To pay for parks, trails, transit and development, the Beltline uses a portion of property tax revenue that would have gone to Fulton County and APS. In exchange, city officials agreed to make fixed payments from the Beltline’s tax allocation district, or TAD, to the school system and Fulton County that rise over time, peaking at $16 million a year and totaling $162 million.
The long-term goal is that after the Beltline’s 22-mile loop is complete by 2030, those payments will stop and APS will reap the rewards of better communities and higher property tax revenue.
But the Beltline's revenue projections were decimated by the recession, and now it's unable to meet the terms of its deal. It's currently behind on a $6.75 million payment that was originally scheduled to be paid earlier this year.
Beltline supporters have said making the payments would effectively gut the project.
Officials from Reed’s office, Invest Atlanta — the city’s economic development arm — and APS leaders have been in talks for more than a year over how to resolve the problem. But those discussions stalled in recent weeks as rhetoric between Reed and Davis has heated up.
Earlier this month, Davis told The Atlanta Journal-Constitution that he is considering "all options are on the table" for resolving the debt, including a lawsuit.
Reed later fired back at an Atlanta Beltline Inc. board meeting this month. ABI is the nonprofit overseeing the build-out of the project, while Invest Atlanta oversees the city’s 10 tax allocation districts, including the Beltline TAD.
"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," Reed said about Davis, according to a Channel 2 Action News report.
“(It’s) totally inappropriate to have an executive have that kind of conversation in the newspaper with the amount of support that the city has given Erroll Davis,” Reed continued.
Mitchell, who has not had a seat at the negotiating table with the city and school district, said it’s time to reach a compromise.
“Of course the mayor and the superintendent are very capable and competent leaders, but this is not the time to have a conversation about a lawsuit,” he said.
Reed’s office declined comment for this story.
Atlanta Public Schools Board Chairman Courtney English said the school board wants to have a good relationship with the city.
“We are looking for a resolution to this. Insofar as if it’s the council or the mayor’s office, we want to work with our partners at the city … to find a resolution,” English said. “We want to be good partners with the city of Atlanta. We want to be good partners with the Beltline.”
Mitchell, who many expect to run for mayor in 2017, said he hopes APS will consider redrawing the terms of the 25-year deal. In addition to those fixed payments, city officials under former Mayor Shirley Franklin’s administration also agreed to make other payments to APS and to give the school district land to be used for recreation.
Earlier this year, school and city officials began talks over settling the debt in other ways, such as by the city paying for broadband Internet in schools or cutting school water bills or police costs.
APS also proposed the city give it the Boisfeuillet Jones Atlanta Civic Center, which Reed officials said was a non-starter. Reed has since announced plans to market and sell the property to the private sector.
Mitchell said both the Beltline and APS are vital to the city’s future. He hopes the council can somehow play a role in negotiating a new agreement. Mitchell said the council will be briefed on the issue by Atlanta Chief Financial Officer Jim Beard next week.
“We have to figure out a way to get these two issues aligned and I think it will take everyone putting their heads together and cooling down a bit and having significant dialogue,” Mitchell said.
The stakes are high, he said.
“If the Beltline as a project fails …the tremendous investment this city, the citizens have made psychologically in this project will be for naught. We can’t let that happen,” he said. “If we get this issue wrong and hurt the school system, the work we have done will be for naught.”