DEL.ICIO.USCobb still leery of TADs
COBB COUNTY
Saturday, November 08, 2008
Handicapping the outcome of a vote on something as hard to decipher as a constitutional amendment on redevelopment and taxes is risky business. After waiting in line for hours and at the end of a long ballot, voters’ eyes can glaze over and they can just as easily tap “yes” as “no” just to complete their civic duty.
But promoters of Amendment No. 2 on Tuesday’s ballot — the one that allows school districts to forgo school property taxes to finance bonds for redevelopment projects — were correct to target Fulton and DeKalb counties as their base.
The measure passed statewide by a relatively narrow 51.5 percent to 48.5 percent, a difference of fewer than 110,000 votes out of 3.6 million cast. One of the counties that bucked the statewide trend was Cobb County, which in recent years became ground zero for opposition to tax allocation districts, the mechanism that allows local property taxes to help pay off debt for redevelopment projects in designated zones. Cobb voters rejected the measure by a margin of 53 percent to 47 percent.
But opposition in Cobb and elsewhere was eclipsed by voter support in Fulton and DeKalb counties, which together built a 127,000-vote majority for the concept — more than enough, it turns out, to get the measure approved statewide.
Fulton voters may be more supportive because of what has happened at Atlantic Station, the mega-project on the west side of the Downtown Connector that combines new retail, commercial and residential development on the site of what was once an abandoned foundry.
Atlantic Station has become a second downtown for Atlanta, pumping new life into the area surrounding it. Ten years ago it was a brownfield that couldn’t be given away. Because developers of Atlantic Station could use TAD financing to pay for clearing the site as well as building on top of it, the area was transformed. Having seen its benefits, Fulton voters may have been more supportive of the idea. Ultimately, the increased tax revenue generated by Atlantic Station and the growth around it will funnel millions more into city, county and school treasuries than they would have received had the foundry continued to rust away on the site.
So what happens now that Amendment 2 has passed? During the campaign, a lot of misconceptions emerged that need to be clarified.
Passage doesn’t assure formation of new tax allocation districts nor does it mean that greedy developers and bond lawyers will hoodwink local officials into supporting them, as opponents often implied. School boards retain the authority to say no to developers and redevelopment officials.
In fact, school boards hold significant leverage in such discussions, given that school taxes often represent 60 percent to 70 percent of all property taxes collected in a county. Without a school district’s approval, the financing mechanism for many TADs simply won’t work. Moreover, school districts can bargain for concessions from developers that might make the investment less risky to their tax base.
Cobb County government, for instance, wants TAD-backed bonds to be paid off in 15 years or less, so that developments start generating new school tax revenue within the equivalent of a generation of schoolchildren. It’s a wise move, particularly if the development has the potential to increase the number of students or cause attendance zones to shift.
Still, you can’t blame Cobb voters for being leery of the concept. At one point a few years ago — especially in Marietta and Smyrna — every developer and his brother seemed to be asking for TAD financing to start a project. Marietta even authorized TAD financing on projects after developers had already broken ground with private financing.
Some members of the county’s legislative delegation are already talking about enacting stricter rules for creating a tax allocation district when the 2009 General Assembly convenes in January. The Legislature may want to define what would be considered a “blighted” area eligible for redevelopment compared to what is considered blighted for condemnation purposes, they say. That’s a worthy discussion that could lead to better decisions, especially in this depressed economy where private financing for redevelopment has all but dried up.
Tax allocation districts using school revenue have been employed successfully in other parts of the country, and as Atlantic Station shows, they have potential here as well. Amendment 2 keeps that tool in the redevelopment tool box, giving elected officials the responsibility to decide which projects are worthy of the investment that taxpayers are being asked to make.
• Mike King, a Cobb County resident, is a member of the editorial board.
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