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)– https://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.