Around two dozen staff, elected officials and community stakeholders from the city of Douglasville, Douglas County, the Douglas County School System and the Development Authority of Douglas County came together Monday to become more education as they ponder the creation of Tax Allocation Districts (TAD) within the city
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of Douglasville and unincorporated Douglas County.
The group met at West Georgia Technical College's Douglasville campus, where they heard a presentation from Steven Lebovitz with Dentons US, LLP who admitted he was "passionate about TAD."
He said TADs were first started in the 1970s, but it was in 1985 when local governments could start using TADs in Georgia. In fact, the first Tax Allocation Districts in Georgia were used to develop Atlantic Station and downtown Atlanta.
To date, 48 jurisdictions in Georgia have utilized the TAD tool. There has been $18 billion in private investment plans for all Georgia TADS.
Georgia's Redevelopment Powers Law was adopted by the general assembly in 1985 and gives cities and counties the authority to sell bonds to finance infrastructure and other redevelopment costs within a specially defined area, a tax allocation district or TAD.
The bonds are secured by increases in the property tax revenue from the redevelopment activities in that specific TAD.
TADs offer a flexible alternative to financing economic development without the need for special purpose taxes or property tax increases.
Lebovitz said that TAD was the "best economic development tool to attract business." It is used to provide tax-exempt financing for infrastructure and other redevelopment costs in blighted, less desirable or underutilized areas, he said.
He said an area tagged to be redeveloped is not the only area to benefit.
"Nearby areas often shoot up in value once an area is redeveloped," Lebovitz said.
"TADS can be used to pay redevelopment costs; capital or soft costs of redevelopment; land assembly; organizational and professional service costs; debt service on TAD bonds and to capitalize interest."
He stressed to the group that "TAD is not a tax increase" and "Governments never lose a cent."
Chris Pumphrey, executive director of the Development Authority of Douglas County said last week, "This is an educational forum to discuss types of TADs. No locations have been set yet, but in working with the Downtown Douglasville Master Plan, it will be a recommended tool."
Before a TAD could be put in place in the city of Douglasville and/or Douglas County, it would have to be put before the voters in the form of a referendum.
The Redevelopment Powers Law requires that local communities hold a referendum to authorize the use of tax allocation districts in their communities.
Approval of a referendum gives local governments the right to form one or more TADs, but it does not form any districts or grant the incentive to a project or projects.
The presenter said there are many advantages to creating a TAD to stimulate redevelopment.
"There is not a property tax abatement," he said. "There is not a property tax increase and it leverages public/private investments. You can issue bonds against future taxes or pay-as-you-go from the TAD fund."
Pumphrey that while working on a strategic plane for the city of Douglasville, they were looking at workforce development, infrastructure and redevelopment.
"The Atlanta region is grown and as a community, we want to stay ahead of that growth," he said. "We need to have a vision and a plan to build that vision."
He said that he, Douglasville City Manager Marcia Hampton and Douglas County Administrator Mark Teal have been talking about the need to go forth with a TAD.
Hampton said: "Prior to the recession, we were allowed to put on a ballot to have a TAD. There are many initiatives that will need a package of financing to get them done. If we don't have a any toolkits, most of the big things won't be able to happen. Developers will expect us to have funding tools in place. If you don't have the financing to do the project you want, it won't get done."