Brookhaven, GA, October 13, 2014 – Brookhaven Resident, Chad Boles provides the following Letter to the Editor on Redevelopment Powers.
From Mr. Boles: On April 10th, Governor Nathan Deal signed HB 1136. His signature was the culmination of lobbying efforts by the City of Brookhaven elected officials. The bill places the following referendum on our November 4th ballot.
Shall the Act be approved which authorizes the City of Brookhaven to exercise all redevelopment powers allowed under the ‘Redevelopment Powers Law,’ as it may be amended from time to time?
We think of many local areas around Atlanta as redeveloped or improved. The Dresden Drive district is a model of improvement. Virginia Highlands didn’t need a TAD. Buckhead Financial District, Piedmont Park, Lenox Park, Lynwood Park? No TAD required. All Commercial and Residential Developers invited.
Members of the Brookhaven-Peachtree Community Alliance spent long, hard hours dedicated to the Brookhaven Overlay District. It protects the look and feel of our city. The Zoning Board of Appeals and Code Enforcement should guide development. Expand on it. Any claim tax incentives are needed to attract development is a claim our taxes are too high. Lower them.
This ballot referendum would give our city government the ability to issue debt via finance authorities. Finance Authorities include Development (multi-family housing), Industrial (Industrial Parks), Housing (Low Income Housing), Transportation (Toll Roads and Bus Systems) and Recreational (Sports Arenas), etc. All of them in one fell swoop with no chance for watered down authority before the election. The City of Brookhaven would be vested with these powers, forever. After the law has passed, your input is merely appreciated but not regarded.
California was the first state to embrace Redevelopment Powers. It is now dismantling ALL of the Development Authorities to stabilize state finances. Georgia will be doing the same thing in 20 years. We’ll look like visionaries for rejecting it now. Taxpayer risks include:
- Taxpayer obligated debt of the General Fund that support Parks and Police: RPL(36-44-3(12)), ( RPL (36-44-11), (RPL 36-44-20)
- Lack of governmental transparency
- Lost tax revenues from developments that will occur anyway
- Higher financing cost on traditional General Obligation bonds
- Unsupported but increased public service demand
- Hand-picked Real Estate Developers
- City service hardships created by unexpected property management and/or demolition.
After referendum passage, the city would create Tax Allocation Districts, or TAD’s, for any of the new Authorities. A TAD, or prospective development opportunity is created on existing property parcels and, most often, favor big box retailers. Once a TAD is designated, the Development Authority borrows money to finance land acquisition and development via a Revenue Bond.
Click on all these links for Georgia’s colorful history with Redevelopment Powers and revenue bonds created by them; Brookhaven Town Center, conflict of interest questions in Canton, new Atlanta Falcons stadium, Canton Indoor Pools, failed golf course projects, bankrupt business partners in Cherokee County, a failing movie studio, the underutilized Gwinnett Braves Stadium, a Charter School default and resulting credit downgrades, bonds issued after project completion at Elle Apartments, conflict of interest problems in Fulton County and “expert” opinions on Atlantic Station. The Belt Line has City of Atlanta and Atlanta Public Schools fighting over millions in missed bond payments.
A state audit recommends more transparency in all Georgia Development Authorities, but still no change. The Atlanta Fulton Recreational Authority is plagued with broken promises of development around Turner Field. To make matters worse, the Braves left City of Atlanta with an unusable property requiring maintenance, demolition and unpaid bonds. Furthermore, profit vaporizing costs are created by Development Authority expenses and personnel.
The argument taxpayers aren’t obligated for Development Authority debt is an illusion. These stories report real risk scenarios. Mark Twain once quipped, “History never repeats itself, but it often rhymes.”
Any City of Brookhaven Authority will be operationally similar to the ballot initiative; without input or transparency. City of Brookhaven will issue bonds totaling tens of millions of dollars. The developer will pay property taxes that, in theory, pay off the bond in 30 years. For the city’s efforts in the deal, we hold the title to the property without increased tax revenue. In essence, the developer uses the municipal bond for land acquisition and construction instead of borrowing from a bank. The avoided interest charge equals the “increment” between the frozen and new property taxes (i.e. Developer pays interest on debt in lieu of property taxes, etc.)
We won’t see a return on our investment for 30 years. Operational cost and employee expenses of the Development Authority could exceed the “increment”, thus, eliminating our future expected return.
Sandy Springs issued $169M of bonds this year using a similar bond scenario. What if the project isn’t sustainable or the inevitable recession emerges? The developer hands us the keys to the building, reserves are depleted, parks projects are delayed and the Brookhaven PD is reduced. That’s what.
This is an equal opportunity “no” vote. Fiscal conservatives protect their wallets. Progressives protect diversity. Libertarians protect free voice. Small business owners protect creativity. Free market advocates protect small government ideals. Cityhood advocates protect Police and Parks. Send your message loud and clear. Our vibrant city neither needs nor wants Redevelopment Powers.
– Chad Boles