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| BeltLine Entities |
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Planning, implementing and building the BeltLine |
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Reaching out to our community to raise awareness and funds |
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BeltLine Basics
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| Funding | Tax Allocation District (TAD)
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BeltLine Tax Allocation District (TAD) financing is the primary local funding source for the BeltLine and is expected to generate approximately $1.7 billion of the total project cost of $2.8 billion over 25 years.
The 6500-acre BeltLine TAD was created in 2005 after receiving overwhelming support from the community and votes of approval by the Atlanta City Council, the Atlanta Public School Board, and the Fulton County Commission. Importantly, TAD financing does not require a tax increase. It is a means of using future tax funds to pay for investment in the BeltLine now.
UPDATE: A February 2008 Georgia Supreme Court decision effectively limited the TAD funding to Fulton County and Atlanta City tax increments. A November 2008 referendum offers Georgia voters to amend the Constitution of Georgia to authorize community redevelopment and authorize counties, municipalities and local school boards of education to use tax funds for redevelopment purposes and programs. If approved, this will re-affirm the 1984 vote by an overwhelming percentage (71%) of Georgians to afford local school boards – like city councils and county commissions – to choose to participate in TADs. And it will restore the opportunity for Atlanta Public Schools to participate in the BeltLine TAD.
How does TAD financing work?
To understand how BeltLine TAD financing works, you first need to know a few things:
- All property taxes in the City of Atlanta are split between the City, the County (either Fulton or Dekalb, depending on the property location), and Atlanta Public Schools.
- The 6500-acre BeltLine TAD covers 8% of the City’s land area and lies entirely within Fulton County.
- Most of the properties within the BeltLine TAD are underutilized or abandoned industrial properties. The BeltLine TAD boundaries were created to avoid the inclusion of existing single family homes.
The diagram below helps explain how TAD financing works.
1. The properties within the BeltLine TAD were generating a certain level of property tax revenue at the end of 2005.
2. When the City of Atlanta, Fulton County and Atlanta Public Schools approved the TAD, they agreed to continue to receive the same 2005 level of tax revenue from properties within the BeltLine TAD for the next 25 years, at which point the TAD will expire. This is represented by the rectangle at the bottom of the diagram.
3. As new development occurs on the primarily underutilized properties within the BeltLine TAD (spurred by the direct and indirect incentives as part of the BeltLine Redevelopment), those properties generate additional property tax revenue. This is represented by the triangle with the jagged edge on the diagram.
4. Bonds are issued to pay for the capital investments in the BeltLine over the 25-year project period. The principal and interest on those bonds is paid back using the incremental tax revenue generated by new development.
5. When the TAD expires after 25 years, the City of Atlanta, Fulton County and Atlanta Public Schools receive the entire tax revenue generated by properties within the BeltLine TAD, but at a tax base projected to be approximately $20 billion higher than in 2005 as a result of the redevelopment associated with the BeltLine. This is represented by the lightly shaded portion on the right side of the diagram.
How will TAD funds be spent?
Unlike other TAD's in Atlanta, the BeltLine TAD will not provide incentives for private developers in areas that are already undergoing active redevelopment. In these areas, the TAD investments in greenspace, trails and transportation will continue to spur redevelopment.
The majority of the BeltLine TAD funds will be used to invest in land acquisition, multi-use trails, greenspace, transit, transportation improvements, and affordable workforce housing and Atlanta Public Schools projects. Some BeltLine TAD funds will be used for developer infrastructure, primarily for environmental brownfield cleanup, or to jump-start development in underdeveloped areas.
The spending of BeltLine TAD bonds is approved by the Atlanta City Council, which approved the BeltLine Five-Year Work Plan in July 2006. As part of the Community Engagement Framework authorized by the BeltLine legislation, the Tax Allocation District Advisory Committee (TADAC) was created to advise on how TAD funds are used. This committee is composed of technical experts and community leaders and is managed through Atlanta BeltLine, Inc.
How do TADs support the education of Georgia’s children, and how would Atlanta Public Schools benefit from participating in the BeltLine TAD?
School districts are the major beneficiary of rising property values. According to a 2007 analysis of TADs in Georgia commissioned by the Livable Communities Coalition, the tax base inside a TAD grows an average of 300 percent faster than the tax base in nearby communities outside of the TAD. A school in a blighted area generally will not improve unless the area surrounding it improves first. TADs attract investment to areas that have high concentrations of poverty.
They help bring life back to these communities. Children who live in redeveloped communities perform better in school because of several factors:
- a stronger mix of households of varying incomes
- increased diversity and cultural awareness
- more parental involvement in schools
- decreased crime in communities where kids live
- more positive role models in the community
- better nutrition from new retailers and food stores that follow the increase in households and disposable income
School districts can negotiate specific benefits that help to build capacity to educate more kids or increase the quality of education. In the BeltLine TAD the Atlanta Public Schools district stands to gain:
- Up to $10 million for the construction of recreational facilities or athletic fields at school sites within the BeltLine Redevelopment Area.
- Subsidized or free transit rides for APS students.
- Payments totaling $150 million for educational programming paid in $7.5 - million installments in years 6 through 25 of the life of the TAD.
Preferences in the use of the TAD bond-funded BeltLine Affordable Housing Trust Fund for the benefit of educators and staff employed by APS.
How do TADs impact school districts – and particularly Atlanta Public Schools?
For larger school districts … the financial impact of school district consent to individual TADs and individual redevelopment projects is relatively small in the context of their overall budgets. Over time, school districts could be impacted by the cumulative effects of consenting to multiple TADs and multiple bond issues. In most cases, however, it will take many years, multiple large-scale redevelopment projects, and multiple bond issues to divert even one or two percent of future school district taxes into TAD special funds. For example, the Atlanta Public Schools’ estimated total share of tax increment contributed to TADs represents about 4 percent of current local school tax collections. This 4 percent contribution results from placing more than 9.9% of the city’s tax base in TADs, the issuance of more than $400 million in TAD bonds and the inducement of more than $3 billion in investment since 1998. At the same time, the Atlanta Public Schools has received offsetting tax revenue from more than $8 billion in city-wide digest growth that has occurred outside of TADs over the same period.
REPORT: A Livable Communities Coalition Report Survey and Analysis of Tax Allocation Districts (TADS) in Georgia: A Look at the First Eight Years, October 4, 2007
BeltLine Redevelopment Plan
The BeltLine Redevelopment Plan, developed with extensive community engagement and input, was approved by the Atlanta City Council in 2005 in order to create the BeltLine Tax Allocation District. The Redevelopment Plan outlines the entire BeltLine 25-year plan.
TAD Feasibility Study
In June 2004, Atlanta Mayor Shirley Franklin formed the BeltLine Tax Allocation District Steering Committee to conduct a study to determine the feasibility of funding the BeltLine with a Tax Allocation District (TAD). Chaired by Carl V. Patton and Barney Simms, the Steering Committee found that revenue generated from a BeltLine TAD would cover approximately 60 percent of estimated project costs – without requiring a tax increase. The study also stressed that the development associated with a BeltLine TAD would generate significant economic benefits to the City, County and School Board.
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