Ken Bleakly of the Bleakly advisory gave a presentation at Thursday night's town hall meeting to explain the purpose for the November 6 ballot referendum regarding the establishment of a 'tax allocation district,' or TAD.
Bleakly explained that the TAD is an alternative financing tool for cities to encourage development and, particularly, redevelopment of older properties. Georgia is the only state to use the TAD term; the other 49 refer to the same concept as 'tax increment financing,' or TIF, and Bleakly said the tool has been used in many areas, including Atlanta and other Georgia cities, to great effect.
"Typically you focus on areas that need new development or development; the purpose is to stimulate areas that haven't gotten the redevelopment attention they need."
The TAD works like this: the city designates its 'tax allocation district,' or districts, where it deems them most needed, but can designate only up to a maximum of 10% of the total tax digest or property value for the city. The property values of in those districts are then established as a baseline. Going forward, any increase in property values over that baseline value is known as the "increment," and is put directly toward redevelopment or toward financing via a taxable or tax exempt bond.
This means the relevant entities (city, county, and Board of Education) continue to receive the originally established property tax amount, but anything above and beyond is used for redevelopment.
Once a TAD is established, property owners within a TAD can bring forth projects that meet the city's criteria for redevelopment. The idea is that business owners will get enough of a boost to want to redevelop, but will still carry a majority of the cost. Those private owners would also be responsible for a loan or bond secured to fund the redevelopment, meaning the city is not on the hook for a possible default.
Georgia law also stipulates that the city has to get the agreement of the county as well as the school board to pledge their share of property tax revenues toward the special fund for the TAD.
Bleakly said that over fifty-five counties and cities have approved the use of TADs in Georgia and several more are in the process this year, and more than $500 million in bonds had been issued under the program between 1999 and 2008.
Mayor Greg Clifton voiced his approval for the idea, saying it amounts to a "win-win," and adding that, of the $500 million in bonds issued so far, there have been no defaults in Georgia, meaning the risk is fairly low for the city as well as the property owners.
After the meeting, City Administrator Joe Morton said choosing the particular site or sites for a TAD is the next step, assuming the referendum is passed. He said that a couple locations have been considered, including the area around the old location of Longbranch, as well as the Fayette Place shopping center, where La Hacienda and Wings & Things are located.
The ballot is a separate item from the November 6 general election, meaning Fayetteville residents wishing to vote for or against the TAD would have to go to one of two locations-- the Lafayette Center and the Library-- to cast their vote.