City makes $9 million payment to APS to help settle Beltline dispute

The city of Atlanta quietly cut a $9 million check to Atlanta Public Schools last week to help settle a long-running dispute over the Atlanta Beltline. Still, city and school leaders have yet to ink a final deal that resolves the three-year conflict.

A spokeswoman for APS confirmed that the school district received $9.1 million from the city, a down payment of sorts on the millions owed.

At issue is a 2009 agreement in which the city receives a portion of the school district’s property tax revenue to pay for the Beltline’s network of parks and trails. In exchange, it agreed to make $162 million in a series of fixed annual payments from the Beltline tax allocation district, or TAD, to APS.

But, citing the effects of the economic downturn, the city has withheld two payments to APS in recent years worth a combined $13.5 million. It owed another $7.5 million on January 1.

City and school officials say the multi-million dollar payment is evidence of their commitment to reaching a new agreement in the near future. It could also be an effort by the city to avoid being in breach of the contract.

The conflict has held up Beltline development, caused deep rifts between the city and school officials and hindered progress in other areas, including the sale of former school properties.

“We are continuing to negotiate and iron out details on a new Beltline agreement,” APS board chairman Courtney English said on Monday. “… I would say we’re on the one yard line. But, you know, there’s a long way between the one yard line and the end zone.”

English declined to give specifics about the remaining issues under negotiation, but noted that any deal would need to be approved by the Atlanta Board of Education and city council.

Atlanta City Attorney Cathy Hampton said representatives from the city, Invest Atlanta, Atlanta Beltline Inc. and APS hope to reach a settlement “very soon.”

“Ending the dispute will benefit APS students and all of Atlanta’s citizens. The $9 million payment demonstrates our commitment to finalizing a resolution as quickly as possible,” Hampton said in a statement.

It’s unclear how the city is funding the $9 million payment. The Atlanta City Council previously authorized $4 million to help settle the dispute; it is unclear whether that money was included in the $9 million payment. Mayor Kasim Reed’s office did not immediately respond on Monday to questions about the source of the money.

City leaders have said they’ve withheld previous payments because it would effectively halt the Beltline’s development. About a third of the Beltline’s annual budget comes from the TAD.

The city was nearly a year late in paying the $1.95 million it owed in 2013, before skipping the next two payments worth $6.75 million each.

If the city had failed to make the latest payment — the $7.5 million owed on January 1 — it risked being in material breach of the $15 million debt thresh-hold outlined in the contract. Reed has noted, however, the same contract gives Atlanta four years to settle that debt.

The conflict has led to very public spats between Reed and a host of other officials, including English, APS Superintendent Meria Carstarphen, former APS Superintendent Erroll Davis and even Atlanta City Council President Ceasar Mitchell.

In 2014, Reed criticized Davis after the former school leader suggested the possibility of legal action, saying “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.”

And early last year, Reed said Carstarphen “doesn’t know what she’s talking about” in her request for the city to release deeds to school property. Reed said at the time that the city didn’t need to turn over the deeds, which had become part of the Beltline negotiations.

The dispute has also harmed the Beltline’s ability to continue to develop its 22-mile loop of parks, trails and transit.

Paul Morris, the Beltline’s CEO, told his board members last May that the conflict has “made it virtually, physically and legally impossible for us to get loans, to sell bonds, to interact with investors and go to our banks with opportunities.”

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