Fresh Loaf

Somewhat lost amid the shuffle of the presidential race and a handful of legislators losing seats were the various referenda (or referendums, for non-English majors) that appeared on local ballots. Here’s a wrap-up:

• Yes to TADS; no to private cities. By a close margin, Georgia voters approved a constitutional amendment to allow school boards to join with local governments in issuing bonds for tax allocation districts. But voters narrowly spiked a crazy proposal to allow private developers to levy taxes on homeowners. Less controversial was an initiative to provide tax incentives to encourage preservation of forest land; it passed handily.

• Fulton County libraries will be getting a facelift. Voters overwhelmingly approved a $275 million bond issue to add eight new branches, spruce up 24 existing branches and spend $85 million toward replacing the downtown central library. Expect a grassroots campaign to emerge against tearing down the old building. (more…)
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Mike Dobbins, a former City of Atlanta planning commissioner who now teaches at Georgia Tech, urges voters say ‘no’ to Amendment 2.  If approved, the amendment would allow school systems to participate in tax allocation districts. CL recently endorsed Amendment 2 — click here to see why.

There has been a lot of misinformation spread about TADs and what the constitutional referendum is about. Its supporters have been using tax-generated funding to lobby, and I would say mislead, the public to try to get us to vote for it. TADs allow local governmental jurisdictions to sell bonds to pay for public infrastructure in designated areas where disinvestment and blight bring down the neighborhood and discourage private investment. The bonds are supposed to be paid back from the tax value increases generated by development supported by the improved infrastructure. Many advocates imply that without a yes vote TADs won’t be available to local governments to induce prospective developers’ investment.

But TADs are still available. It’s just that the school portion of anticipated tax value increases must be dedicated to school purposes. So voting no on the referendum doesn’t jeopardize TAD programs; it only reduces the amount of proceeds available.

(more…)

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Sources tell CL that Atlanta City Councilmembers were given notice that a special-called meeting will be held at City Hall tomorrow at 3 p.m. Details are vague, but the event could mean developments are underway for the 22-mile loop of parks, trails, transit.

Why? Well, as we’ve been reporting, the Oct. 31 deadline for Beltline leaders to settle the debt on property purchased from Gwinnett County developer Wayne Mason is drawing near. The property — a 66-acre parcel of land and transit right-of-way located near Piedmont Park in the project’s northeast quadrant — generated controversy this summer when Beltline leaders decided to allocate nearly half the TAD bond funding to settle the debt. If it’s not repaid, the Mason property could enter foreclosure.

Because of the virtually shutdown bond market, those TAD bonds have been delayed until the project’s financial wizards could secure the best possible deal. Beltline leaders would most likely have to brief City Council on their progress.

Regardless, we’ll be there and update once we hear word.

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It’s one thing for a public agency to argue in support of a cause, says a honest-government watchdog group. It’s another to contribute cash, however.

Common Cause Georgia yesterday filed a complaint with the State Ethics Commission against several public agencies — including the Atlanta Housing Authority, Central Atlanta Progress and the Atlanta Downtown Improvement District — that allege the groups contributed nearly $125,000 to Georgians for Community Redevelopment, a booster group that is campaigning in favor of Amendment 2 on the General Election Ballot.

A successful passage of Amendment 2 would allow school boards to participate in tax allocation districts, a somewhat controversial redevelopment mechanism that uses future increases in property taxes to pay off bonds sold to build infrastructure in blighted areas. TADs have been used throughout the state since 1985 — most notably at Atlantic Station. In February, however, the state Supreme Court ruled that the use of educational funds — in this case, the school’s portion of property taxes — for redevelopment purposes violated the state Constitution.

“Common Cause Georgia fully acknowledges the right of the development community to lobby for the passage of this constitutional amendment,” Bill Bozarth of Common Cause Georgia said in a statement. “That is free speech, and we take no issue with that. However, we do take issue with doing so in violation of the law. We are filing our complaint with the State Ethics Commission because we believe that Georgians for Community Development - a campaign committee organized for the purpose of gaining voter approval of Constitutional Amendment 2, has accepted contributions from several public agencies which are clearly prohibited by Georgia statute from contributing to this kind of political activity.”

The AJC has more on the story here.

After the jump, the full release from Common Cause and links to the recently filed complaints.

(more…)

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OBAMA’S SECRET: The Democratic presidential nominee has picked a running mate. But he’s not gonna tell you who it is.

NO-SHOW REED: After hyping John McCain in anticipation of last night’s Atlanta fund-raiser (and after the GOP candidate allegedly told him ‘no thanks’), baby-faced former Christian Coalition prez Ralph Reed decides not to grace the event with his presence.

COUNCIL HEARTS TADS: Late last night, Atlanta City Council green-lighted controversial Tax Allocation District funding for the $125 million Center for Civil & Human Rights museum and the multi-billion-dollar Beltline transit-and-trails project. More than $200 million was approved — which marks the first infusion of government funds for the Beltline.

NO PRESSURE: The Georgia Bulldogs are the top-ranked college football team this year. It’s the first time the UGA team has started a season with the top ranking. Last year, the Dogs finished No. 2.

DESPERATE DEPOT: Atlanta-based Home Depot Inc. expects profits to tumble 24 percent in this weakened housing market year. Still, the world’s largest home-improvement company reported unexpectedly high profits this quarter.

SICK VITAMINS: A Marietta man claims his daily vitamin caused his hair and fingernails to fall out. Apparently, he’s not the only one.

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Terri Montague looked disappointed.

The CEO of Atlanta Beltline Inc., the nonprofit agency tasked with planning and building the 22-mile project, stood before the Atlanta City Council’s finance committee on Wednesday to present how the group planned to spend an estimated $117 million that was to be generated from the first round of TAD bonds. Councilmember Felicia Moore asked Montague what was the rush — council was about to go on recess and the Beltline has until Oct. 31 to settle an outstanding debt for a key piece of property near Piedmont Park. Moore was planning on tabling the item, she said.

What’s the rush? Well, to put it simply, Beltline leaders are against the slow-moving bureaucracy that is modern-day government. Council returns from its summer sojourn in mid-August and the Beltline has investors coming to scope out the project the following week. Montague said the investors need to have a sense that the city is truly committed to the project. It needs the money.

(more…)

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The chamber approved it with an overwhelming 43-2 vote this morning and now sends the legislation to the House. The legislation is being watched around the state as it would return the substantial bulk of the funding mechanism’s purchasing power — the school tax cash — back into the mix.

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Stand Up DeKalb, a community advocacy group that most recently fought the controversial Sembler project at Briarcliff and North Druid Hills roads, is calling out its members to voice their opinion about the tax allocation district legislation that is quickly weaving its way through the General Assembly. Both the state House and Senate are working on bills that’ll address the issue. Critics of TADs say the financing method robs schools of funding. After the jump, Stand Up DeKalb’s release.

(more…)

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A couple of sources inside the Capitol today said work is underway in both chambers on a constitutional amendment aimed at reworking TAD funding. It’s a bipartisan effort for the most part, but again, that all hinges on what the bill ultimately states. Lt. Gov. Casey Cagle and Sen. Dan Weber of Dunwoody lead the charge in the Senate. Rep. Stacey Abrams of Atlanta is doing the same in the House. The General Assembly is out on Monday — damn you, loafers! — and one source says bond lawyers still need some time to “digest the Supreme Court’s ruling.” Look for the proposal to pop up on Tuesday or Wednesday.

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Just got off the phone with state Sen. Kasim Reed, who himself just walked out of a meeting about yesterday’s state Supreme Court ruling and its impact on the Beltline. He said the Office of Legislative Counsel is poring over Monday’s ruling and is at work “in real time” examining how the General Assembly could return funding to the Beltline and other projects that would stand to be affected in the future. While it’s early in the process and he couldn’t offer more specific details, Reed said citizens should expect to see “something substantive” in the next 72 hours.

The two options would be either a state constitutional amendment or a bill. The former is the strongest of the two because it could not be invalidated by the Supreme Court, Reed said. If the General Assembly passed it, Georgia voters would ultimately decide the issue in November.

Reed said he would discuss the issue tomorrow in Democratic caucus as well.

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The Atlanta Development Authority — the city’s economic development engine — responded yesterday to the Georgia Supreme Court’s ruling that the Beltline could not utilize nearly $860 million generated by the tax allocation district, or TAD. In so many words: The ADA’s disappointed and says yesterday’s ruling will have a big impact on what’s become the financing mechanism du jour in Georgia. Here’s the ADA’s response and updates on where existing TADs stand, as well as some background on TIFs, which are basically TADs by another name. Emphasis has been added to highlight key points.

This decision will reduce the economic impact of all TADs statewide. TADs are a national best practice (known as TIFs, or tax increment financings, in other states) and the City’s most effective incentive in helping to revitalize underdeveloped areas of the City. This ruling in essence cuts in half the incentive benefit and may slow redevelopment in the City’s targeted areas.

The City of Atlanta currently has ten TADs: Westside Downtown, Atlantic Station, Princeton Lakes, Perry-Bolton, Eastside Downtown, BeltLine, Campbellton Road, DL Hollowell Parkway/MLK, Metropolitan Parkway and Stadium Area.

This ruling will not impact projects funded by TADs where validated bonds are outstanding. Since 1997, bonds have been issued in the Atlantic Station, Princeton Lakes, Eastside and Westside TADs, totaling $410 million.

This ruling will affect future bond offerings in all of the City’s TADs. For example, bond offerings planned for 2008 are the BeltLine, the Perry-Bolton TAD and the third bond offering for the Westside TAD. We will revise the feasibility numbers for the Perry-Bolton and Westside projects to assess the funding implications for each of the proposed projects. ADA will communicate its findings to each development team later this week.

We are committed to moving forward with redevelopment projects in all of the City’s TADs. For more information, please see the following web sites:

TIFs as a national best practice

TADs in Georgia
2007 year-end report on the City’s Tax Allocation Districts

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“ALL BIG DREAMS HAVE CHALLENGES”: Mayor Shirley Franklin addresses the press as Beltline CEO Terri Montague looks on.

Mayor Shirley Franklin has good news and bad news.

We know what the bad news is. Anytime you have to start a Monday morning knowing a highly valued and expensive public works project has been stripped of a large chunk of its funding, well, that sucks. As the mayor said, this was unanticipated. But she sees a light at the end of the tunnel.

Speaking before a bank of camera crews, ink-stained scribes and microphones in City Hall, Franklin and various members of Atlanta City Council and proponents of the Beltline said that even in light of this morning’s state Supreme Court ruling, the effort will continue to roll forward.

“We will not be able to use $1.8 billion [of TAD-generated funds], but we can use about $800 million,” Franklin said. “This is a bump along the way. We are overall in a good position, but not a great position.”

Beltline CEO Terri Montague said work will continue on the West End trail, Boulevard Crossing Park, North Avenue Park and Bellwood Quarry.

Montague said it’s too early to predict the impact the ruling will have on specific segments of the Beltline, such as parks, trails or transits, but she added that her team remains focused. A spokesman for the project echoed Montague’s comment and said the team has just started assembling information — to speculate on any changes would be premature, he said.

Montague said the outpouring of support from private companies in the forms of grants and loans has helped and will continue to sustain the operations while alternate sources of funding are examined. Project officials will reach out to city and state leaders for additional funding. Montague said she’s looking forward to an upcoming Sister Cities day in March, which will provide the city a chance not only to showcase the Beltline, but perhaps even jockey for foreign capital investments.

TAD projects where bonds have already been issued — Atlantic Station, for example — would not be impacted by the ruling, said city attorney Beth Chandler. If additional bonds have to be issued, however, that may pose a problem. She said the ruling would affect projects where bonds have not yet been issued, such as the Perry Bolton, Westside and Turner Field TADs. For a city to capitalize in the future on the school-tax segment of a TAD — as Franklin emphasized has been the case in other cities across the country that have used the mechanism — the General Assembly would have to alter the state constitution and the voters would have to approve the change.

“The Beltline is a project that enjoys community support,” Franklin said. “It had it when I was elected in 2001. We believe that support is wide and deep.” She noted that $160 million has been allocated for the project in the form of loans, donations and grants from the city and the private sector. She added that “all big dreams have challenges,” and offered the city’s ongoing sewer repairs and fifth runway at Hartsfield-Jackson International Airport as examples.

“A lot of people said [those projects] wouldn’t happen,” she said. “But [they] did.”

Photo by Joeff Davis

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Tax allocation districts, or TADs, are complicated issues and becoming increasingly popular. As of 2007, four cities in Georgia have utilized TADs — Atlanta, Acworth, East Point and Marietta. Atlantic Station? That was built largely thanks to a TAD. Here’s a good definition of what a TAD is and does, pulled from a recent study by the Livable Communities Coalition, an Atlanta-based policy group:

TADs have soared in popularity in recent years because they promise a relatively painless way to pay for public projects needed to lure or enhance private investment, especially in areas that might otherwise not attract such development. Bonds are typically issued to pay for the projects. The bonds are then repaid with property taxes generated by rising real estate values associated with the new development. As soon as the bonds are paid, the new tax revenues revert to cities, counties and schools.

So how might this morning’s decision by the state Supreme Court affect existing and future TADs? It’s highly unlikely a judge would want to go in and unravel existing TADs. Many have already cleared the bond-validation process. I received an interesting e-mail from a source that passed along a lawyer’s take on this morning’s decision. I’ve granted anonymity to both sources. Please keep in mind this is one lawyer’s opinion.

Existing TAD bonds should be OK, because in those cases the bond validation proceeding was concluded and not appealed. Under Georgia law, the validation hearing conclusively cures any potential defects in the bond issue, so that the purchasers of the bonds have the assurance they will be repaid.

Under the Woodham case, the conclusion of the validation hearing was appealed, so the bond issue may not go forward to the extent it includes the pledge of school tax revenues. There is nothing to prevent the “downsizing” of the bond issue to include only City and County revenues. So - the Woodham case effects the BeltLine bond issue that was the subject of the appealed validation hearing in Fulton Superior Court, as well as all future bond issues.

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Nevermind the fact that he used his political-might to circumvent the state required 30-day waiting period… Another example of him manipulating the system for personal gain.

— Commenter Shrike071 on news that Speaker Glenn Richardson seems to have used personal pull to initiate and complete a divorce in a single day. State law requires a 30-day waiting period for uncontested divorces.

His divorce records are sealed for now, so it’s not yet clear whether Richardson’s divorce has anything to do with allegations last year that he’d been laying pipe* with an attractive lobbyist for the gas industry.

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We’re already at war with Alabama and Florida over water, so why not also Tennessee?

— The McGehee Zone on a nascent effort in the state Senate to “correct” Georgia’