ALPHARETTA, Ga. — After two sessions studying how a tax allocation district may help revitalize Alpharetta’s North Point Corridor, the City Council must now consider whether to move forward.
So far, there are no public hearings scheduled to put it to a City Council vote in October, but there is interest among some council members.
For well over a year now, the city has narrowed its focus into revitalizing the North Point area, especially in the wake of recent retail competition from Avalon and the downtown City Center.
A tax allocation district, or TAD, is not a new tax. But it does allow a share of future property taxes within a certain area to be set aside and used for capital improvements — like sidewalks and parks — within that area. First adopted by the Georgia Legislature in 1985, Metro Atlanta today has more than two dozen tax allocation districts — most notably Atlantic Station.
Once a tax allocation district is defined, its taxable property valuation is locked for a term, usually between 20 to 30 years, and those properties continue to pay city, county and school taxes based on that valuation. If and when the property value increases, the extra tax revenues generated by that increase are set aside for improvements within that district.
In order for a district to receive the full benefit from a TAD, all governing authorities — the city, the county and the school district — must consent to the agreement.
Preliminary estimates, compiled for the city by Bleakly Advisory Group, say a North Point tax allocation district could generate $132 million in redevelopment funding over the next 20 years. This assumes the county and school district would be on board with the idea, and there is no certainty of that.
If the county or school district do not participate, the TAD would likely generate about $18 million in revenue over 20 years from city taxes alone. That figure climbs to $59 million with the county on board.
Even after numerous commercial setbacks in recent years, the North Point area remains an important revenue generator for the city, the county and the schools. North Point Mall alone pays out about $4 million a year in property taxes to all the local taxing jurisdictions.
If the city moves forward with establishing a TAD, the first order of business would be to win over the County Commission and School Board, said Geoff Koski, president of Bleakly.
Speaking at the city’s most recent workshop Sept. 16, Koski said most capital projects within TADs are financed through a bond, which is paid off over the term of the TAD.
“You would need to have all your agreements done between you and the schools, between you and the county, regarding this TAD before you think going out for a bond issuance,” he said.
Members of the City Council appeared hesitant to pull the string without certain guarantees.
Councilman Ben Burnett argued this council could be putting future councils on the hook to pay off a bond alone if the county and school district only sign agreements for short terms.
Koski said the city can dissolve the TAD even after it’s been implemented. Any collected money is disbursed back to the taxing jurisdictions.
Nevertheless, Koski said, it’s important the city act to lay the groundwork for the TAD now.
“It’s necessary for you to act on this before you can really start the serious negotiations with the schools and the county,” he said. “Typically, throughout the state, the schools and the counties want to see you act first, then we’ll talk [and] really get down to business.”
Mayor Jim Gilvin said that if the city establishes a TAD, it would encourage current North Point property owners to engage in revitalization faster.
“We looked at what the vision for that corridor could be, and when we look at our coffers, we have no money available,” Gilvin said.
Development guided with input and tax dollars from the city, county and school district would have great potential, the mayor said.