$30 million in revenue bonds sought for Lofts at Hamilton project

Oct. 13—A Whitfield County Superior Court proceeding is scheduled for Monday that would confirm and validate $30 million in taxable revenue bonds associated with a multifamily project.

"This is essentially a bond deal that was done probably in 2020, 2021," said Dalton-Whitfield Joint Development Authority (JDA) Executive Director Carl Campbell. "It's just actually an expansion because inflation has been a little bit nutty — so we basically redid the bond with a higher bond amount."

The revenue bonds would be issued to HMC Holdings Inc.

"Over on Broadrick Drive there are some new apartments called The Lofts at Hamilton," Campbell said. "These are market-rate apartments ... and the property is owned by Hamilton Health Care System, they've done a ground lease with a company called Sierra Development, it's also under Argus Eyed."

Campbell said the hospital wanted to be an "agent for change" in the Dalton housing market.

"We've worked on multifamily apartment projects every year and for many years none of them came to fruition," he said. "And the reason is the banks just don't really like our community for those kinds of projects because they're afraid that if there's another housing recession, that the tenants won't be able to pay the rents."

Even now, he said Dalton is considered something of a "one-industry" town.

"So that's kind of a knock on us from that development standpoint," he said. "The other part of it is there's nothing like it ... if you're building a unit that you're going to have to charge a dollar, $1.25 or $1.45 a foot for rent and there's nothing in your community that's renting for that, then you don't have a comparable that tells the bank that you can be successful."

The tax abatement, Campbell said, is meant to encourage banks "to accept the risk and do the loan" associated with the development.

"The Georgia Constitution has an anti-gratuities clause, so this bond for title transaction essentially puts the property in the development authority's name and then over time — through payments in lieu of taxes (PILOT), fees and taxes — they buy back the interest of the property," Campbell said. "So they pay for all the legal costs associated with the project, they pay the taxes after the discount ... and this particular project, they have continued to pay the taxes on the land, they continued to pay the taxes and will always pay the taxes on the land."

The discount, he continued, comes in the form of new tax revenues created by the development itself.

"Then it's an asset on the tax rolls from now until the end of time, real property never depreciates," Campbell said. "So this will be a good addition to our tax digest for the long term."

Neither the city or county governments are "on the hook" for the development.

"There's no credit worthiness that's leaned on or anything like that," Campbell said. "It's all funded, it's all covered by the organization building the apartments."

The development, he said, consists of three buildings.

"Two of them are being occupied now and the third one will be complete soon," he said. "About 200 units, they had their first building open up about a month ago."

Campbell said he expects the third building to open before the end of the year.

The full project will include 84 one bedroom, one bathroom units, 110 two bed-two bath units and 24 three bed-two bath units.

"I think that site is a 12-acre site," Campbell said.

Funding via the Georgia Department of Community Affairs (DCA) was not sought for the HMC Holdings multifamily development.

But Campbell said other multifamily developments within Whitfield County have pursued such resources.

"We've got another development in town called Crow Valley Heights that was what they call a low-income housing tax credit (LIHTC) development, so there are tax credits involved," he said.

That project, he said, consists of about 70 units.

"There are no local incentives there," Campbell said. "But some state tax credits to help make that work."

Another market-rate, multifamily project in the works is the roughly 220-unit Hammond Creek development near the northern bypass.

"There was a tax allocation district incentive awarded by the city for that project," Campbell noted.

Another housing project is proposed at the site of the old county jail facility.

"That is also market-rate apartments," he said. "About 214 units and that's a five-story complex."

That location, Campbell said, had been off the tax rolls for about half a century.

"And it had been unoccupied for about the last two decades," he said. "We worked hard to try to get a deal done there and I'm very excited about what's happening there."

The old Budgetel site off Thornton Avenue, Campbell said, is being converted to a unique housing development called Dalton Station.

"These are what they call 'micro-apartments,'" he said. "These are small, fully furnished, nice units that are great for students or corporate use for people who are going to be in for six months or a year, something like that."

When it comes to economic development, Campbell said housing availability is instrumental in the "battle for people."

"If you look at the communities around us, there's a lot more housing going up," he said. "Our companies cannot be successful if they don't have people to do their processes. So we're going to have to continue to try to move the needle and increase the stock of housing in our community to the point that it's adequate."

A healthy housing stock, he said, is about four to six months of inventory.

"We have about five or six weeks," he noted. "So we need to make sure we have the right quantity of housing and apartments available, we need to also make sure that they have the right quality and the right price points and amenities that folks are looking for at all stages of income and life."

Campbell said he expects to see plenty of apartment units pop up in the community during the next 18 months.

"I think what is prudent and wise is that we reevaluate the market where it is at that time and determine what the community needs to go forward," he said. "But the goal for the projects that we did was to prove the market ... if these apartments fill up, if these developers are successful, then other developers will believe that they can be successful, too, and come do their thing."