Tax Allocation Districts – Future of Smyrna?
posted in Smyrna Vinings Real Estate |This week the Atlanta Business Chronicle reported on a new study by Atlanta-based Bleakly Advisory Group that was commissioned by the Livable Communities Coalition. The study included 27 TADs in Georgia, which encompass more than 18,700 acres and a tax digest value of nearly $1.9 billion.
But before I scare you all off, perhaps we need to take a step back. Why is this relevant? There has not been much press recently around the Smyrna area, but Smyrna passed a tax allocation district (TAD) to help fund re-development of areas including Jonquil Plaza and Belmont Hills. In Georgia, designation of an area as a TAD enables the use of tax increment financing (TIF) to fund these activities.
First the the boundaries of the TAD are set, then a redevelopment plan is finalized and bonds are issued. The future incremental increases in property taxes that are generated by the new development are used to pay off the bonds.
There has been much turmoil in the Smyrna area and in many other cities around Georgia. While TADs and TIFs are relatively new in Georgia, they have been used by municipalities for decades. Part of the issue lies in the fact that state law provides for the Board of Education to have final sign-off. That is where the rub comes as the law requires the education board to approve something that they are neither trained to understand nor comfortable doing.
As the Jonquil Village development moves forward, stay tuned for future turmoil over TADs. The City of Smyrna has allocated the majority of funds approved for the tax allocation district for the redevelopment of Jonquil Village. That has left the future redevelopment of Belmont Hills in question.
In the meantime, I recommend reading the articles from the Atlanta Business Chronicle as they provide a great overview of TADs and will help you to better understand the issues affecting the future redevelopment in Smyrna.
Study shows TADs are keeping initial promises
TAD bonds backed by future increases in property value
Lessons from a national TAD poster child
Metro school boards often hold critical TAD vote
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