Commentary: DoraTAD – New Schools Superintendent Won’t Contribute, Whether Gambling or Philanthropy
Tom Doolittle, Contributor. File Photo.
DeKalb County, GA, January 11, 2016 – Commentary by Tom Doolittle, Contributor – “Our core business is teaching and learning, not speculative, unpredictable real estate projects.” Dr. R. Stephen Green, Superintendent DeKalb County School System
DeKalb School Board members are probably a little uncomfortable with new DCSD Superintendent R. Stephen Green being so outspoken about Tax Allocation Districts (TADs) – http://brookhavenpost.co/dekalb-schools-superintendent-has-reservations-participating-in-doraville-tad/35801/
By preemptively providing the media with a statement rejecting the Doraville TAD, Green has deftly deflected all the pressure that TAD proponents have tried to put on him. He has also sent tremors through the economic development world by invoking the unspoken “s” word—“speculation”.
The City of Doraville’s Tax Allocation District is 289 acres and projected to deliver $293 million in additional tax revenue over the next 25 years if the city’s redevelopment plan works. DeKalb County Government (“DeKalb”) has agreed in principal to participate. The school system would pay nearly three times what the city or county pays. The proposed breakdown for a maximum of $247 million in bonds would be about $50/50/150 million in round figures. (The outsized 58% school system contribution is unique to DeKalb because the government’s tax millage is lowered by the Homestead Option Sales Tax).
Green hasn’t taken umbrage with or demurred on the “Assembly” project at the General Motors site per se. That now represents only 149 usable acres of 289 acres in the TAD. Reading between the lines, the Superintendent wouldn’t support a TAD anywhere regardless of its projects’ particulars: location, jurisdiction or plan. Speculation is speculation, real estate development is real estate development and economic development is economic development—and Green says school systems don’t belong doing any of those.
Regarding “speculation” though, TADs can carry widely different levels of financial risk—and they are uncertain for different reasons for different entities. The Atlantic Station TAD had anchor tenants signed and substantial “soft” support from a civic league renowned in influence before the City of Atlanta took it on—Doraville has none. Bond holders presumably take on “all” the financial risk, given that taxpayers are not legally on the hook for defaults—yet would a city or county really allow a default given reputational implications? What developer is involved and how solid is its financing? Plans can range from abstract to those specifically associated with end-users.
Fundamentally, Atlantic Station is a corporate plan, one which TADs are well suited. By contrast, Doraville’s TAD (of which the former General Motors property is only half) is principally a program that builds a town, not a private sector development. It is planned for “public grounds” and is a sociological experiment first and contemplates revenue production last. One third of TAD bonds would be used for one project which idyllically connects the GM site to the rest of the town—the Atlanta Journal Constitution calls it a tunnel while the developer terms it a “covered street”. The cost, estimated from $80 million to $120 million would be on the order of investments that DeKalb makes for wide usage—jails, courts, libraries, etc., not areas which would remain unutilized by most in DeKalb.
As I have stated, the Assembly project is elegant and represents the idea of fulfilling all of New Urbanist theories that “mixed-use” developments have not. It’s not a corporate center, it’s a village from which the rest of the little town of Doraville can reinvent itself. Without the school system contribution, the $100 million in bonds that Doraville and DeKalb can underwrite can be used to leverage sums from various agencies. Those agencies would be appropriate for the type of “infrastructure” needed to fulfill its New Urbanist model—congestion relief/alternate transportation, density, mixed-income and income disparity solutions.
Dr. Green is articulating a problem that stems from the same underlying problems that required gyrations for DeKalb County to get to this juncture—the Doraville TAD, as planned (or unplanned) is philanthropic by nature—“speculative” being his term. Dr. Green has simplified at least one part of the equation by deciding the TAD is not required for him to do the job he was hired to do and he has handed the decision over to his board to grapple with. Meanwhile, he has removed himself from the predictable backlash from OTHER small towns in DeKalb or school parents in remote areas which will demand the same philanthropy.
Op-Ed: er “Doraville” TAD – County holds cards while its own house is in shambles
Op-Ed by Tom Doolittle
DeKalb County, GA, August 14, 2015 –Op-Ed by Tom Doolittle – The DeKalb County Government (“DeKalb County”) and DeKalb School System (“DeKalb Schools”) are currently being asked to “invest” tax revenue with the City of Doraville. County commissioners have already received a redevelopment plan from that city that confirms the feasibility for a $297 million Tax Allocation District (TAD) in which the county government would provide 22% of a fund to pay off Doraville bonds (the school system’s role would be 57%). Doraville will be the minority player at 21% according the redevelopment plan. So county agencies would have an approximate 80:20 financial commitment against the city—an arrangement appears to give District 2 county commissioner Jeff Rader pause.
On Tuesday, August 11, county commissioners could have voted to accept Doraville’s TAD resolution and approve an intergovernmental agreement (IGA) that would detail the roles and responsibilities of each jurisdiction, including finance terms and participation on governing committees. Presumably, a separate agreement goes to the school board for approval. Commissioners demurred and accepted a motion to defer a vote on the TAD based on Rader’s concerns about TADs with cities. The idea would be to negotiate management and oversight opportunities proportionate to each jurisdiction’s financial commitment. Rader, who has planning experience, also mentioned interest in reviewing the particular scope of TAD projects.
The redevelopment plan for the TAD is replete with drawings and information about the Integral Group project at the former General Motors facility, but there is little more than property tax information about another 42% of the TAD—the city center and the Buford Highway corridor. Also the plan is marketed to excite Transit Oriented Development fans even though about thirty percent of the TAD scope relates to areas beyond the immediate influence area of the Doraville MARTA station. More importantly, most people construe such “TOD” plans as being commissioned by MARTA but MARTA has no official involvement with the Doraville product. See redevelopment plan at http://www.scribd.com/doc/269561577/2015-05-20-Urban-Redevelopment-Agency-Full-Agenda-1118
Doraville could have about $50 million in TAD funds to work with if DeKalb County and the school system didn’t participate. Review of the plan indicates that connections to Doraville’s city center, the hallmark of the current GM site redevelopment would be out of the question with only $50 million and would then depend on separate funding from state or county. The same would probably be true for “mobility enhancement” (adding a road to Peachtree Industrial Boulevard) and even a planned innovative linear park system/drainage component. In short, as the GM project developer states, the project would cease to be “Doraville”.
Any county development incentive proposal comes at a bad time for DeKalb County, which is reeling—in good part involving a development authority board and chairman in the process of being replaced by neophytes. Coincidentally, the past week highlighted one other project that was mostly touted for its economic development prospects, giving away land for a professional soccer training facility. Here’s how that bears on the Doraville TAD incentives: (1) commissioners were given no opportunity to suggest changes to negotiating terms, in fact were surprised by the deal and public comments were not allowed and (2) the development authority was the primary DeKalb player.
As far as the appeal of the TAD itself, this will be one deal that will probably eventuate in “yes” votes from all seven commissioners, whether in its current or a reduced scope. That is, assuming the IGA is anywhere near assuring. First, most public officials have viewed TADs as “no brainers” as they bank on future revenues and don’t encumber current tax receipts (a baseline). They have nearly unconscious confidence in real estate markets. Secondly, the TAD has been strangely conflated with the GM plant (“Assembly, Doraville, USA”) project in which the public has been driven by mass media complicity that dwarfs even “Fort Mac” and “The Gulch”. There is nearly universal (and visceral) fascination with the prospects of a remade GM site—and inexplicably the Integral Group, developer du jour.
So DeKalb County is emotionally invested.
The city’s consultant says governments aren’t rolling the dice. They identified no financial risks to this public financing—not one—in its TAD feasibility report. That’s not all, he says explicitly that the city (and thereby, county) carries no bond default accountability—that leaves out the “reputational risk” in which a failure to pay would affect its subsequent bond issues. None of these cautionary issues matters to me or DeKalb taxpayers if Doraville remains on its own—or if developers of speculative projects don’t build public facilities FIRST. But having the TAD and redevelopment plan in DeKalb’s hands is an entirely different matter. DeKalb (and DeKalb Schools) participation puts Doraville itself on trial in my book. If DeKalb’s agencies can’t negotiate an extremely significant role in running Doraville’s TAD—even reshaping it—then Doraville should be on its own.
This editorial opinion should not be construed as a product of Unhappy Taxpayer & Voter’s reporting team. According to the writer, he attended several city council meetings and redevelopment area meetings in 2010 and 2015 and has had discussions with several officials close to the project.