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I disagree totally. The school officials are responsible for the schools and have a fiduciary responsibility for the schools. The city officials are responsible for different things. If the city wants to fund something, they should do it from their budget, not from the school's.
I've got a problem with politicians in that too many understand money is fungible and take taxpayer money intended for one purpose and use it for another.
I've also got a problem with a lot of these TADs. The Beltline is one of the more logical ones, but some have little public benefit, just a private one for the developers. In those cases, its basically just a giveaway to land speculators and developers. Why can't Buckhead just say we want a TAD and keep all the increase in tax money and spend it only in Buckhead?
The TAD was set up by state law to help with the long-term growth for both budgets. The problem with your analysis of the situation is you're forgetting there are real tangible links to physical infrastructure, private investment, and the value of property (which produces tax receipts for both).
This extra money for the TAD wouldn't exist if the TAD didn't exist. So this idea that we are 'taking' money intended for schools isn't exactly correct. You have to learn how and why the structure of the TAD works. More troubling with this is the schools are trying to cash in on a bad contract for money that doesn't exist. If the TAD did not exist the schools would have never gotten this much extra revenue. In part that some private development wouldn't have occured without the TAD and in part that the tax digest fell apart in the recession. There fore... no one is 'taking' money intended for the schools once you account for the situation.
What is particularly troubling me with your arguments is you're taking something produced by a bad situation.... bad contract + a major recession... to rail against the TAD. The cause here is the bad contract and the major recession.... not the TAD or the city.
If the contract was written to account for the largest recession since the Great Depression or the recession did not happen, everything would be fine and the schools would see a long-term windfall from the project. Truth is, 30 years out they will likely still see a long-term windfall.
If one side doesn't fund the program that leads to the increase in property values, then they are seeking a windfall at the cost of the other.
Lastly, and this is unique to the city of Atlanta.
The City is cash-strapped. Because a great deal of the property value is businesses and not residential, this leads to lop-sided tax split between schools and the city that doesn't exist in most counties and cities with a better balance of residents to businesses.
The city has more expenses with less revenue. Their expenses do not decrease with the extra businesses over residents. They must serve infrastructure for both. The schools gets way above average revenue per capita. They don't directly serve the businesses, just the residents. They have fewer students with more property value to fund them. This is why they spend more per capita per student by a large margin than kids throughout the state.
At this point you're arguing not for the kids, but for the schools to waste money.
As for Buckhead... they can set up a limited TAD. The problem is they can't blindly keep tax money. It is only designed (by state law) to be linked to the rehab of infrastructure and underutilized land and only by using the increase of land values from new development. By law Buckhead could set up a TAD, but given it is already a well-developed area it would be hard to set one up and have it get as much revenue. In all liklihood the city and schools wouldn't agree to it. There is little reason for it outside of a few of the minor commercial corridors in the southern part of Buckhead.
I'd argue that the city is the one being inflexible. APS is willing to let the city meet its obligations in various ways and over an extended time period. The city is saying we won't pay the full amount even though they have the wherewithal to pay. Its like Donald Trump saying he won't pay the IRS because he wants to buy a new yacht and doesn't have the cash to both pay his taxes and buy the yacht.
The APS is asking for money that doesn't exist, becuase of a faulty contract that didn't account for a major recession (loss of tax revenue).
This affected the city, the county, and the schools in relations to the TAD.
The city and the county aren't causing a ruckus. APS are the only ones.
The city and the county understand the contract was based on a faulty assumption and the worse case scenario happened.
The schools are now asking the other parties to pay them a windfall from revenues from places other than the property tax stream for the TAD that would have come from places OTHER than the school portion of the increase in property taxes.
They want the same amount of cash that would have come in through taxes if the recession never happened.
It is pretty clear who is being inflexible. APS just got lucky from the white and black print of a faulty contract
Agreed. It was ridiculous for the school board to agree with this in the first place. Now that they have, their minimum responsibility is to be sure that they collect the money that is due.
If they hadn't agreed to it the Beltline wouldn't have happened and much of the private development wouldn't have happened or would have been on a much smaller scale.
In which case the funds being argued over wouldn't exist. Property values would have still dropped in the recession. The schools would then have even less money in both the short and long-run.
The TAD was set up by state law to help with the long-term growth for both budgets. The problem with your analysis of the situation is you're forgetting there are real tangible links to physical infrastructure, private investment, and the value of property (which produces tax receipts for both).
As long as the TAD exists any increased revenue goes to the TAD, not the city. The city's revenues are frozen at the same level during the TAD.
Theoretically the city would get increased property taxes after the TAD ends, although that presumes there will be more value to tax at that time. What these stick built apartments going up along the Beltline will be worth 30 years from now is anybody's guess. Historically they have not fared well over time.
Quote:
As for Buckhead... they can set up a limited TAD. The problem is they can't blindly keep tax money. It is only designed (by state law) to be linked to the rehab of infrastructure and underutilized land and only by using the increase of land values from new development. By law Buckhead could set up a TAD, but given it is already a well-developed area it would be hard to set one up and have it get as much revenue. In all liklihood the city and schools wouldn't agree to it. There is little reason for it outside of a few of the minor commercial corridors in the southern part of Buckhead.
I thought the city of Atlanta had already maxed out the number of TADs it is allowed. If there were one in Buckhead, it would have to operate like TADs anywhere else.
As long as the TAD exists any increased revenue goes to the TAD, not the city. The city's revenues are frozen at the same level during the TAD.
Theoretically the city would get increased property taxes after the TAD ends, although that presumes there will be more value to tax at that time. What these stick built apartments going up along the Beltline will be worth 30 years from now is anybody's guess. Historically they have not fared well over time.
I thought the city of Atlanta had already maxed out the number of TADs it is allowed. If there were one in Buckhead, it would have to operate like TADs anywhere else.
Buckhead is a large area. I kind of consider the Perry Bolton TAD to be Buckhead, but I guess it is more of an adjacent neighborhood. Largely my point to bu2 is the TAD is not a scheme to keep money in an area like Buckhead, but instead to cause development that wouldn't happen without infrastructure changes and site cleaning on brownfields. The core of Buckhead doesn't seem to have much trouble attracting investment.
The levels are frozen, except there is a negotiated contract. The city, county, and schools can get a payment for some perceived increases in expenses. Ironically, is that payment that is causing this ruckus. They are perceived expense increases that never fully materialized and tax receipts that didn't materials via the recession.
But other than that... yes the point I was getting at is it produced property taxes for both after 30 years.
You're discrediting the stick apartments a bit much. Yes, there will be a real estate development cycle... however two major points
1- The city is limited in land. From here on out it will be at a premium during any building booms. There will be no adjacent industrial properties in the end and no major EPA mandated site cleaning that has to be done in the future. The same historical neighorhood districts that protect the low-density of the adjacent areas will keep some value to that land.
2- Much of the properties are old industrial areas that served little to no economic purpose. Realistically what we are discussing is an area that has a $8m piece of land have a $100m in apartment buildings built on them (now a total of $108m). In the real estate cycle it will decrease and age, but it will be likely it will be far above the $8m dilapidated industrial property that needed extensive expenses to become something else.
Eventually in the long-long term it will be a mature neighborhood with a normal cycle of new and old on all the properties. Those apartment buildings probably won't last 100 years, but it will be easier to rebuild now.
The APS is asking for money that doesn't exist, becuase of a faulty contract that didn't account for a major recession (loss of tax revenue).
This affected the city, the county, and the schools in relations to the TAD.
The city and the county aren't causing a ruckus. APS are the only ones.
The city and the county understand the contract was based on a faulty assumption and the worse case scenario happened.
The schools are now asking the other parties to pay them a windfall from revenues from places other than the property tax stream for the TAD that would have come from places OTHER than the school portion of the increase in property taxes.
They want the same amount of cash that would have come in through taxes if the recession never happened.
It is pretty clear who is being inflexible. APS just got lucky from the white and black print of a faulty contract
You're totally wrong on this. The money DOES exist. Its just that the Beltline couldn't do the things they want to do. They would basically have to defer all their development. That's why I used the Donald Trump analogy. If they defer their yacht, they can meet their obligations.
I'm not arguing that the school district is efficient. But its their money, not the city's and not the TAD's.
The city is causing a ruckus. They are refusing to pay a legal obligation. The APS is being forced to sue to protect their rights. It is as if the IRS had to sue Donald Trump instead of taking less because he wanted his yacht now.
Both sides signed the contract with their eyes open. If things had taken off, the APS would have gotten less than they otherwise would have had coming.
The TAD was set up by state law to help with the long-term growth for both budgets. The problem with your analysis of the situation is you're forgetting there are real tangible links to physical infrastructure, private investment, and the value of property (which produces tax receipts for both).
This extra money for the TAD wouldn't exist if the TAD didn't exist. So this idea that we are 'taking' money intended for schools isn't exactly correct. You have to learn how and why the structure of the TAD works. More troubling with this is the schools are trying to cash in on a bad contract for money that doesn't exist. If the TAD did not exist the schools would have never gotten this much extra revenue. In part that some private development wouldn't have occured without the TAD and in part that the tax digest fell apart in the recession. There fore... no one is 'taking' money intended for the schools once you account for the situation.
What is particularly troubling me with your arguments is you're taking something produced by a bad situation.... bad contract + a major recession... to rail against the TAD. The cause here is the bad contract and the major recession.... not the TAD or the city.
If the contract was written to account for the largest recession since the Great Depression or the recession did not happen, everything would be fine and the schools would see a long-term windfall from the project. Truth is, 30 years out they will likely still see a long-term windfall.
If one side doesn't fund the program that leads to the increase in property values, then they are seeking a windfall at the cost of the other.
Lastly, and this is unique to the city of Atlanta.
The City is cash-strapped. Because a great deal of the property value is businesses and not residential, this leads to lop-sided tax split between schools and the city that doesn't exist in most counties and cities with a better balance of residents to businesses.
The city has more expenses with less revenue. Their expenses do not decrease with the extra businesses over residents. They must serve infrastructure for both. The schools gets way above average revenue per capita. They don't directly serve the businesses, just the residents. They have fewer students with more property value to fund them. This is why they spend more per capita per student by a large margin than kids throughout the state.
At this point you're arguing not for the kids, but for the schools to waste money.
As for Buckhead... they can set up a limited TAD. The problem is they can't blindly keep tax money. It is only designed (by state law) to be linked to the rehab of infrastructure and underutilized land and only by using the increase of land values from new development. By law Buckhead could set up a TAD, but given it is already a well-developed area it would be hard to set one up and have it get as much revenue. In all liklihood the city and schools wouldn't agree to it. There is little reason for it outside of a few of the minor commercial corridors in the southern part of Buckhead.
This thread is about "lopsided investment." That points out the reality that a lot of this development would have occurred in exactly the same spot without the TAD. And a lot of it would have happened, just in different locations. The TAD did NOT create all this investment.
You're arguing for the kids to subsidize real estate developers and to subsidize the corruption and inefficiency of the city.
My argument against most TADs is that they are simply building infrastructure in a location to satisfy preferred developers while depriving the rest of the city of those funds. This is especially a problem in Atlanta and Georgia which has a horrible record of corruption among public officials.
As long as the TAD exists any increased revenue goes to the TAD, not the city. The city's revenues are frozen at the same level during the TAD.
Theoretically the city would get increased property taxes after the TAD ends, although that presumes there will be more value to tax at that time. What these stick built apartments going up along the Beltline will be worth 30 years from now is anybody's guess. Historically they have not fared well over time.
I thought the city of Atlanta had already maxed out the number of TADs it is allowed. If there were one in Buckhead, it would have to operate like TADs anywhere else.
My point about Buckhead would be that it would be unfair to designate that the taxes only go to a certain area of the city.
I do think there are purposes for TADs and the Beltline may be one where it is justified, but they are vastly overused.
The city of Atlanta has plenty of underdeveloped land, cw. There are thousands of houses that need to be torn down but the city doesn't have the money to do it and/or can't even find the owners.
Remember, we're still well below 500,000 in population. Cities like Detroit and Philadelphia, which are about the same size geographically, have both had nearly 2,000,000 residents at their peak. So there is tons of room for residential growth.
As far as the durability of stick-built apartments, maybe this new batch will fare better. Most of them get a bit ragged after 30 years and lose their ability to attract high rents.
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