DeKalb Schools – Not a Fan of the TAD

Stan Jester
DeKalb County
Board Of Education

The City of Doraville has embarked upon a major redevelopment opportunity to create a regional mixed-use employment and activity center at the site of the old General Motors plant. The Doraville TAD Bleakly Report outlines the rationale, boundaries, fiscal data and potential projects for the City of Doraville Tax Allocation District (TAD).
A Tax-Allocation District (TAD) is a defined area where real estate property taxes gathered above a certain threshold for a certain period of time (typically 25 years) is used for a specified project improvement. These improvements are typically for revitalization, especially to build the public infrastructure necessary for the development – roads, water and sewer lines, bridges, etc.
Once any TAD obligations of the district are retired, the City, County and Schools will receive the full property tax increment from the accelerated pace of new development created. Throughout the TAD period, the proposed redevelopment will generate additional retail sales with increased sales tax and ESPLOST revenues.
The city, county and school district are each taxing authorities over that property.  In July, the Doraville City Council voted to approve and adopt the Redevelopment Plan and TAD.  Yesterday, the DeKalb County Commissioners unanimously passed the TAD .
.pdf link icon   Intergovernmental Agreement (IGA) with Doraville and DeKalb County
.pdf link icon  Doraville TAD Bleakly Report (outlines the rationale, boundaries, fiscal data and potential projects for the TAD)
Potential benefits to DeKalb County Schools
•  The TAD will accelerate future growth in DeKalb County Schools’ Tax Digest.
•  DeKalb County Schools will continue to receive the estimated $936,000 in property tax revenue currently generated in the TAD Redevelopment Area over the term of the TAD.
•  The proposed redevelopment will have the potential to generate an additional $18 million in new DeKalb County Schools property tax revenue, which will revert to DeKalb County Schools upon the termination of the TAD.
•  If DeKalb County Schools participates in the TAD, DeKalb County Schools would receive $113 million more (over the first 25 years) from ESPLOST revenue and in personal property taxes from participating in the TAD, than it would receive if it did not participate in the TAD.
News Release

Superintendent Stephen Green

Dr. Stephen Green
CEO & Superintendent, DeKalb County School District

“The DeKalb County School District has been asked to consider partnering with the DeKalb County Government and the City of Doraville to create a Tax Allocation District (TAD) that includes the former GM assembly plant and portions of the City of Doraville. The TAD would produce approximately $247 million in tax revenues that would be used to fund infrastructure improvements such as roads, a tunnel, and other public projects. The debt including debt service of approximately $600 million for these improvements would be paid for with tax revenue above what is collected currently in the area.
I have several serious reservations about committing school resources over the course of the 25 years of the TAD for this project.

  1. Our core business is teaching and learning, not speculative, unpredictable real estate projects.
  2. Two of the three current TADs in DeKalb County have not succeeded in meeting their tax revenue projections. The Kensington and Briarcliff TADs have decreased in tax digest value since their inception with Kensington showing a decrease in excess of 20 percent.
  3. After several years, the ongoing inability of the City of Atlanta and the Atlanta Public Schools to fulfill their intergovernmental agreement based on a TAD for the financing of the Beltline project demonstrates how unforeseen pitfalls can be costly to the local school system.
  4. The school tax digest for the Doraville TAD would be fixed for 25 years with a best case scenario of nine more additional years before the School District would recoup taxes that had been given up.

We are expected to be good stewards of our resources and I think making a 25-year commitment to freezing the school tax digest does not fulfill that commitment.”
— Dr. Stephen Green, Superintendent DeKalb Schools


  Superintendent: DeKalb Schools won’t be part of Doraville TAD
By Marlon A. Walker – The Atlanta Journal-Constitution
Jan 10, 2016 – Superintendent Steve Green said DeKalb County Schools would not contribute financially to what could be one of Atlanta’s most significant mixed-use developments since Atlantic Station, saying he would not gamble with millions in tax dollars meant to educate children.
  DeKalb adds safeguards to public investment in GM site
By Mark Niesse – The Atlanta Journal-Constitution
Dec 24, 2015 – DeKalb won’t contribute any tax money to $247 million worth of infrastructure upgrades unless the county school system signs on. DeKalb also added a clause to the deal that ends its participation in the redevelopment plan after 10 years — on Dec. 31, 2025 — unless the county votes to continue its investment.
  DeKalb backs development of GM factory site, awaits schools’ support
By Mark Niesse – The Atlanta Journal-Constitution
Dec 15, 2015 – Ambitious plans to rejuvenate a closed-down General Motors factory site cleared a major hurdle Tuesday when the DeKalb County Commission unanimously agreed to invest in the redevelopment effort.
DeKalb school district voices concerns over Doraville-backed project
By Brent Barron –
Dec 23, 2015 – “We are expected to be good stewards of our resources and I think making a 25-year commitment to freezing the school tax digest does not fulfill that commitment,” DeKalb County School Superintendent Stephen Green said.
“I have seen the statement from the superintendent, but that is not necessarily a reflection of the entire board — we have not been given an opportunity to make a proper case,” Doraville Mayor Donna Pittman said. “The facts are compelling, so we feel confident if given an opportunity to make the case.”

Commissioner Nancy Jester

Doraville Tax Allocation District
By Nancy Jester
Dec 22, 2015 – Every dime of property taxes for this property must be paid. The TAD does not change that. The business community and investors have expressed their concerns about DeKalb’s business climate. The GM site redevelopment is one of the largest projects in the Southeast. Successfully redeveloping this area will improve DeKalb’s reputation, bring thousands of jobs to the area, and improve land value; resulting in a larger commercial tax base for everyone.

8 responses to “DeKalb Schools – Not a Fan of the TAD

  1. Melvin Johnson, Chair, Board of Education

    sent via email
    Dr Green , thank you for researching and evaluating the Doraville TAD proposal. I support your position.

  2. It’s a terrible deal for the taxpayer. In addition, that land is contaminated.

  3. Ideally, the current impass will encourage a more thorough and critical assessment of the Doraville proposal and include a comparative analysis to the Kensington, Briarcliff, and Atlanta scenarios for lessons learned. Hopefully, the conclusion of such an assessment will result in a mitigation plan that will reduce the risks implied by the three existing examples.
    I strongly commend Dr. Green’s prudence in his approach to this opportunity, which reflects sound judgment and prioritizes the core mission of our school system. Nonetheless, improving the economic base of DeKalb County is vitally important to our economic recovery and the health of our tax digest, which cannot be done without the school district playing a major role.
    It is my hope that the dialogue/negotiations will continue towards a manageable resolution and not default to pure risk avoidance.

  4. Dr. Green,
    I fully agree with your decision to stay away from the Doraville TAD. As you say it is speculative and unpredictable. It is not speculative and unpredictable that your School District has an abundance of district and school administrators full of arrogance, ignorance, incompetence, and indolence. Your word and opinion will carry more weight and you will deserve respect from everyone if you retired or fired about 1/3 of the 25% of the ineffective County and school administrators that occupy positions well above their level of competence.

  5. Stephen Green, Superintendent, DeKalb Schools

    Quote From AJC
    This is speculative in the sense that it’s a high-stakes gamble. I don’t have a degree of comfort in taking our children’s education and compromising our efforts in the immediate. There are too many uncertains and unknowns and assumptions right now.

  6. Marshall Orson, DeKalb Board of Education

    Quote From AJC
    There’s always a possibility the people driving the TAD will come back with new information or parameters that certainly could lead to us taking a different look at it. But that’s incumbent upon those taking the lead to make a case on whether we participate at all.

  7. Michael Bell, Chief Financial Officer

    October 2015 Financial Report
    Please see our internal analysis of the cash flow impact of the proposed DoravilleTAD (for the redevelopment of the old GM site plus 120 acres).
    In summary, using their development projections we would go negative $235.3 million over the next 25 years (assuming a TAD Bond(s) is issued). Again, using their development projections, it would take an additional 9.3 years for the DCSD to break even. Therefore, if everything goes according to their plan the DCSD would break even in about 34 years.

  8. I’m confused about why the school system is against this. For our purposes, I will assume as true that the school system, either with or without the TAD going forward, continues to receive the approximately $1M in current property tax. I will also assume that was/is true about th Kensington and Briarcliff TADs but if the area hasn’t improved, the school system would have lost nothing. As such, I’m going to dismiss those concerns unless someone can explain the true downside of trying to improve those areas.
    From what I’ve read in other spaces and is confirmed here by financial projections of “negative $235.3 million”, it seems as though the school system is betting that the development will proceed without the TAD. If that is the position justifying the rejection, how is agreeing to it engaging in speculation? By rejecting participation in the TAD, isn’t the school system effectively saying “we KNOW that area is going to improve so we don’t want to give up our expected $235.3M”? If that truly is the position (which I think it really is), that is understandable….but why not say that?
    Also, has anyone actually discussed getting the developers to carve out a few acres and build DeKalb a new high school there to alleviate the overcrowding at Cross Keys? Or just carve out the land and then put building the high school as the number 1 project on the approved use list? Sure would be nice to see a John Lewis High School there and demonstrate DCSS understands that, while education is its core business, it takes the whole of DeKalb to do that. And that means working together. For example, students want jobs. Could DCSS, by partnering with this development, have an instant new and logistically easy source of senior year internships with anything that goes there from high tech to the movies? I bet they could.