TADs: How they worked elsewhere

chwright@macon.comDecember 8, 2012 

WARNER ROBINS -- The city of Warner Robins may join several Georgia communities in using a special tax district to redevelop blighted areas.

Tax allocation districts, in which increased property tax revenue can be used for redevelopment, were first allowed in 1985 when the state legislature passed a law allowing local governments to issue bonds to fund development.

Over the past seven years, TADs have become a popular tool around the state, said Department of Revenue Communications Director Jud Seymour. There are now 64 certified tax allocation districts statewide, he said.

David Sjoquist, a local government researcher and Georgia State University professor, said the success in Atlanta has drawn interest from the surrounding communities and across the state. In addition, a 2004 amendment to state law gave governments more flexibility in regard to the special districts.

“Third, federal funding for community development was less available,” Sjoquist added, “and anti-tax sentiment encouraged local jurisdictions to look for alternative ways to fund new community development efforts.”

Atlantic Station

When tax allocation districts are mentioned among officials and experts, Atlantic Station is often given as a standout example.

Developers once shied away from the area because it was primarily the contaminated remnants of the Atlantic Steel Mill. Developers avoided those added project costs.

With the help of the U.S. Environmental Protection Agency and several organizations, the city outlined a plan to turn the 138 acres into a mixed-use development serviced by MARTA.

Atlanta-based Jacoby Development agreed to build a shopping center, hotel and residential housing if the city brought the property back to ground zero. In 1999, a tax allocation district was put in place, allowing the city to pay for the infrastructure.

Now -- even with a couple of developer changes -- Atlantic Station is a flourishing destination center for the city. Just off of Interstates 75 and 85, it sits north of downtown and west of Midtown.

Officials from across the state, including Sjoquist, tout the TAD as a success.

Repeated attempts to speak with representatives from InvestAtlanta, the Redevelopment Agency of Atlanta, were unsuccessful.

Westside

In a 2004 report on tax allocation districts in Atlanta, Georgia State University researchers found Westside, Atlanta’s first tax allocation district, to be its most embattled.

Like several other Atlanta TADs, Westside -- originally known as Techwood Park -- was set up as a general TAD, meaning no specific project was identified when the district was established in 1992.

Before a full plan could be devised, the city was selected to host the 1996 Summer Olympics. Georgia World Congress Authority bought most of the district to build what is now Centennial Olympic Park. As public property, the developments didn’t contribute to the TAD fund.

The city regrouped and expanded the area in 1998 to bring in taxable property to Vine City and English Avenue, historic neighborhoods that had become blighted.

The TAD has since rebounded, but the 2004 report found development would have happened naturally. Also, revitalization isn’t widespread in the district. Entire blocks still have boarded up windows, pothole-ridden streets and unkempt grass lots.

Macon

In 2010, Macon joined the tax allocation district phenomenon. City Council created three TADs: Renaissance on the River, downtown near the Ocmulgee River; Bibb Mill Center, downtown east of Interstate 16; and Second Street Corridor, between Little Richard Penniman Boulevard and the Macon Coliseum.

Developer Renaissance on the River LLC, owned by former Mercer University president Kirby Godsey, has proposed the purchase of the nearly 12 acres for about $1.16 million. It has 18 months to do so. The developer’s multiphase plan includes office buildings, a 42-bed hotel, condominiums and a parking deck.

Latest estimates have called for $49 million in private money and $8.3 million in public infrastructure.

Chris Floore, city spokesman, said the city won’t fund any of the TADs until private investors commit to development.

“It’s kind of a chicken or the egg kind of deal,” Floore said. “These things need to work in tandem,” or the city could risk issuing debt the TAD won’t pay for.

City Council is also working to expand the Second Street TAD, nearly doubling its size and projected infrastructure costs to include property intended for a streetcar station near Mercer University’s new football stadium.

Floore said some interest has been shown in the Second Street TAD. However, property values in the TADs haven’t increased much yet, he said.

“They hadn’t been in place long enough to see that kind of in-growth” needed to generate TAD funds, Floore said.

Information from Telegraph archives was used in this report.

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