Atlanta’s BeltLine to benefit from sales tax, TAD financing

By David Pendered

When Atlanta reaches for money to help build the BeltLine transit system along North Avenue, the city intends to turn to one of its boldest methods for jumpstarting development.

Atlanta plans to use revenues from its tax allocation districts to help pay for the transit system. Atlanta is one of the few local governments in Georgia that embrace this financing method, which is used widely across the country.

The TAD money could help cover BeltLine costs that exceed the $602 million Atlanta is earmarked to receive from the proposed 10-county transportation sales tax, if voters approve the tax next year. Atlanta Mayor Kasim Reed said local funds, and perhaps other alternative sources of money, will bridge a funding gap.

Atlanta has used TADs to bolster development since the precursor of the Westside TAD was created in 1992. Since then, the city has put a TAD umbrella over the maximum amount of its tax digest that is allowed by state law – 10 percent of the digest.

In doing so, the city has allowed for public amenities, such as trails, transit and parks, to be paid for with a special category of property taxes. That category is the portion of property taxes collected on new developments in a TAD.

These portions, called tax increments, can be used to pay for the improvements that attracted the developments to a community that otherwise would not have attracted development. Typically, the city sells bonds to raise money for the public amenities and pays off the loan with the tax increments collected over time.

TADs have always been planned to be especially useful to pay for amenities along Atlanta’s BeltLine. Atlanta created the BeltLine TAD in 2005, and Fulton County and Atlanta Public Schools agreed to support the TAD.

The city’s concept now is to build two legs of transit along two segments of the original railroad track corridor that comprises the BeltLine – the eastern and western portions of the BeltLine. These routes would be connected near their midpoints by an East-West transit line that would run along North Avenue, connecting City Hall East with the northeast tip of Maddox Park.

A BeltLine spokesman said the city is reviewing a number of options to cover about $50 million to $55 million in BeltLine costs that would not be covered by the regional sales tax.

“The approach is to look at local funding sources to build transit,” said Ethan Davidson, a BeltLine spokesman. “More than likely, there will be more than one source of funding to help complete the transit. It could include TADs, including the BeltLine TAD and two TADs on this line – Eastside and Westside.”

The Eastside TAD could help cover costs of the North Avenue line for about five blocks, according to a map of the district.

The Westside TAD could carry a larger part of the financial load of providing transit along North Avenue.

The Westside TAD covers all of that portion of North Avenue, with the exception of one block, that stretches from the Downtown Connector to Ashby Street.

This TAD also is characterized as a success by the city’s independent auditors.

“The Westside Tax Allocation District continues to be a tremendous success,” reads the audit, by Atlanta-based Mauldin & Jenkins CPA, LLC. The document is dated Jan. 21 and covers the fiscal year that ended June 30, 2010.

The statement continues: “Not only have tax increments covered the debt service, the issuance of the bonds has jump-started significant new Downtown development.”

Projects funded by $161 million worth of bonds backed by the Westside TAD include:

  • 123 Luckie;
  • Northyards;
  • Historic Westside Village;
  • Center for Civil and Human Rights;
  • Neighborhood Union Health Center.

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

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