While this may sound like a political message, this is really an update on local developments and the importance of voting tomorrow will have on local developments, in particular Jonquil Village and Belmont Hills.
The City of Smyrna has pursued the use of Tax Allocation Districts (TADs) to help finance the improvements necessary to redevelop Jonquil Village at the corner of Atlanta Road and Spring Road, as well as Belmont Hills at the corner of Windy Hill Road and Atlanta Road.
Tax Allocation Districts (TADs) are an economic development tool for improving blighted areas by stimulating redevelopment and growth of the tax base. Through TADs, local governments issue bonds to fund infrastructure improvements needed to attract private redevelopment within a blighted area.
As property values rise, the incremental increase in property tax revenue generated by the redevelopment is used to repay the bonds (usually 20 to 25 years). Local school districts may elect to participate in the TAD, and typically negotiate for special benefits or payments in lieu of foregone tax revenue.
In 2008, the Georgia Supreme Court ruled that using property taxes allocated for schools to repay TAD bonds was in violation of the Education Purposes Clause of the State Constitution.
On Tuesday, November 4th, you can vote “Yes” for the amendment which will clarify that local school districts may choose to participate in TADs, which puts TAD financing back in the same position as before the Court’s ruling.
Keep in mind that Tax Allocation Districts are somewhat unchartered territory in Georgia, but have been used around the country in various states successfully for decades. The one well-known example in Atlanta is Atlantic Station.
The opponents of TAD financing point to the school’s “losing” property tax revenue from the use of TADs. This simply isn’t a correct assessment of the situation. With TADs, the schools still receive the same property taxes as pre-development. The increased property taxes are used to repay the bonds issued to pay for improvements. When the bonds are paid off, the school district will then reap the full benefit of the increased property values and related taxes.
If the development never occurs, then they’re also “losing” property tax revenue under their argument, which seems to prove how baseless their view is on the use of TADs. It really is a win-win situation. On top of that, the schools will also benefit in the interim through new development through other complimentary developments in the area, new homes, and don’t forget about SPLOST. SPLOST is a 1% tax added to sales tax in the county and allocated to the schools. With the new development, you’ll see an increase in SPLOST revenue in the short-term.
The current financing issues in the market have made the use of TADS even more important. As Ashley Hungerford with the Marietta Daily Journal reported on September 25th, the Jonquil Village developers are still fully committed to proceeding with the original plans for Jonquil Village, but have been forced to scale back on construction work as they try to obtain additional financing for the project.
Undoubtedly, they are eager for your vote on November 4th.
Technorati Tags: Jonquil Village, Belmont Hills, Tax Allocation District, Smyrna Georgia
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