jimenez
Some Atlanta neighborhoods have been transformed by development that runs along the trail, creating new skylines filled with apartments, hotels, office buildings and shopping centers. In other areas, real estate speculation fueled by a nearby Beltline path has stoked fears of gentrification.
The Beltline has multiple programs targeting housing affordability, many of which mirror federal initiatives. For example, new residential projects near the trail must have a certain percentage of units set aside at rents below market rate based on the area median income, a metric used for federal affordable housing programs.
There isn’t a nationwide contemporary for affordable commercial spaces, but Beltline President and CEO Clyde Higgs said development and community preservation do not have to be mutually exclusive.
“We want to ensure that residents and visitors alike experience the authentic, locally-owned businesses that represent the true spirit of our city,” he said in a news release.
The Local Developer Incentive Fund is intended to create affordable spaces within privately owned projects. Separately, the Beltline also owns several large parcels slated for large development projects and wants to use land it controls to reserve affordable business space.
Credit: Courtesy of Atlanta Beltline / LoKnows Drones
Credit: Courtesy of Atlanta Beltline / LoKnows Drones
Supported by 2016 bond proceeds designated for economic development, the fund applies to new construction projects and recently completed developments seeking tenants. The program will be administered by the Center by Lendistry and enforced by a newly created Beltline Commercial Affordability Consortium.
To qualify, projects must be located along the Beltline and include some form of discounted commercial rent compared to market rates. Terms include claw back measures if those reduced rates are not maintained for at least a decade.
Collins said applicants can be flexible on the rental discount they provide. He said the goal is to bridge the gap that prevents small businesses from affording space along the Beltline, so that could manifest in steep rent reductions or other flexible lease terms.
“We’re trying to see if this $2 million (budget) can begin to sort of address that gap and bring things into balance,” Collins said. “If it does, great. If it doesn’t, then we go back to the drawing board, and we continue to iterate and refine the effort.”
Credit: Erin Sintos
Credit: Erin Sintos
Qualifying tenants must meet small business income and employment thresholds. They can’t have more than 20 employees, must have an annual gross revenue less than $1.5 million and can’t operate other locations in Georgia. Applications close Oct. 24.
“Our vision is that development and affordability should go hand-in-hand,” Collins said.
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