Atlanta Public Schools Superintendent Meria Carstarphen delivers her State of the District address in a non-traditional way while dancing and performing with students at the newly built Walden Sports Complex on Friday, October 5, 2018. After the presentation, she spoke to reporters about a variety of topics. HYOSUB SHIN / HSHIN@AJC.COM
Photo: HYOSUB SHIN / AJC
Photo: HYOSUB SHIN / AJC

APS to city: Close or renegotiate other tax districts before Gulch deal

Atlanta’s school superintendent wants to renegotiate or eliminate her system’s participation in five special taxing districts before agreeing to establish a sixth that would use school dollars for the development of downtown’s Gulch.

Superintendent Meria Carstarphen said Friday that Atlanta Public Schools asked Mayor Keisha Lance Bottoms to either eliminate or change the terms of older development incentive programs, known as tax allocation districts or TADs, that receive school tax dollars. 

The largest portion of a property owner’s tax bill goes to the school system. As such, APS would have a major say in any future Gulch deal that uses property tax dollars for development. 

“We are in the middle of those negotiations, so we’re not talking about anything,” Carstarphen said. “It could be anywhere in the city. We’re not talking about a future TAD until we get the new contracts redone for the old five that APS is already involved in.” 

Carstarphen’s remarks came during a news conference that followed her annual State of the District address. 

A few hours earlier, a Bottoms ally criticized the superintendent on a political talk show. Democratic strategist Tharon Johnson accused Carstarphen of speaking negatively about the Gulch deal and said Carstarphen should “keep your mouth shut.”  

It’s unclear if the requests by the school district could complicate negotiations between the city and CIM Group, the development company seeking public financing for the Gulch project. Bottoms previously delayed a vote on a deal before City Council for lack of support, though she is working to win the eight council votes needed to approve the financial package of incentives for the developer. 

When asked to comment on Carstarphen’s move, Bottoms’ press secretary Michael Smith said in a written statement, “The city does not engage in negotiation through the media — therefore, it would not be appropriate to respond to the superintendent’s comments.” 

Before Carstarphen was hired as superintendent in 2014, APS entered into agreements in the five TADs she wants to renegotiate. 

TADs are areas where property tax collections are frozen for a period of time, and future increases in tax collections from rising property value as the area redevelops are used to help pay for the development. In theory, after the bonds are repaid the participating government bodies such as school systems reap the financial benefit of new, higher property values. 

Bottoms wants to use a TAD as one of two sources of public funding to contribute to the proposed development at the Gulch. The $5 billion project by CIM Group and partners would transform the area into a multi-use mini-city. 

The public financing package could rise to $1.75 billion, according to the city. 

Julian Bene is a former board member of Invest Atlanta, the city’s economic development arm, and a fierce critic of the deal. He said if the project meets its $5 billion development value, that could equate to $45 million in annual revenue that schools would forgo to the TAD. 

Bene said he doesn’t see how APS could recapture that amount of money from the closure or amendment to other city TADs. 

Carstarphen said the more APS invests in development projects “the less we can do for our families” and taxpayers, such as reducing the school system’s millage rate. 

“It’s not like it means we’re for or against anything or any TAD,” she said. “We just want things made right for APS that have been done wrong.” 

The other source of public funds for the development would be 5 cents of the 8.9 cents of sales taxes collected in the future on the Gulch site. Four of those five pennies are state dollars.  

Supporters of the Gulch deal say none of the tax revenue discussed would exist without the development, and the development is only possible with the public funds. 

On WABE’s Political Breakfast show, Johnson said the state has offered to make a significant investment and implied the schools were not bringing anything to the table.  

“I have learned in business … if you don’t have anything to bring to the table, if you don’t have any skin in the game, then keep your mouth shut,” Johnson said. “…For those out here talking about how much money APS stands to lose or stands to gain going down the future, OK, you may feel that way, but don’t interfere with this deal and go out and trash publicly or privately a mayor who has worked with you.” 

The public-funding proposal has yet to be voted on by the city council. The tax district would also include APS and Fulton County, and require approval by all three bodies as currently proposed.  

Carstarphen said before the school district considers participating in another TAD, it wants to close loopholes in the five others it already participates in. They are the Westside, Atlantic Station, Perry Bolton, Eastside and Beltline tax districts. 

In June, The Atlanta Journal-Constitution obtained text messages between Bottoms and Carstarphen that showed the leaders were negotiating terms to get APS to take part in the Gulch deal. APS’ terms included closing the Eastside TAD.  

Friday, Carstarphen said, “What we want are better terms with our spouse, and if they’re going to do that right, that means that they’ve got to honor what they said they are going to do and then make right what they didn’t all those other years.”

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