TAD – Q&A – Open Discussion

Stan Jester
DeKalb County
Board Of Education

The developers of the Doraville GM Plant site are calling the live, work and play community “Assembly”. They are seeking a Tax Allocation District (TAD) from the city, county and school district. The TAD was overwhelmingly approved by the city and county but came to a screeching halt with the school district.
Melvin Johnson, the school board chair, inquired into the desire of each board member to have a TAD presentation.  A majority of the board declined coming together to learn more about the TAD.
Recently, a petition was started asking the DeKalb County School Board to Hear the TAD Proposal.
From talking to AJC reporters, DeKalb citizens and listening to public comment, there are a number of questions that need to be answered about the TAD and the Assembly project. I write this blog to open the dialogue.
Luke Howe, the Economic Development Director for the City of Doraville, answers my questions about the TAD and the Assembly project.

Assembly Doraville TAD

Question: Why do you need a TAD? What kind of improvements can be paid for by the TAD?
Luke Howe (City of Doraville Economic Development Director): A TAD is needed to fund large scale critical infrastructure at the front end of the project. The items that can be paid for by a TAD include public owned infrastructure, including ~ 23,000 feet of roads, corresponding sidewalks, lighting and landscaping on both sides of the streets, and ~ 10,000 feet of sewer and water lines.
The most critical improvement is the covered street that connects the site to the Doraville MARTA Station, a Public Central Park, trail and a bike path that connects to the surrounding neighborhood. The covered street is expected to cost about $50,000,000 and is the item which will have the greatest impact in drawing large corporations who are demanding transit connections for their employees.
Question: The Kensington and Briarcliff TADs have decreased in tax digest value since their inception with Kensington showing a decrease in excess of 20 percent. If the same thing happened to the GM Plant site, how would that affect the Assembly TAD?
Answer From Luke Howe:  The Briarcliff, Kensington and Beltline TADs are not appropriate comparable sites to Assembly. Those are “Area TADs” that have neither specific projects driving the needs or a private partner who has made significant investment within the TAD boundary. If for some reason the Assembly TAD value decreases by “20 percent” the bond purchasers would be the only people affected. The taxpayers will have the public improvements funded by the bonds.
Question: The Beltline TAD spelled out how much money APS was going to receive. There were millions of dollars the city couldn’t pay APS. Why shouldn’t we expect the same thing from this TAD?
Answer From Luke Howe: The Beltline, the “build and they will come TAD,” is also an Area TAD. Additionally, it’s the first to use TAD bonds to take property off the tax rolls to build a trail with the expectation that the trail will spur collateral growth. Think about that. They eliminated their base increment when they bought private property for the trail. That, of course, created the need for a complex payment agreement to make up for the base loss. It was bold and ambitious, but it was inherently risky and speculative in nature.
Unlike those examples, the GM TAD is a Project TAD most similar to Atlantic Station. In these cases, a willing developer has secured the property and is driving the need. These are much less speculative because the development team has a plan. We know exactly what they plan to build and what their project will generate in terms of revenue. If the development scope or pace falls short, the amount of each specific bond issue will be correspondingly lower but, under no circumstances, will that result in any financial exposure to any of the public entities. The three public entities (i.e. the City, County and School Board) need to execute a well thought out agreement between them that reflects their negotiations.
Question: Are there any examples of any successful TADS in the metro Atlanta area?
Answer From Luke Howe: Many – Atlantic Station, Camp Creek, the Atlanta Westside and Eastside TADs have all spurred growth, increased the tax digest, and generated and/or increased sales tax revenue, personal property tax and other taxes.
Question: If the Assembly TAD doesn’t happen, will the Assembly project seek tax abatement from the Doraville Development Authority?
Answer From Luke Howe: If the Doraville TAD is not fully supported, The Assembly team will, in partnership with The City of Doraville and DeKalb County, pursue alternative financing for the public improvements.
Question: Atlantic Station received millions in grant money. How much grant money has the Assembly project received for redevelopment?
Answer From Luke Howe: If The City of Doraville/ DeKalb County/ MARTA are successful in attracting grant funding, it directly reduces how many TAD dollars are needed to fund public infrastructure. That would then allow the TAD funding to be paid off earlier and enable the public entities to receive the new tax revenues sooner. Like Atlantic Station, grants will be pursued by the City led coalition to reduce the local funding of the public infrastructure.
The City has several applications pending. But keep in mind grants have to be matched with local money in most cases. We’re applying for a $50 million USDOT TIGER Grant. The minimum 20% match is $10 million. We need $13 million to be competitive.
Question: It was determined that 59 GM sites were contaminated with hazardous waste. Why would this brownfield site be any different?
Answer From Luke Howe: GM did a good job of addressing hazardous conditions as they were identified. Despite their efforts, the old buildings (now demolished) contained some asbestos and lead that was remediated in advance of demolition.
Brownfield designation does not mean a site is contaminated but it does provide a mechanism for cleanup just in case something undetected is discovered during construction. The Brownfield Program provides a protocol for notification, addressing, and reporting.
Question: What studies have been done on the environmental condition of the site?
Answer From Luke Howe: Assembly has undergone extensive testing for environmental contamination including nearly two hundred exploratory borings. In addition to the testing, historical research was performed dating back to the beginning of the plant in the 1940’s. Both history and testing provided detail on the locations and makeup of soil that may need to be remediated.
Question: What is the current environmental condition of the site?
Answer From Luke Howe: Since the buildings that contained the majority of contaminants have been demolished and all of the building slabs and foundations remain in place, the former GM site is currently cleaner than it has been in over 50 years. If any additional contaminants are discovered, they will be cleaned in accordance with the Brownfield Program as regulated by the State of Georgia Environmental Protection Division (EPD)

So, it would seem that the question isn’t TAD or No TAD. The choice is between TAD or abatement. What are your thoughts?

Related Posts

AJC Marlon Walker

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.

Commissioner Nancy Jester

Doraville Tax Allocation District
By Commissioner 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.

Superintendent Stephen Green

DeKalb Schools – Not a Fan of the TAD
By Superintendent Stephen Green
Dec 16, 2015 – 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.

Petition – Ask the DeKalb County School Board to Hear the TAD Proposal
  Bob Kelley (Apr 29, 2016) – I strongly believe that this is very important to our community and our county. From what I’ve read, the school board could certainly use the extra revenue. I respect Egbert Perry and his reputation and know that he will deliver a quality finished project!
  Shelby Triick (Apr 29, 2016) – This development is vital to our area and will be a catalyst for improvements throughout
  Katerina Taylor (Apr 23, 2016) – The future of DeKalb is on the line and if we don’t take action now, the citizens of this county will experience the adverse impact of our unwillingness to make the right decisions around infrastructure, economic development, and future development of people in the county
  Robert Hope (Apr 23, 2016) – There is no logical reason for the school board to refuse to allow anyone investing $66 million in our county to present his proposal to the board. Not doing so is simply rude and not the way to encourage anyone to want to do business in DeKalb.

21 responses to “TAD – Q&A – Open Discussion

  1. “A majority of the board declined coming together to learn more about the TAD.” … Wow. So closed-minded and short-sighted.
    Essentially, the math of it is – the tax collection stays the same, whether you approve the TAD or not. However, if the TAD proves successful, then a couple of decades down the road the tax collections will increase exponentially. If the development doesn’t occur, then the future of DeKalb is not going to be nearly as vibrant.
    That said – a teacher has written a blog post with a pretty interesting idea for redistricting – and building a new high school in Doraville to alleviate over-crowding there (instead of busing the Cross Keys students all over the place). https://georgianeducator.org/2016/04/09/dekalb-county-schools-redistricting-how-will-you-respond/
    More on that over-crowding can be found at the Dunwoody School Daze blog. As you can see in this board presentation, Region 1 is bursting at the seams, while schools in south DeKalb have literally thousands of empty seats – due to years of new school construction to address past growth in those areas while wildly underestimating the growth in Dunwoody, Doraville, Chamblee and Brookhaven as well as Lakeside and Clarkston. http://dunwoodyschooldaze.blogspot.com/2016/04/dekalb-county-schools-middle-and-high.html

  2. It appears that …
    Public Financing the Assembly project – Much like the tax abatements offered to secure the $50 million Hawks Practice Facility in Brookhaven’s Executive Park, Luke Howe made it clear the Assembly project will seek abatement from the Doraville Development Authority.
    Tax Abatement – Rounding up, the school district currently gets about $1M in tax revenue annually from the GM Site property. With 100% tax abatement, the school district will get nothing for at least 15 years.
    Furthermore, you can bond against a TAD allowing the Assembly project to build the $50,000,000 covered street to the MARTA station “which will have the greatest impact in drawing large corporations who are demanding transit connections for their employees” (according to Luke Howe). You can’t bond like that against a tax abatement.
    Revenue Projections – Here are the revenue projections. The pink is “Without the TAD and with 2% growth”. The blue is “With a TAD”.

  3. Below is the link to the website about the latest and greatest capacity study. We have been down this road several times before – and I’m still not sure that the public input is used, valued or even heard.
    People in the north end of the county have been asking for more capacity for years – yet, although replacement schools have been built in Chamblee and Tucker, as well as renovations and additions to Lakeside, Dunwoody and a bit to Cross Keys, construction of new seats continued mostly in the south end of the county ….
    What follows is the most recent SPLOST construction, according to the Powerpoint presentation: Chamblee HS was replaced with a pretty much brand new facility at a cost of $62 million but little capacity was added. A brand new McNair Middle was built at a cost of $34 million. Additions were built at MLK (400 seats – $17 million), SW DeKalb (600 seats – $22 million) and Miller Grove (200 seats – $6 million). SW DeKalb seems to get some kind of attention from every SPLOST that passes. Bear in mind too, that Arabia HS was built with SPLOST money with the stated intention of alleviating over-crowding in the south end, however, once started, the stunning facility was deemed a magnet school for math, science and engineering. This did alleviate area schools over-crowding a bit as it peeled off the best and brightest, but many from other areas around the county chose to attend as Arabia offered them close to a private school education (complete with uniforms). But it also required an enormous amount of money for free magnet transportation.
    Transportation is one area that DeKalb schools over-spends in a really big way so that students are free choose whichever school they wish. (DeKalb offers the biggest program of school choice of any metro district.) Transportation – and the associated cost – must be part of any discussion about choice programs, as well as redistricting and over-crowding vs under-capacity. The unintended consequence of magnet/theme schools is that local schools end up losing thousands of students to these ‘choice’ situations – complete with a complicated ‘hub’ system of transportation. Read the results of a decade of school choice on south DeKalb’s traditional schools as reported back in 2010: http://dekalbschoolwatch.blogspot.com/2010/05/north-vs-central-vs-south-whats-deal.html
    At any rate – here is the rest of the ‘public input’ schedule for the next round of construction and redistricting:
    Round 1 of the all new – SPLOST 5 – construction input meetings has been completed.
    Round 2 (The Board and consultants will present options for public input)
    Tuesday May 10th at Dunwoody HS at 6:30pm
    Thursday May 12th at McNair HS at 6:30pm
    Round 3 (Present Recommended Plan)
    Thursday, July 14th at AIC at 6:30pm

  4. That’s news Stan – I had always heard the tax abatement was strictly on the increased value. That the current value is what the tax would be based on for a set number of years.
    ps – sorry to get off-topic by discussing SPLOST and construction issues – but these all seem to roll together – we either have vision for the future or we don’t. Growth can be fast and impactful or slow and ordinary. Either way, the school district must keep up, which has been an enormous challenge for as long as I’ve been participating.

  5. TAD – All taxes are paid by the Assembly property owners. The taxes collected on the increased value go towards the predefined projects.
    Tax Abatement – There are three Development Authorities the Assembly can avail themselves of (city, county and state). The Development Authorities can abate up to 100% of their taxes at which time no taxes are paid and the county and school district get nothing. Like the Brookhaven tax abatement mentioned earlier, there is usually a deal between the developers and the city and the city gets their money.

  6. Go to plan B and forget using the our school tax $$ for a corporate capital venture. As a BOE member, you can disagree but to continue to advocate for a project the DCSS has said NO to is questionable behavior on your part. Please spend your time and efforts supporting the BOE and District in positive ways and stop undermining those decisions.

  7. Dianne, The board has not voted on the TAD. Dr. Green has expressed his opinion and I would like to express my thoughts and opinions in an open discussion.
    According to Luke Howe, Plan B is tax abatement.

  8. Max Leighman

    I listened to an exchange between Supt Green a few members of the DeKalb Delegation. The Chair of DCSS eloquently stated he was searching for evidence of success with Georgia TADS, which are sometimes discussed as Tax Incremental Funding (TIFs).
    Subsequently, I researched Georgia TADs for specific data on the above referenced subject.
    GSU has ample success stories to share with Supt. Green. Coincidentally, I learned that Missouri is one of the largest TIF users in the US. Dr. Green came to us from Missouri. Let’s show him this study since he is from the ‘Show Me’ State.
    The January ’16 GSU report shows how the Great Recession affected the ‘promises’ made by TIF promoters. Look at Pages 19-22 for graphs. The whole report is readable and should help answer Supt. Green’s questions so he can present FACTS to his Board.
    Effects of the Great Recession on Tax Increment Financing in the United States, Georgia and Atlanta

  9. sent via email
    School Board Chairman Johnson:
    I wanted to write you today to let you know that I fully, and wholeheartedly, support your opposition to having the DeKalb County School System participate in the Development Project by The Integra Group at the old Doraville GM Site. I applaud, and commend, your effort and steadfastness here.
    Without getting in too deeply into the specifics, or the mechanics, of the TAD, in question, I simply believe the two following points should be paramount in your, and all DCSB, decisions moving forward:
    1) Given the recent history of the DCSS, the Board should simply, singularly and solely focus any, and all, efforts on the School System itself – the students first and foremost, but also the teachers, staff and facilities as well. Anything, anything at all, that even in the remotest possible way, deviates from this clear, singular and sole focus on maintaining, safeguarding and improving the school system should simply be set aside.
    2) All business deals should be able to stand on their own merits. If Integra Group cannot craft a deal, and a project, that without assistance or dependence on multiple Government agencies and entities, that can stand entirely upon its own merits, then they simply shouldn’t do a deal. Very often, in business, there is a fever for doing a deal for doing a deal’s sake. This is totally and completely wrong-headed and has been the source of a great many spectacular failures in the past. The dustbin of history is loaded with deals of great promise, large and sweeping in scale, but that ultimately could not stand upon their own two feet. If Integra Group cannot craft a deal without the assistance of the DCSS then they simply shouldn’t do one. As for their threats, forget about them. As one of the largest contiguous and uninterrupted parcels of land inside I-285, this lot is primed for big things. If Integra can’t manage without DCSS assistance I’d be leery of dealing with them at all. Their threat to do a smaller deal should be met with…go ahead…by all means.
    One need not look much further than the Beltline-APS Deal to see how quickly these Public-Private Partnerships can go sideways. Let’s not waste this Golden Opportunity of full and double accreditation for all DCSS schools, a new Superintendent and an economy and county finally on a upswing and blow it all, the fruits of years of hard work, on this possible boondoggle.
    I urge you in the very strongest terms possible to hold strong, and to hold out, in the face of this private sector begging for a handout, and bullying.

  10. David Resnick

    Some folks seem to be saying that the School Board should not be involved with TADs, but if that were the case, they’re approval would not be required. The fact is, the School Board is, by law, a key part of whether to move forward with the TAD, and as such, the School Board has a responsibility to hear the proposal and judge it on it’s merits.
    The arguments I’ve heard against the TAD thus far are either misleading or just plain wrong. The School Board would NOT be losing tax revenue with the TAD, but they WILL be losing tax revenue if tax abatement proceeds, and furthermore tax abatement will greatly diminish the potential for a large increase in revenue. In the case of tax abatement, the GM plant will likely be developed much like the surrounding area – more auto dealers, massage parlors, pawn shops, check cashing shops, and fast food restaurants – none of which would generate the large increase in revenue that an office/shopping/residential complex similar to Atlantic Station – but bigger – can generate.
    The benefit of the kind of development that a TAD would bring to education and children is obvious – much much great tax revenue for public schools. Tax abatement will not do this – it will just be more of the same limping along that we’ve been stuck with for many years.
    I very much hope for the sake of our community, our families, and especially our children – cool headed, well-informed fact-based reasoning prevails and we move ahead with the TAD – toward a brighter future.

  11. Ryan Compton

    No business deal where so much needed public infrastructure will ever be completed without public dollars. The school board should at the least hear the proposal and vote. Remove the speculation and uncertainty. I believe they should vote YES. Dekalb County is becoming a laughing stock for business and economic development. We have no good deals and have had no good deals in recent memory to boast of. We need a win, not just for ego but for the future. Like it or not business development drives property values, tax revenue, and quality of life improvements in the community. With tax revenue increases comes school revenue increases. This concept is not the debate. Should the school district participate? I say yes, but I do believe that there should be some guarantees for the school district only. At the least a guarantee of the return with interest of the initial investment. America was built on taking chances in order to move forward I think we should take this chance.

  12. We can do this right if we’re smart about it. We can maintain the things that make Doraville great, such as our diverse population, without displacing folks who are poor, and in the process still improve our businesses, our downtown center, our green spaces, our pedestrian/bike friendliness – and yes, the schools. This developer seems to have a good track record for accomplishing this. And if the TAD doesn’t happen, a tax abatement would be the likely alternative for funding the project – which would directly deprive schools of any tax revenue from the development for 15+ years. The opposition to the TAD from the school board just strikes me as shooting itself in the foot. This is a no brainer, y’all.

  13. Kirk Lunde

    I was opposed to the school district’s involvement prior to reading this post. Now, I want to sit down and discuss it with someone who isn’t involved, but knowledgeable. It seems the information I was basing my opinion on was incorrect.
    I know Stan and Nancy are the only ones who care, but I wanted to say so publicly because sometimes (often) I am wrong and when I am, I admit it.

  14. Stan Jester

    Kirk, I talked to an AJC reporter who said the same thing. He said people, even school board members, had incorrect information about the TAD.
    Knowledgeable but not involved …. who did you have in mind? My suggestion would be board members at Atlanta Public Schools or the county/city development authority. Obviously the Doraville Mayor and Councilmen are knowledgeable, but pretty involved.

  15. Lee is correct. The deal can be handled with a Development Authority (Decide DeKalb) abatement of taxes and the school board has no decision making in that process. But a TAD would be better here for the redevelopment of the site and placement of infrastructure.

  16. As a past Doraville city council member, I was excited but cautious about the proposed GM site redevelopment. My experience with a previous attempt by developers to fund their construction with public dollars leaves me skeptical. Here are a few notes:
    The best way to attract professionals and businesses to an area is to have a great school system. Deserved or not, Dekalb county schools suffer from an image problem. I spoke to many people who came here to start careers and families but plan to move once their children reach school age. The situation has much improved, but turning much needed school funds over to real estate developers is irresponsible and foolhardy.
    Doraville was presented a rosy picture of a mixed use, live/work/play development, but that’s hard to reconcile with the two auto dealerships currently under construction on the site.
    Building access to the Marta station should be funded by Marta’s capital improvement funds.
    Doraville has no real interest in environmental concerns. The Leadership in Energy and Environmental Design (LEED) building standards ordinance passed in 2008 expressly for new development in Doraville including the GM site was quietly made optional recently by a compliant city council to accommodate the developers.
    Doraville’s city government and staff don’t have the qualifications and experience to ensure the best interests of our citizens and businesses are protected. Mr Howe was originally hired as a mayor’s aide – his background is in political campaign work. Doraville needs a professional city development staff with real experience.
    I don’t fault the developers; they are just doing their job. I’m sure they have contingency plans and will be successful regardless of the outcome.
    Bob Roche
    Doraville City council, 2008-2011

  17. Stan Jester

    Bob, Thank you for your public service on the Doraville City Council and for joining our discussion. My thoughts and questions …
    Economic Development – Agreed. A quality education system, and I would argue public safety, are both necessary and sufficient conditions required for solid economic development.
    MARTA Access
    So you feel the $50 million MARTA access should be paid for with public funds, specifically from the MARTA capital budget, but you don’t want it to come out of the education budget? (The MARTA fiscal 2015 capital budget was $470 million.)
    TAD vs Abatement – How confident are you that the Doraville Development Authority will abate this project if the TAD doesn’t happen?
    LEED – Do you have a link to anything online regarding making LEED optional for Doraville development?
    Qualifications – You are also concerned with the qualifications and experience necessary for the City of Doraville to protect the best interests of its citizens and businesses.
    Thanks again for your thoughts and insight. –Stan

  18. http://www.doravillega.us/council-passes-leed-ordinance/
    t: Monday, December 7, 2015 4:42:29 PM
    To: Councilmember Trudy Jones Dean
    Cc: Shawn Gillen; Cecil McLendon; Sherry D. Henderson
    Subject: RE: LEED Certification
    Councilmember Dean,
    We have reached out to both projects and have not heard back yet from the architect of the Auto Mall. At this time, Third Rail has indicated they will not be pursing LEED Certification. Both projects are in the SD-1 zoning district. As stated in my email of November 16, the SD-1 district regulations have exempted projects from complying with LEED certification. Therefore, the Auto Mall and Third Rail Studios are not required to meet LEED certification and we have not received any LEED checklists from either project.
    Enrique Bascuñana, AICP | Community Development Director
    [The City of Doraville]
    http://www.doravillega.us | enrique.bascunana@doravillega.us
    p. +1-770-451-8745 | f. +1-770-936-3862

  19. Stan Jester

    Bob, How confident are you that the Doraville Development Authority will abate this project if the TAD doesn’t happen?

  20. Truly puzzled at the lack of willingness of several members (per initial post above) to learn more. The entire board has the opportunity to lead by example and educate themselves more about the proposed TAD in an open public forum by placing it on their agenda.
    Dr. Green and Dr. Johnson publically stated the business of the school system is education; economic development is core to strengthening that business therefore they should be willing to listen with open ears and minds how an opportunity can support the business they are tasked with managing. Strong and effective leaders listen, ask, discuss and hopefully make an informed decision. Furthermore, as elected officials and public employees they are entrusted to make informed decisions.
    Hopefully, the community can come together to gain support from the entire or majority of the board to educate themselves before making a decision.

  21. Spending practices (history) and TAD investment are apples and oranges–except to say that on one you complain that they spend to much and the other you want to spend with very little control and lots of potential for a fund for a candy store. With school system funding, you’ll have the second largest available individual TAD bond package in Georgia’s history (and half of the largest TAD in US history)–and then by using the TAD as matching funds for other grants (which they can do WITHOUT school funding–and is a good idea)…they will have funds for any public project they want. Doraville has plans to build a completely new government center and will use COUNTY TAD money to do that. They also will will use county TAD money to purchase land in the city center to leverage with investors to essentiall rebild “main street.
    First, none of those things have anything to do with the coveted redevelopment of the GM site and second, beyond a few small grants from the county, using county TAD money in large amounts is unprecedented by COUNTIES in cities is unprecedented. This amounts to selling a TAD on the basis of Assembly, but using it for something else–a shell game. The only way to control Doraville is to keep the TAD as small and limited as possible and grow it later under strict agreements. Right now, that means no school funds.