Beltline’s feasibility rides to forefront

By Ariel Hart

The Atlanta Journal-Constitution

Is the Beltline headed for the skids? Maybe not. But officials there can’t really say.

The Beltline, a proposed 22-mile loop of transit, trails and parks around Atlanta’s urban core, has a financial plan that relies on expected increases in development and real estate values within the project’s tax district.

That plan, however, was made four years ago, long before last year’s financial crash sent the
real estate market reeling.

Key to the plan were expectations about how property tax revenues would rise along the Beltline corridor, and it hasn’t been revised since 2005, Beltline spokesman Ethan Davidson said. Over 25 years, the plan calls for those increased tax revenues to generate $1.7 billion of the $2.8 billion project cost.

Beltline officials could not say last week whether they thought that $1.7 billion expectation was now too high or too low. Davidson said they would update the financial analysis next year, as planned, and would know then.

“It sounds like a simple question, but it’s not,” he said. “I can’t at this point in time tell you in good conscience without having done the analysis.”

At a recent legislative meeting, state Sen. Vincent Fort grilled MARTA CEO Beverly Scott on why his constituents couldn’t get a good answer on when the Beltline’s mass transit loop would get going. MARTA does not run the Beltline now, but it is investing $5 million in technical studies with the Beltline, and it has just begun negotiations in hopes of managing the transit project.

Scott, who has been open about a need for the state to allow more transit funding, responded to Fort with a bleak statement:

“What I can say to you, as well as all the other members of the committee, is that unless there is new funding that is found for transit, that we cannot afford one expansion program. I don’t care whether it’s the Beltline or I-20 East or any of them.”

Fort replied, “But that’s not how it’s being marketed.”

Scott said later that she meant to speak only about what MARTA could afford, not what some other agency could afford.

“There are whole aspects of the Beltline project and financing which I am not privy to,” she said.

Last year’s financial crash probably means things have changed for the long term, said real estate consultant Ken Bleakly, president of Bleakly Advisory Group. Still, he didn’t think the Beltline was down for the count.

“My guess is it’s just going to take them longer to achieve it,” he said. “You’re not going to get the new development as quickly and at the intensity you hoped.”

Sharon Gay, a lawyer who works to create tax districts similar to the Beltline’s, said the concept is still sound.

“The enticement to build along the Beltline is that there’ll be a Beltline,” she said.

Gay said developers she knew were still attracted to the idea.

And the city of Atlanta is still a big booster.

“There is no doubt that we are going through a temporary period of time where we will need to reassess,” said Luz Borrero, the city’s deputy chief operating officer. “But we believe that ultimately the project will have the funding it needs to deliver successfully on each one of its elements.”

Davidson emphasized that even in 2005 the Beltline’s financial plan expected to weather a long period including good and bad economic times.

He added that Beltline officials always knew they would have to find other funding sources for $1.1 billion of the project, whether that be private, state, local or federal funds.

“If anything might have changed, perhaps it will require a little bit more reliance upon other funding sources than we originally thought,” Borrero said.

Between 2005 and 2008 the value of development within the tax district doubled, Davidson said. That growth is generating additional tax revenues, which will provide the Beltline between $15 million and $19 million for 2009, he said. Private donations and the city of Atlanta have raised millions for the project.