Important Ballot Information!
This November, voters will have the opportunity to consider allowing the City of Duluth to exercise Redevelopment Powers for the improvement of blighted or economically depressed areas. In addition to voting for elected officials for the general municipal election, the Tax Allocation District question will be on the ballot for the upcoming special election. The Ballot will ask the following question:
Voters desiring to vote for the issuance of “Redevelopment Powers” shall do so by voting “YES” and voters desiring to vote against the issuance of such “Redevelopment Powers” shall do so by voting “NO”, as to the question propounded, to-wit:
The question to be voted upon:
|
( ) YES
( ) NO |
Shall the Act be approved which authorizes the City of Duluth to exercise redevelopment powers under the “Redevelopment Powers Law,” as it may be amended from time to time, for the purpose of improving economic and social conditions in depressed areas within the city?" |
How TAD's work in Georgia
What is the Redevelopment Powers Law?
The Georgia Redevelopment Powers Law was enacted in 1985 to give additional
powers to local municipalities in order to facilitate the redevelopment of
blighted or economically depressed areas. One of the powers that was granted to
local governments in this law was to issue tax allocation bonds to finance
infrastructure and other redevelopment costs within a tax allocation district.
In order for an area to be designated a TAD, the government must verify that the
area is need of redevelopment. These findings are reported in a Redevelopment
Plan, which demonstrates why the area needs to be redeveloped and how the
municipality plans to revitalize the area. The plan provides the redevelopment
agency with the powers to improve dilapidated facilities and to use tax
increment financing to achieve the goals of the redevelopment plan.
How does a TAD work?
The City designates an area in need of redevelopment, adopts a redevelopment
plan outlining how the area will be developed, and creates the TAD. The County
Commission and School Board consent to including their share of the new tax
revenues, or tax increment, in the TAD. The current value of the tax digest in
the area is set as a base, and the City, County, and School Board continue to
receive tax revenues on that value for the life of the TAD. As vacant and
dilapidated properties are developed, the property values within the TAD
increase. New tax revenues from this increased value are placed into a special
fund to pay for redevelopment costs or to finance bonds issued to fund capital
improvements.
Will creating a TAD cause a tax increase?
No. The property tax millage rate stays the same as before the TAD was created.
In fact, the additional tax revenues received as a result of the increased value
of newly developed or redeveloped property can relieve the tax burden on other
properties. For example, if a vacant lot is developed into a retail center with
loft housing, which has significantly higher value than the previous use, the
new tax revenues will lessen the burden on other property owners. In addition,
the new development in the TAD may stimulate other development in the
surrounding area, adding more new property taxes to the City’s coffers. New
retail development also generates increased sales tax revenues, which further
benefit existing taxpayers.
What will TAD funds be used for?
The Redevelopment Powers Law outlines the possible uses for TAD funds. In
Georgia, eligible redevelopment costs include capital costs for the construction
or improvement of public works, new buildings, renovation, repair or demolition
of existing building, grading and clearing land, and all soft costs associated
with these activities, cost of land assemblage, and costs for conducting
environmental impact or other studies. However, the Redevelopment Plan for each
district specifies the permissible uses of the funds which support the goals
outlined in the Plan.
What is a bond? What is a TAD bond?
A bond is similar to home mortgage, but for a larger project and greater amount
of money. A TAD bond is the mechanism through which funding is created to
provide incentives for new development in designated underserved areas. TAD
bonds are issued to provide up front funding to be paid back by the projected
future increases in property tax revenues.
Why is there a need for Tax Allocation Districts?
Tax Increment Financing is a widely used economic development tool that offers
local governments a way to revitalize their communities by expanding their tax
base, offsetting, in part, federal and state funds that are no longer available.
TADs can act as the catalyst to attract further private investment into
economically depressed areas. TADs help local governments attract private
development and new businesses which create jobs, attract customers, and in turn
generate additional private investment in areas that would have difficulty
attracting investment without an incentive. Essentially, the creation of a TAD
generally leads to an increase in tax revenues, above what already existed.
What are the opportunities for public input?
- Referendum vote of the citizens.
- Prior to TAD creation, the Redevelopment Plan is available for the public to review.
Who controls TAD funds?
The Mayor and City Council may control the TAD accounts or delegate that
authority to the DDA or a new Redevelopment Agency formed for the purpose of
managing the TAD funds.
Are you allowed to use funds derived from one TAD to assist with another area?
The Redevelopment Powers Law stipulates that the increment generated in a TAD
which is derived from increases in property taxes must be spent within the TAD
from which it came.
When does a TAD District terminate?
Typical TAD Districts exist for 25-30 years, depending on the term of the bond.
However, any TAD may be terminated earlier if all bonds are paid-off and the
municipal board votes to terminate the district.
Is there a limit to the number or size of TAD’s Duluth may create?
According to the Redevelopment Powers Law, the City cannot create a new TAD if
the total taxable value of the existing TADs plus the proposed TAD is greater
than 10 percent of the tax digest (total value of taxable property) for the
City.
Does Duluth have a TAD District in mind?
The Buford Highway Corridor has been discussed by City Council as the highest priority area
in the City in need of redevelopment assistance.
Do other cities and counties provide this type of financing?
Currently, 48 of the 50 states allow localities to use some form of tax
increment financing. Most notably, Chicago had experienced significant success
in attracting development to back to the City though 122 TIF districts which
have assets of $174.3 million. Locally, eleven tax allocation districts have
been created: seven are located in Fulton County - five in the City of Atlanta,
one in the City of East Point and one in unincorporated Fulton County, three in
Cobb County - one each in the Cities of Acworth, Marietta and Smyrna, and one in
unincorporated Clayton County. Several Gwinnett County cities have scheduled
referendums in the next year to ask voters to weigh in on this funding program.
For additional info regarding the Redevelopment Powers Law (RPL) & Tax Allocation Districts (TAD's)
click here.