Atlanta Authority OKs TAD Funding Despite State Supreme Court Ruling

ATLANTA - The Atlanta Development Authority yesterday approved funding recommendations for six projects within one of the city's first tax allocation districts, the Westside TAD. The projects would be funded in part from proceeds of a new bond issue expected to total $110 million.

Two other TADs, the BeltLine and the Perry-Bolton, are also slated for bond deals this year, according to ADA president Peggy McCormick.

However, the amount of funding available for any TAD projects could be cut, as a Georgia Supreme Court ruling on Feb. 11 said that using school tax revenues in tax allocation districts violates the state constitution.

Georgia TADs require taxing entities, such as the city, county, and school board, to allocate increased property tax revenues created in the district based on new development that comes on line after the creation of a TAD to back TAD debt. When the district is created, property values are frozen. The additional taxes that are paid on the incremental increases are used specifically for the tax allocation district.

But the high court's ruling called that into question and could reduce funding for TAD projects.

Voters will weigh in on the issue in November to determine if school-related tax dollars can be used for TAD projects.

Sonya Moste, director of marketing and public relations for the ADA, said the main hurdle has been determining how to still bring these projects into fruition without the school dollars.

"[ADA] officials are working with developers because the incentives for the developers are less, and the increment has been cut in half," Moste said. "They're having a hard time making the numbers work."

Roughly $100 million of bonds are planned for the BeltLine and about $23 million are planned for the Perry-Bolton TAD.

"The ruling has made us look at the TADs project by project," McCormick said. "The amounts of the cuts has varied."

In the meantime, officials are also concentrating on the $110 million bond sale planned for the Westside TAD. While the exact structure is still being mapped out, McCormick said a letter of credit from Wachovia Bank NA is expected to be used as an enhancement.

Touted as one of the most significant is the Center for Civil & Human Rights, which could receive up to $40 million of the proceeds. That amounts to 32% of the center's $125 million cost.

The Center for Civil and Human Rights, intended to recognise the contributions of Atlanta and Georgia residents to the fight for African-American civil and human rights and the struggle for human rights around the world, would also be the primary exhibit site for the papers of Dr. Martin Luther King, Jr., which are owned by Morehouse College, the ADA said in its news release.

Cheryl Strickland, the managing director of TADs for the ADA, said in the release that officials were excited to see the Center for Civil & Human Rights project finally get underway.

To further develop the Westside TAD, which was created during the late 1990s, up to $58 million of the proceeds could be used to build 12 private development projects, more than 900,000 square feet of new office and retail space, structured parking spaces, and new housing units, the ADA's release.

The plans approved by the ADA next go to the Atlanta City Council for consideration. Authority officials said they expect the council to review the projects by the end of August.

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