Where's the *actual* redevelopment?

Government serves a valid purpose, but rarely does that purpose extend to its entry into otherwise efficient markets. It is undisputed that coming out of the recession and banking crisis, multi-family developments located on Franklin Gateway were distressed assets. However, these were also the type of assets that attract investment as real estate markets recover.

Between 2015 and 2023, investment capital poured into underperforming multi-family properties across the US with the goal of converting Class C and D multi-family to Class B multi-family developments. 

For example, 1035 Franklin Gateway is a Class C apartment complex built in 1970 that was similar to those projects acquired by the City of Marietta. The city did not acquire 1035 Franklin Gateway. Instead, the property was sold to an investor who made significant capital improvements.

In 2014, 1035 Franklin Gateway was valued at $4,030,000 and paid Marietta taxes of $38,713.80. By 2025, after additional investment and upgrades, the property was valued at $34 million and paid $308,203.20 in Marietta taxes.

875 Franklin Gateway is a similar story with investor capital producing a 382% increase in value and a $359,000 increase in annual property tax.

Since 2014, these two properties, left unmolested by government action, have added $70 million to the Marietta tax digest and $628,790.45 to annual tax collections – and it did not cost the citizens of Marietta a dime.

In contrast, in 2013, Marietta issued $68 million in bonds for what can only be described as land speculation – allowing the purchase and demolition of multi-family projects and the sale of the residual land.

To date, bond proceeds have been used to acquire four properties at a total cost of $43,000,000 with another approximate $10 million spent on demolition of the apartment units located on those properties. Subsequently, three parcels were sold yielding net proceeds of $23,347,180 and a third parcel was placed under a ground lease to Arthur Blank’s professional soccer team. The estimated capitalized value of the ground lease is $7.5 million. The $53 million investment to date has yielded cash and a long-term ground lease having a combined value of $31 million.

A significant number of housing units were lost, and, other than some soccer fields, no actual redevelopment has been completed. Marietta’s “buy high, demolish, and sell low” strategy managed to defy the market and achieve losses exceeding $22 million during a timeframe when multi-family properties were producing historically high investor returns. 

The city’s argument that its purchase of the distressed property was the catalyst for improvement of adjacent property is flawed. Those improvements are entirely attributable to market recovery and capital investment. No action taken by the city in conjunction with Franklin Gateway can be correlated with value appreciation – people don’t select investments based on proximity to soccer fields. 

Comparing the 2014 and 2025 tax digest and tax collections, the net effect of the city’s incipit attempt at playing Monopoly with our tax dollars has been a 13% increase in the Tax Digest associated with the acquired properties compared to an average 482% increase for the properties discussed above that were not subject to city intervention. 

Now, our Mayor and Council have decided to purchase another tract of land with the only logical reason being to facilitate another sweetheart deal for Mr. Blank’s newly acquired women’s soccer team. Assuming a ground lease like the deal made with the men’s team, this transaction will culminate in a capitalized ground lease having a value of roughly $8 million – $10 million less than the $18.5 million purchase price of the property, and the removal of another $15 million from the city’s tax digest. 

To date, nothing has been developed, over $22 million in tax dollars have been squandered, jobs and housing have been lost, and the growth in the Tax Digest has been stunted.

This begs the question of whether the 2013 Redevelopment Fund was ever intended for use in actual development. If so, one would have to conclude that we failed miserably.

Alternatively, one could assume that redevelopment was never the intent of the 2013 bond issuance, with the goal always being to use the proceeds as a vehicle through which the mayor could banish citizens he found to be undesirable and with the added benefit of kowtowing to Mr. Blank with sweetheart ground leases that produce minimal, if any, economic benefit to the city.

In the interest of government transparency, I suggest the renaming of the “2013 Redevelopment Fund” to the “Blank/Tumlin Man-Crush Fund.”

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The above article, written by Nora’s husband Richard Gaudet, was published in the Marietta Daily Journal.