5/9/2016 – Nancy Jester – TAD

WABE 90.1 – Closer Look: DeKalb Country Commissioner Nancy Jester weighs in on the saga regarding the Tax Allocation District proposal to help finance the redevelopment of the old Doraville GM plant.
http://news.wabe.org/post/closer-look-anonymous-sexual-assault-allegations-spelman (49 minutes into the show)
Rose Scott (Cohost of WABE 90.1 Closer Look) – In 2008 after the General Motors plant closed in Doraville, the big question what do we do with it.  There was talk of an Atlanta Falcons stadium and of course a mixed use development.
Finally the Integral Group stepped up and plans were announced.  It would turn the old plant into business and retail space.
Martha Dalton (Cohost of WABE 90.1 Closer Look) – That included high rises, green spaces, grand walk ways and 270,000 sq foot media complex called Third Rail Studios.  But in order for this development to proceed, a significant portion of the funding would come from th
e creation of a Doraville Tax Allocation District (TAD)
So far the county commission is on board, but not the DeKalb County School board.  The board would need to approved the proposed TAD to proceed.  Last week on Closer Look, school board chairman Dr. Melvin Johnson said, “We believe that all funds generated by tax dollars should go to student learning”.
Chairman Johnson also talked about the financial burden he said the school board felt the district would be subjected to over the years.  After that interview, DeKalb County Commissioner Nancy Jester, who represents District 1, released a statement calling the interview striking because of the blatantly false statements made by the chair of the board of education.
She joins us now.
Rose Scott / Martha Dalton – The DeKalb County Commission unanimously approved the TAD proposal last December?
Nancy Jester (DeKalb County Commissioner) – Yes.
Rose Scott / Martha Dalton – Prior to that vote, did you all have conversations with the school board?
Nancy Jester – No.  Not the Commission as a whole.  The developer and certainly the city of Doraville was reaching out at that time.  The first steps were to go through the city and the county and then to the school board.
Rose Scott / Martha Dalton – Since the school board has come out and said they have some concerns, right now they are not in favor, have you had any conversations with them?
Nancy Jester – The County Commission?  Certainly I’ve sent correspondence and have discussed that my preference that they look at it.  They’ve gotten a number of folks, community leaders and so on asking for them to simply and officially review this item.
The TAD proposal has not in any way, shape or form been officially proposed to the board of education.  The city has consistently asked for a time to present it so that a public dialogue can take place about the TAD.
Rose Scott / Martha Dalton – Are you in favor of having everyone come to the table?  Maybe having representatives from the school, the county, Integral Group because just sending correspondence … just all of y’all get together and really go through this.
Nancy Jester – The county and the city has approved it, so it’s now to the school board.  They have to approve or not.  We would like for them to take the issue up.  They haven’t done so.
I’ve brought an email sent just on the 4th from Doraville asking to meet with the board of education because they have yet to entertain anybody’s request for a meeting.  I’d be happy to participate and Doraville wants to participate.  Integral Group wants to participate.  They have yet to be given the meeting.  There have been a number of requests made of the school district to make this an agenda item even at a work session and that’s never been granted.
Rose Scott / Martha Dalton – You also stated the board chairman refuses to understand the basics of school finance, how a TAD works and the financial realities of the project.  Can you explain what you meant by that?
Nancy Jester – He made the statement here that the school system would loose a million dollars a month.  First of all, they don’t get a million dollars a month from the property.  Either he doesn’t understand the facts or he misspoke.
They do get $900,000 or so a year and that would continue on and they wouldn’t loose a dime of that under a TAD.  A TAD is an increment financing situation, so everything you’re currently getting on it, you keep getting.  What you’re foregoing as the property improves, then there would be an increase in the appraisal value of the property and the incremental tax on that additional increment of value is what you would not receive.
But, they would still have to pay it.  Whoever owns the property would still have to pay that. It would just go into a TAD fund that would be used for those types of projects you already agreed upon.  For instance, there is a lot of true public works projects that need to go on.  There are some site defects like the MARTA station is not well connected.  A public works project would have to go on there to connect the MARTA station to the property.  Those are the types of projects incremental funding would do.
Rose Scott / Martha Dalton – As a former member of the school board, can you understand why the school board might not want to forego any revenue even though they are still getting what they get now.  They might want to keep the door open to getting more revenue down the road.
Nancy Jester – I can understand that based on ignorance on their part.  I think they are ignorant of the way it works.  I say that because without their participation, it’s highly unlikely the value would increase pursuant to the same sort of way it could increase if they did the TAD.
So, I think they are cutting off their nose to spite their face.  As I pointed out in my op-ed I put on my blog about it, it’s not really a choice between TAD and no TAD.  The choice will end up becoming TAD or abatement.
I don’t like abatement.  If I had input into the way the state runs.  The state gives these development authorities grand powers and cities and counties both have development authorities or can have them.  Doraville has a development authority as does DeKalb.
What happens and it happens all the time, I don’t think it’s necessarily in the best interest of tax payers, but development authorities can without one vote from any elected public official, no one that can be held accountable.  They can go in an essentially do what is a bond-lease sort of purchase deal which has the net affect of abating all the taxes.  The school board will get no say in that.
In fact, it just happened in Brookhaven with the Hawks deal.  It happened in Brookhaven with an office building that would have gotten built in my opinion without the abatement over at Perimeter Summit.
So, what’s going to happen is, I’m not saying I like it, I have strong reservations about the powers of development authorities across our state.  But, it’s going to happen.  I can’t see any other way around it.  You’re going to have one of those deals go down.  What happens then is the taxes paid now, they lose.  So that $900,000 something they get, that’d be gone … and the incremental addition … and on top of that, because it’s not as preferable from a bonding perspective as a TAD, the project will get scaled back and you’re more likely to get strip malls and big box and apartments which would produce less value, not really get the public infrastructure up to speed, not the connectivity that needs to happen and not the corporate campus that would bring in the eventual revenues that would support the school district in the end.
Rose Scott / Martha Dalton – Commissioner Jester, let’s talk some numbers.  The total funding revenue for this development, the Integral is putting in how much?
Nancy Jester – I imagine that depends on how the project goes down.  I couldn’t say, that would be a question for them.
Rose Scott / Martha Dalton – They will be on the program tomorrow.  One could argue that they are the developers, they should put up a significant portion of this, it’s the same issue the city of Atlanta folks had with the new Falcons stadium, even though it’s just $250 million.  $250 million towards a billion dollar stadium is not much on the tax payer.
But, can you understand that if this is the developer, then let them pay for the bulk of this.  If it’s a scale down strip mall …
Nancy Jester – All the risk is on them.  They bought the property.  They have all the liability.  It’s already on them.  The real problem with this property is that it’s a GM site, it was not included in the bankruptcy, so it was not liquidated.  So there was no deal, GM held this property and collected a pretty penny for it despite the fact the tax payers of the United States bailed them out.  I have some problems with that.
It is what it is.  That property sat as it was from 2008 to now, and now we have an opportunity to decide what kind of project we want.  Do we want to do a public/private partnership where we can actually put in some expensive but needed infrastructure.  It doesn’t have roads, water sewer connections, the connectivity to MARTA.  All of these things will be public goods in the end just like the 17 street bridge that connects Atlantic Station.  That’s a TAD.  APS participated in that TAD.
Are we going to do that or are we going to say the risk is on you, and they know it, and you’ll just have to make due.  Yeah, we can get a Best Buy and some more apartments, but that will get abated and that will create a lot more liability on the school district because there will be students they have to educate and they won’t get a dime in taxes to do so.
Rose Scott / Martha Dalton – Let’s focus on the students.  As you know, DeKalb County like some other districts in this area, they have some issues regarding educating students aren’t performing well.  With the possibility of whatever happens in November, the voters could approve a school take over.  The school district has to come up with programs to deal with that.
You’re a former school board member.  You know the issues.  You were part of the 6 the Governor had suspended and removed.  As a Commissioner, if you’re publicly slamming the school board, do you think that’s helpful in further negotiations if it’s all for the good of the county?
Nancy Jester – So, my husband is on the school board, so I’m familiar with the school board’s financial issues because I exposed them.
But, let’s talk about right now.  Right now they are sitting on a lot of operating cash.  They’ve got almost a quarter of a Billion dollars in balance as of the end of February.  They are anticipating over a hundred million more dollars than they received in revenues just 3 years ago.  They have plenty of money.  And they are taxing at 23.73 mills.  They haven’t decreased folk’s taxes.  They’ve got a quarter of a billion dollars in their capital fund.
It’s very disingenuous for someone to come on here, particularly the school board chair, and say I don’t want to see any money not spent on student learning.  Well, he should know better, because time and time again the school district hasn’t even met the 65% threshold to spend their operating budget on direct instructional expenditures pursuant to state law.  And they get waivers every year form the DOE.
I understand that in the lean times when we had the crash.  But now, when you look at their budget, it’s absolutely disingenuous to say something about this project taking away money from student learning when you’ve got all these resources and they’re not even going there.
Rose Scott / Martha Dalton – How do you know that?
Nancy Jester – I brought some numbers for you.  You can print this off from their website.  The waivers are a matter of state record.
Here’s their bottom line.  They’ve got a total fund balance of $227 million in General Fund and $280 million in their Capital Outlay fund.  In fact, their anticipated revenues according to their own statement, as of February, the anticipations are $874 million and just 3 years ago there were $760 million in anticipations.  That’s over $100 million more where they expected to be 3 years ago.
Rose Scott / Marth Dalton – You mentioned that one of the next steps would be getting this on the board’s agenda.  How does that happen?
Nancy Jester – Unlike the Commission.  I can bring something to the Commission and get it on the agenda.  That would be the end of that and it would be put on there.  But, school board members don’t seem to be given that same latitude.  I don’t know why, they could, but they’re not.  The board chair or the superintendent must put this on the agenda.
Rose Scott / Marth Dalton – OK.  So it must go through one of those two.
Nancy Jester – Right.  So we can’t even have … if they want to vote no, vote no.  Have a public discussion, but they won’t even have a public discussion.  Why we won’t have that, I don’t know.
Rose Scott / Marth Dalton – You’ve got to understand the same argument has been made about the DeKalb County Commission and all the drama that you all have faced over the last couple of years.  At the end of the day, Commissioner Jester can say it’s still the school district’s revenue and they have a right to decide where it needs to go.
Can you understand that?  Unless there’s allegations of misuse of funds.
Nancy Jester – It’s the taxpayers money.  I agree.  They need to understand the sophistication of what’s going to happen.  There will be an abatement.  They will get zero.  They will leave the taxpayers, students, districts and potential commercial based development worse off if they don’t approve.
[00:14:35]  ( 1 minute left – they talk about Brannon Hills)