APS: city of Atlanta late in making $10 million payment on TAD agreement

By Maria Saporta and Maggie Lee

The city of Atlanta is more than three months late in making a $10 million payment to the Atlanta Public Schools as part of the comprehensive agreement both governments reached Jan. 7 on the city’s tax allocation districts.

The agreement was considered pivotal in the financing plan for CIM’s redevelopment of the railroad gulch in the heart of downtown.

Meria Carstarphen John Ahmann

Superintendent Meria Carstarphen signs a partnership agreement with John Ahmann of the Westside Future Fund in 2017 (Special: Westside Future Fund)

On Jan. 7, both the APS board and the Atlanta City Council approved the agreement, which included an initial $10 million payment from the city related to the Westside TAD. That was to be paid within 10 days.

“The city has not paid on the first component of the settlement agreement, which is 10 million,” APS spokesman Ian Smith wrote in an email. “The city is three months overdue.”

The city of Atlanta also was supposed to establish a trustee for another $13 million payment, but APS is not aware the city has fulfilled that part of the agreement.

“The city also has not created the trustee to collect for APS the standing payment directive for the second round of payments which is estimated to be about $13 million out of the Eastside TAD,” Smith continued in the email. “APS is continuing to encourage the City to fulfill its obligations under the settlement agreement through our attorneys.”

A city of Atlanta spokesperson said via email that, “The funds have been segregated and currently in process to be placed in an escrow account pending resolution of litigation.”

The city is referring to litigation filed by John White in January as the reason why it has not lived up to its agreement to make payments to APS.

White initially alleged that APS had violated the Open Meetings Act, and that the city of Atlanta had violated the Open Meetings Act and city ordinances related to meetings where both APS and the city adopted resolutions regarding the intergovernmental agreement.

Smith said APS filed a motion with the court demonstrating that it had fully complied with the Open Meetings Act.

Tony Ressler and Keisha Lance Bottoms

Atlanta Hawks owner Tony Ressler with Atlanta Mayor Keisha Lance Bottoms at ribbon-cutting of new community court in early 2019. Tony Ressler’s brother – Richard Ressler – is the lead for the CIM Gulch development (Photo by Maria Saporta)

White  then filed an amended complaint on Feb. 15 that raised no questions about the process APS followed. It dropped all claims against APS.

But the amended complaint continued to raise questions about the city’s process. Then on March 15, the city filed a motion to dismiss the amended complaint, alleging that they complied with all applicable requirements.

White filed a response on April 17, along with a second amended complaint. The second amended complaint again raises no challenge to APS’ process and instead focuses on the City’s process, Smith said.

But APS said the litigation does not materially impact the agreement that had been reached between the two governments. Until it receives a payment from the city, APS considers the city as having failed to live up to the January agreement on the city’s TADs.

White’s litigation is separate from court challenges to three Gulch-related bond transactions. Those challenges, brought by several Atlanta residents who were leaders in a campaign called “Redlight the Gulch,” are still ongoing.

Before the agreement was reached, APS and the city were facing a stalemate over the city’s plan to use school taxes for the Gulch project. The CIM development anticipated up to $1.25 billion in future sales taxes as part of the public financing for the project.

APS would not agree on the Gulch financing until it had reached a more-encompassing agreement with the city of Atlanta on the use of school taxes in many of the city’s TADs.

Update: this story has been updated to include on-the-record comment from a city spokesperson.

 

Maria Saporta, Editor, is a longtime Atlanta business, civic and urban affairs journalist with a deep knowledge of our city, our region and state.  Since 2008, she has written a weekly column and news stories for the Atlanta Business Chronicle. Prior to that, she spent 27 years with The Atlanta Journal-Constitution, becoming its business columnist in 1991. Maria received her Master’s degree in urban studies from Georgia State and her Bachelor’s degree in journalism from Boston University. Maria was born in Atlanta to European parents and has two young adult children.

1 reply
  1. Avatar
    JWK 1957 says:

    How is that year after year and term after term it is so difficult to steer the ship that is known as the HMS City of Atlanta? Is it impossible to elect a Mayor that will end the “reindeer games” that go on in City Hall? Just once it would be nice to find someone who is not an empty suit or looking to feather their own nest?Report

    Reply

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