Mayor Kasim Reed: Atlanta has reached new Beltline deal with APS

Mayor Kasim Reed: Atlanta has reached new Beltline deal with APS

2005: The city of Atlanta —- then led by former Mayor Shirley Franklin — enters into an agreement with Atlanta Public Schools and Fulton County to create the Beltline tax allocation district.

June 2006: Attorney John Woodham files a legal challenge to the use of school taxes in tax allocation districts.

July 2006: Atlanta Beltline Inc., the nonprofit overseeing the buildout, is formed.

Feb. 2008: Georgia Supreme Court sides with Woodham.

Nov. 2008: State Legislature takes issue to a referendum, and voters approve the use of school property taxes for TADs.

2009: State Legislature changes Georgia constitution in accordance with the referendum.

Aug. 2009: City and APS strike an amended deal, upping the amount of money the Beltline TAD would send to APS.

Nov. 2009: City and APS sign a second amendment to the contract.

2012: City officials make moves to renegotiate terms of the deal.

Oct. 2012: The Beltline’s Eastside Trail opens near Piedmont Park.

Dec. 2013: The Beltline TAD makes its first payment of $1.95 million, originally due Jan. 1.

Jan. 2014: APS Chief Financial Officer Chuck Burbridge sends letter to city suggesting ways the Beltline debt can be paid, including by giving APS the Civic Center. Atlanta withholds a $6.75 million payment due this month.

June 2014: Outgoing Superintendent Erroll Davis, in an interview with the AJC, says all options are on the table for resolving the debt, including a lawsuit. Atlanta Mayor Kasim Reed slams Davis for threatening litigation, saying: “Nobody’s going to negotiate at the end of a gun. So, if you’re going to take hostages, you’d better be ready to shoot the hostages.” Atlanta Council President Ceasar Mitchell calls for truce in deal.

July 2014: APS and Atlanta City Council members meet to discuss the conflict.

August 2014: Documents emerge showing that attorneys for Atlanta and APS traded threats and barbs over the Beltline conflict.

Nov. 2014: The Beltline’s $43 million Westside Trail breaks ground in Southwest Atlanta.

Dec. 2014: APS parent groups call on city council members to sign pledge to pay APS what it was owed per the existing contract.

Jan. 2015: Atlanta withholds another required payment, worth $6.75 million. Reed and Mitchell spar on radio and television over Mitchell’s proposal to set aside millions from the city’s reserves to pay APS, pending a new deal.

Feb. 2015: APS Superintendent Meria Carstarphen says Reed is withholding deeds to surplus school property, preventing APS from being able to sell the vacant buildings. Reed says Carstarphen “doesn’t know what she’s talking about” and says the deeds are part of Beltline negotiations.

March 2015: State Sen. Vincent Fort, D-Atlanta, weighs in on Beltline dispute, introducing a bill that would require the Beltline to first pay the school district before spending money on development.

May 2015: Atlanta Beltline Inc. CEO Paul Morris says the dispute is harming the Beltline’s ability to grow by halting its ability to get loans or sell bonds.

Dec. 2015: Mayor Kasim Reed’s administration makes a $9.1 million “good faith payment” to APS as the talks continue.

Jan. 2016: Atlanta City Council members Felicia Moore and Mary Norwood raise questions about the payment, asserting Reed circumvented city code by spending money without prior authorization. City Attorney Cathy Hampton defends the payment as lawful.

Understanding the conflict over the Atlanta Beltline

At issue is a contract first brokered in 2005 between former Mayor Shirley Franklin and then-Superintendent Beverly Hall that established the Beltline tax allocation district, or TAD.

Under the agreement, which was amended twice in 2009, Atlanta is required to make $162 million in a series of fixed payments to APS in exchange for using a portion of school taxes for Beltline development.

But citing effects of the recession, the city was nearly a year late in paying a $1.95 million debt in 2013, and then withheld the next two scheduled payments worth $13.5 million combined. City and school leaders have been at odds as they attempted to renegotiate the contract, and the Atlanta Beltline has struggled to secure new loans or issue bonds because of the financial uncertainty.

On Friday, Mayor Kasim Reed’s administration and APS leaders announced a new agreement in how to fund the revitalization project.

Standing together near the Atlanta Beltline’s Eastside Trail Friday, city of Atlanta and Atlanta Public School officials announced a long-awaited deal over funding of the popular trails and parks project.

“The smoke has come from the house of cardinals at the Vatican. We have a deal,” Mayor Kasim Reed declared to cheers.

Resolving the issue signals “a renewed partnership” between the city and the school system, APS board chairman Courtney English said.

The news brings to an end years of conflict between Reed and school leaders that began in 2013, when the Beltline was first unable to make required payments to APS in exchange for using school taxes for its expansion.

Under the new agreement, the school district will get significantly less money than originally planned — about half. But what it gains, district leaders say, is more certainty that it will actually get paid.

More broadly, the deal brings stability to the Beltline, which has struggled to grow amid financial uncertainty.

Instead of a series of payments totaling about $162 million through 2030, the new deal calls for Atlanta to pay $73.5 million over the same time period, according to APS board chairman Courtney English. In addition, Atlanta would pay all past debts, a figure APS officials placed at about $14.8 million.

Atlanta already made an initial $9.1 million payment toward that debt in December and is expected to pay another $5.8 million in February. The city would also make an additional $10 million payment next year, according to APS.

The city will give the school district the Bankhead Courts property, a now-vacant piece of land owned by the Atlanta Housing Authority. The agreement also calls for the school district to allow the city to refinance debt connected with another project — the Eastside Tax Allocation District — and for the school district to be paid $593,000 in money owed from that district.

Finally, APS will now be paid through a trustee, instead of from the city. That means that the school district will automatically be second in line to get paid — right after bond holders, English said. The agreement shortens the time limit before the school district can take legal action if the city doesn’t pay.

English said the deal is more in line with Atlanta’s post-recession economy.

“I think we got a good deal for APS, one that allows us to help our kids right here right now,” he said.

The dispute had led to clashes between Reed and APS officials, including former superintendent Erroll Davis, current superintendent Meria Carstarphen and English. City and APS attorneys also traded threats during the conflict, which also saw Reed and Council President Ceasar Mitchell at odds.

The school board is scheduled to vote on the agreement tonight. The deal is expected to head to the Atlanta City Council for approval on Monday.

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