BRADENTON, Fla. — The Atlanta Board of Education on Monday affirmed its participation in two of the city’s tax allocation districts, clearing a major hurdle to advancing up to $200 million of bonds for the long-delayed BeltLine project.
The agreement settles outstanding issues with regard to retroactive and future tax-increment revenue for school district collected in the BeltLine and Perry-Bolton tax allocation districts, or TADs.
“The resolution affirmed Atlanta Public Schools participation in the tax allocation districts and will help enable us to go to the bond market as market conditions permit,” said Ethan Davidson, spokesman for the nonprofit Atlanta BeltLine Inc., an affiliate of the Atlanta Development Authority, which is implementing the BeltLine plan.
The BeltLine is composed of numerous projects aimed at redeveloping urban, residential and commercial properties in a 22-mile inner core area around downtown Atlanta in the Beltline TAD, largely with bonds backed with tax increment financing.
Although the BeltLine’s redevelopment and finance plans were approved several years ago, bond financings were held up because of a legal challenge that ultimately led the Georgia Supreme Court to rule that the state’s constitution did not permit school districts to participate in TADs. Last November, Georgia voters amended their constitution to allow schools to participate in TADs on a voluntary basis.
During the time when school district participation in the TADs was being challenged in court, Atlanta Public Schools collected $6 million of tax increment revenue in the Perry-Bolton TAD and $12 million in the BeltLine TAD. With the legal issues resolved earlier this year, officials with the BeltLine, the Atlanta Development Authority, and the school board began negotiating for release of the collected tax increment as well as the school board’s future participation in the TADs.
Those negotiations culminated Monday with the Board of Education agreeing to release $6 million to the BeltLine, as well as making allowances for future tax increments from the school to be used to support BeltLine bonds, and other considerations.
The resolution between the Board of Education and the BeltLine is expected to allow a bond ordinance, now under consideration by the Atlanta City Council’s finance committee, to continue through the approval process.
The ordinance, if ultimately approved by the council, would authorize the sale of up to $200 million of BeltLine tax allocation district bonds to be sold. The proposed ordinance indicates that those bonds would be validated by a court before they would be sold by Wachovia Bank NA.
In addition to funding various BeltLine projects, the debt authorized by the ordinance would be used to take out a $29.5 million loan the BeltLine obtained from a syndicate of banks in 2007 for initial funding.
Bond proceeds also would be used to take out the private placement of $64.5 million of tax allocation bonds sold last year to Wachovia and SunTrust banks. The private placement did not include tax increment from Atlanta Public Schools since that was still being legally challenged at the time.
It is not clear when the bond authorizing ordinance will be considered by the full City Council, which is currently focused on approving a $541 million budget for fiscal 2010 that calls for a property tax increase.
