Superintendent Steve Green said DeKalb County Schools would not contribute financially to what could be one of Atlanta’s most significant mixed-use developments since Atlantic Station, saying he would not gamble with millions in tax dollars meant to educate children.
Doraville and DeKalb County officials, along with the developers, have said cooperation among the city, county and the school district was vital in securing $247 million in infrastructure bonds to redevelop the old General Motors factory site. The bonds would be paid off over several decades by increased property tax collections from the site as it develops. The schools would have to agree to give up those increases, while continuing the collect about $1 million a year from the 165-acre property.
If the project were to continue without school board backing, developers would be forced to downsize — or abandon — their plans.
Green appeared sure his decision was backed by the majority of the DeKalb County Board of Education, though member Stan Jester said he would like the board to consider it and feels positively about the proposed tax allocation district, as the tax-collection agreement is called. There is no item on Monday’s school board agenda to discuss the matter. Green and the board chairman control the agenda.
Green said Thursday, “This is speculative in the sense that it’s a high-stakes gamble. I don’t have a degree of comfort in taking our children’s education and compromising our efforts in the immediate. There are too many uncertains and unknowns and assumptions right now.”
Green cited several factors in his decision, including the fact that repayment is not guaranteed, and that while the school district would put up half the money for the TAD, it would have just two of nine seats on an overseeing board. He expected the project could cost the public as much as $600 million after bond repayments.
The City of Doraville, which contains the site, had agreed to the TAD. DeKalb County commissioners have also agreed to the TAD, with the caveat that they would participate if the school district agreed to join.
“It means everything, really,” said Luke Howe, Doraville’s economic development director. “Without (the TAD), it’s just another Atlanta land-use failure. The project is not going to happen as it is planned without the school board’s support.”
School board member Marshall Orson said, “There’s always a possibility the people driving the TAD will come back with new information or parameters that certainly could lead to us taking a different look at it. But that’s incumbent upon those taking the lead to make a case on whether we participate at all.”
Green, who took over last July as DeKalb’s superintendent, dealt with a similar situation in Kansas City when he was superintendent there. At the time, there was pressure for Kansas City Public Schools to participate in what is called there a “Tax Increment Financing” district. Instead of seeing repayment, Green said the repayment was delayed often, and for 10 years at a time.
“We were trying to recoup and recover somewhere in the realm of $26 million in deferred tax with the understanding that it would be a way to entice businesses to take up residence,” Green said. “We would be reimbursed once it ran its (10-year) cycle. At the end of the day, they would be amended” to add another 10-year cycle.
The Doraville site, near I-285, I-85 and a MARTA station, was used as a GM production plant from 1947 until 2008. The land is seen as prime for development, with public aid “critical” for infrastructure work.
Backers of the project, known as Assembly, say jobs created there would compensate for the thousands of jobs lost from the GM plant’s closing, and could entice major corporations to the area.
Howe said the biggest challenge is connecting the MARTA station with the GM site. The station is at Peachtree Ridge. Behind it is an approximately 30-foot drop to the GM site. Howe said a tunnel would be built to extend an existing road to the GM site to make the connection.
“That’s the biggest ticket item we’d have to finance,” he said. “And it’s not really feasible without a fully functioning tax allocation district, which means all three entities are involved. That’s what we need … if we want to see an urban site indicative of Midtown or Perimeter Center. We have to make the infrastructure connections.”
Efforts to reach Eric Pinckney, the executive overseeing development of the Assembly project for Integral Group, were unsuccessful. He said in December the TAD was very critical to developing the site.
“There are other ways to getting it, but this is the most efficient way of providing that public support,” he said.
TADs have been successful funding mechanisms for infrastructure at Atlantic Station and for the Beltline, though the latter has been at the center of a dispute over missed payments from the city of Atlanta to the Atlanta Public Schools.
Integral said if the DeKalb school board doesn’t approve the TAD, it could force the development team to try a smaller project. The Integral team had not formed alternative plans.
“We have to make it a win-win” with the schools, he said. “That happens to be a district that has overcrowding issues and requires some investment.”