Doctors fear the ripples of COVID-19 include heart palpitations or brain fog for individuals who have contracted the virus. But those who run the cities in Fulton County are worried about borrowing money and putting government operations at risk because of work delayed or complicated by the virus.
Fulton’s cities fought hard for federal COVID-19 relief funds, but $25 million total split among 13 municipalities isn’t enough to avoid hiring freezes and project disruptions.
Take the city of Hapeville.
City leaders had planned to transform an unused city-owned property into an arts center with gallery space and spots where people can watch artists create. City manager Tim Young said the goal was to open the center in 2022. The city had planned to spend between $600,000 and $800,000 of unallocated money on the project.
Then COVID hit.
The 129-year-old Southside city has 10 hotels within its 2.5 square miles because it happens to border the world’s busiest airport in Atlanta. Hapeville’s budget depends on its hotel/motel revenue.
In March 2019, Young said the city brought in about $340,000 of hotel/motel money. This March? $38,000.
So with less money in the coffers and the future uncertain, the city is using bonds to finance the arts center — that means paying fees, interest and a bond attorney, all of which Young said will cost the city tens of thousands of unexpected dollars and likely delay the opening by a couple of years.
“We will wind up paying more and over a longer time for it,” Young said. “And it pushes back other work and limits some opportunity that we would have.”
Bigger cities have also been hit.
Roswell has frozen hiring, told all departments to limit capital purchases and delayed plans for everything from cemetery improvements to revamping roads. City officials, which experienced steep drops in sales tax collections, are only now funding must-have items such as elevator maintenance and new tourniquets for police.
Some cities have been able to make some positives out of a tough situation.
Sandy Springs in August saved $17 million over the next quarter-century by refinancing the bonds it used to create its $229 million downtown arts-and-government complex, said city manager Andrea Surratt. The city also saved $6 million by buying the property it will use to build its public safety facility in a desperate buyer’s marketing.
Surratt said a financial advisor made them aware of the refinancing opportunity, and they waited until the right time.
“We’re not day-trading, so we had to hope we were making a good decision,” she said.
The city was also able to borrow $58 million for the new public safety center and other emergency buildings at what Surrat said was “such a low number it doesn’t sound like an interest rate” — 1.71%.
Sandy Springs has also had to pause projects, like renovating ball fields or repaving roads, but they had just updated their worst-case plans and executed on them.
“We’ve had some big ripples, we delayed projects so we kept our cash, and then we were able to spend that cash on buying the building at the right time,” Surrat said.
Sandy Springs has a median household income of roughly $74,000 — in the much smaller city of Hapeville that number is about $47,000. Fulton County’s median is about $65,000.
But the one thing Sandy Springs can’t escape is a new performing arts venue that has sat empty for months.
Surratt, who started in December, said she has only been to one event at the city’s jewel.
Early on in the pandemic, the city furloughed 48 part-time employees, some of whom worked at the performing arts center. Other employees have been re-purposed to other departments.
She said the performing arts center has a chance to be self-sufficient in the future. “This is not the year they’re going to do that,” Surratt said. She didn’t have an estimate for how much they’ve lost in revenues.
And like Sandy Springs, the city of College Park is learning that creating a name in the events business is hard when you can’t host events.
College Park opened the $46 million Gateway Arena in early November 2019. Along with concerts, the venue was supposed to host the Atlanta Hawks’ G-League development team the Skyhawks, and the WNBA’s Dream.
But nearly a year after the ribbon cutting, the 100,000-square-foot facility has been mostly quiet since March — when the NBA and WNBA suspended play only to resume inside bubbles located in Florida. He said those basketball contracts have helped insulate the city, but they’re still missing out on money.
Between the Gateway venue and the Georgia International Convention Center, city manager Terrence Moore estimates that College Park has lost hundreds of thousands of dollars in revenue. The long-term effects are unknown.
“As long as they have the capability of reimaging their opportunity to host athletic competition, that will enable the city of College Park to rebuild and expand hospitality offerings at that facility,” he said of the Gateway Arena.
Moore said the city’s long-term projects like the $1.5 billion mixed-use behemoth named Six West, which is expected to need $60 million of public money to start, will be alright because that is decades down the road.
What Moore and other metro municipal leaders worry about is a possible reduction in the quality and quantity of services — and the ensuing “why are we paying taxes?” spiral — that could come if life doesn’t return to normal soon.
“It’s a constant moving target, and part of that moving target … is constantly working with departments to minimize expenses,” he said.
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