By David Pendered
Atlantic Station has exceeded every realistic expectation of an urban renewal project.
In 1999, Atlantic Station was the dusty site of a shuttered steel mill. Today, through a tremendous public-private partnership, it is a city onto itself that’s claimed equally by the Midtown and Georgia Tech communities.
There’s no doubt that Atlantic Station has been a successful financial investment for both its initial investors and the city. That success is cited in a new city audit that recommends the Atlanta City Council enact stricter controls over Atlanta’s largest renewal program, which is administered by Invest Atlanta, the city’s redevelopment arm.
Atlantic Station is one of the 10 redevelopment areas that were examined in an audit from city Auditor Leslie Ward and the city’s Audit Committee. The audit reviewed Invest Atlanta’s management of tax allocation districts, or TADs, in which property taxes on new developments are directed to improve a community’s public amenities, such as roads, sewers and parks, in order to attract more development.
The audit determined that Atlanta has $226 million in surplus property taxes collected in these TADs. The audit looked at two financial documents, one from the city and one from Invest Atlanta, and determined that Invest Atlanta has no specific use attached to the surplus, other than for the general purpose of redevelopment.
The audit recommends the city council adopt a set of controls and reports to “improve the oversight and accountability of use of public funds generated by the tax allocation districts.”
The audit was presented Monday to the city council. It is slated for discussion at the June 12 meeting of the council’s Community Development Committee.
Among all the city’s TADs, Atlantic Station is unique.
The Atlantic Station TAD was formed in 1999 to help finance a project that faced enormous complications:
It was on a tainted site;
- It had no direct access from the interstate or from Midtown;
- Building roadways to the site was all but impossible because Atlanta’s air was so polluted that highway construction was banned.
The federal Environmental Protection Agency stepped in, declaring that the 17th Street Bridge could be built. EPA determined that Atlantic Station would reduce the pollution load by reducing the number of vehicle trips in the Atlanta area, according to an EPA press statement dated Sept. 9, 1999.
The city created a TAD for Atlantic Station, which provided an affordable financing tool to help pay for the bridge, remediation of the brownfield, and installation of roads, sewerage and other public amenities.
Until the great recession, Atlantic Station appeared to be moving ahead somewhat as planned. Here’s the tally sheet of progress, according to page 69 of the audit:
17th Street Bridge – completed;
- Planned homes: 2,000 to 3,000 – Homes built: 3,579;
- Planned office space: 4 to 6 million square feet – Office built: 1.4 million square feet;
- Planned hotel rooms: 1,000 to 1,200 – Rooms built: 101;
- Planned retail space: 1 to 2 million square feet – Retail built: 1.3 million square feet.
Because of this development in the Atlantic Station TAD, the audit questions whether Atlantic Station may still qualify for city subsidies for its future development.
That’s because the initial obstacles that government-backed funding helped overcome have been resolved and may no longer present an impediment to market-based development, the audit states.
“It’s not clear that additional public investment in Atlantic Station is necessary to spur development because the barrier to private investment has been eliminated,” the audit states on page 37.
There’s also the issue of Atlantic Station’s financial success.
After servicing its government debts, Atlantic Station’s TAD shows a fund balance of $33.4 million, as of June 30, 2011, according to the audit.
That means the 0.3 acre of land that comprises the Atlantic Station TAD has generated enough development to have a surplus of $33.4 million.
The audit has determined that two financial documents, one from the city and one from Invest Atlanta, provide no specific uses for the surplus, other than for the general concept of redevelopment.
Likewise with the total pot of $226 million in surplus balances that have accrued in TAD funds – the two city financial documents list no specific use, according to the audit.
“The makeup of the fund balance is not identified in the city’s audited financial statements or in Invest Atlanta’s audited financials of the individual tax allocation districts,” the audit states on page 39.
The audit notes that Atlanta has issued $636 million in bonds since 2001 to finance various parts of urban renewal developments in five regions of the city. However, limited controls appear to be in place, according to the audit:
“Most of the bond- funded projects have been completed, and the bond funds have been either spent or committed to ongoing or future projects.
“Invest Atlanta, however, has no criteria for determining when a redevelopment plan is complete and has no policy for handling surplus increment once the redevelopment plan goals have been met.
“Invest Atlanta’s reporting highlights accomplishments within the districts but does not assess progress toward meeting redevelopment plan goals.”