By David Pendered
To get a sense of the complexity of providing assistance to neighborhoods near the future Falcons stadium, consider the case of just one house built under a benefits program created when the Georgia Dome was built.
The house at 221 Maple St. was built with a $79,000 construction loan from the $8 million Vine City Trust Fund. Vine City Housing Ministry, Inc. sold the house in 2002 for $118,000. Today the house is valued by Fulton County at $28,900 and the trust fund is owed just over $59,000 of the $76,100 in mortgage financing it provided the buyer, according to records of Invest Atlanta and Fulton County’s tax assessor.
Multiply this type of dynamic across multiple issues – job creation, environmental mitigation, public health and safety, historic preservation, and green space – and the task of finalizing a community benefits deal in the next four weeks of September takes on a whole new perspective.
The time seems ripe to pull back and review some of the components of the community benefits deal being discussed.
The legislation passed by the Atlanta City Council in March, to provide $200 million in construction financing for a new retractable roof stadium, requires that the bonds be sold only after the council approves a community benefits deal. The city has had similar programs in place at least as far back as the 1996 Summer Olympic Games. Atlanta included such provisions when the council approved the use of property taxes to incentivize construction along the Atlanta BeltLine.
The stadium bonds are to be repaid by Dec. 31, 2050. The bond market has been volatile this year, with investors demanding higher returns as maturity dates extend to 15, 20, and 30 years, according to an Aug. 8 report by Morgan Stanley Wealth Management. The longer terms required yields of almost a half a percent higher than 10 year bonds, according to the report.
Five public meetings on the stadium’s community benefits deal have been conducted, and two more are scheduled before the deal is finalized. The next meeting, on Wednesday, is scheduled to last 90 minutes and the other is planned for Sept. 18. All previous meetings have been scheduled for 90 minutes.
Invest Atlanta has produced a calendar that calls for the community benefits deal to be finalized on Oct. 2. The timeline Invest Atlanta unveiled July 2 envisioned the deal being put before the city council in late October. Proceeds of the bond were to be available in early 2014, suggesting the plan was to sell some or all of the bonds in late 2013.
The community benefits deal has two stated goals and one that is understood:
- Shape the list of projects to be funded with $15 million in city property taxes collected through the Westside Tax Allocation District. The board of Invest Atlanta has the final say over the selection and timing of projects to be funded;
- “Inform” the list of projects to be funded by $15 million allocated by the Neighborhood Prosperity Fund (the Blank Foundation). The board of the Blank Foundation has final say over the timing and selection of projects.
The unstated objective that’s outlined in the Invest Atlanta presentation is to provide information about challenges and opportunities related to the new retractable roof stadium. This information is intended for four departments – planning and community development, police, public works, and watershed management – and Invest Atlanta, which is the city’s development arm.
The committee that’s guiding recommendations for $30 million in investments related to the stadium has 16 members. Eight of the members are from the executive, legislative or administrative branches of Atlanta City Hall or Invest Atlanta:
- Mayor Kasim Reed’s representative;
- Invest Atlanta’s representative. The mayor chairs the board of Invest Atlanta;
- City council President Ceasar Mitchell;
- Four city council members;
- The city planning department’s representative;
- Two representatives of NPUs (neighborhood planning units L and M);
- Representative of Vine City Civic Association;
- Representative of the advisory board of the Westside Tax Allocation District;
- Representative of each of the four stadium neighborhoods (downtown, Marietta artery, English Avenue, Castleberry Hill).
The process of crafting a deal has been hobbled by uncertainty over where the stadium will be built. Until the site has been determined, any decisions seemed premature regarding the type and extent of relief to be provided the four neighborhoods, Mitchell said when he presided over the Aug. 7 meeting. The initial deadline for site selection was Aug. 1, but the deadline has become flexible as negotiations have continued with two churches in the way of the south site.
Councilperson Michael Julian Bond has emerged as the committee chair. Bond is unopposed in his reelection bid this autumn. Reed contributed $2,500 to Bond’s reelection campaign fund, according to the mayor’s campaign disclosure report received July 6 by the state.
The $8 million Georgia Dome Trust Fund that helped build and finance the house on Maple Street has been a hot topic among some community advocates who have attended the committee meetings. Following requests for an accounting of the money, Invest Atlanta released a report that shows the fund that was created in 1989 and funded with proceeds of a bond sale has produced the following direct results:
- Funded $8 million in projects;
- Constructed 21 houses;
- Provided 47 single family mortgage loans;
- Financed construction of two apartments developments with a total of 309 units.
Invest Atlanta reported that the total results include:
- $54.4 million leveraged;
- $15.8 million expended;
- 815 units produced;
- 119 loans to homeowners;
- Twenty loans to developers.