Vote No to Redevelopment Powers Act on Tuesday November 5th

The following 'Yes or No' question will be on the ballot tomorrow:

"Shall the Act be approved which authorizes the City of Peachtree Corners to exercise all redevelopment powers granted cities under the 'Redevelopment Powers Law', as it may be amended from time to time?"

A quick recap: In 1985 the State of Georgia passed the Urban Redevelopment Powers Act (OCGA 36-41-1) authorizing local governments to issue TIF (tax increment financing) bonds to facilitate redevelopment of blighted and/ or underdeveloped areas. Basically, the city issues bonds to pay for public improvements to a designated area to help spur redevelopment. The hope is that property values in the area increase as a result of redevelopment, creating increased tax revenues. The incremental difference in the before and after tax revenues is used to pay off the bonds.

That all sounds well and good, but what if the property values don't increase enough to generate enough new revenue to pay off the bonds? Although the bonds are usually guaranteed by the developers or financial institutions, there is still a possible downside to the city. If TAD bonds default, the credit rating of the city could be downgraded making future borrowing more expensive. Because of that, some recognize a 'moral obligation' on the part of the city to make good on the bonds. There is also the very real risk that the redeveloped area creates greater demand on other municipal services, such as police and fire, schools, traffic congestion, etc, and doesn't generate enough additional revenue (after paying the bonds) to cover these extra costs. Recognizing these inherent risks, the general assembly made it a part of the state constitution that any municipality wishing to exercise these powers needed voter approval via referendum. So while it may be technically true that it is not a change to the city's charter, it is a power the city does not currently have. There are 159 counties in the state of Georgia and more than 500 cities and towns. Currently, only about 30 cities and counties are authorized to use these redevelopment powers.

The city has been promoting Redevelopment Powers using a presentation you can view here: http://www.cityofpeachtreecornersga.com/Assets/Files/Redevelopment%20Powers%20Presentation%202013.pd.... Page 10 of that presentation lists seven TADs in Gwinnett County. When asked at a recent UPCCA meeting, Peachtree Corners Director of Community Development Diana Wheeler was unable to give any information on the progress of these TADs. This past weekend, city councilwoman Jeanne Aulbach sent out an email which claimed that "Gwinnett County has successfully implemented TAD’s."

I'll have to ask Ms. Aulbach to explain her definition of successful, as I can answer the question Ms. Wheeler couldn't (or didn't want to?). According to Robert Long, Gwinnett County Director of Economic Development, in the five TAD zones declared by the county, "Gwinnett has not used any of the county-sponsored TADs to fund or use (sic) bond financing to support a project with public infrastructure."

The other TADs are located in Suwanee and Duluth. According to Denise Brinson, Director of Economic and Community Development for the city of Suwanee, "no bonds have been issued in conjunction with the TAD". In Duluth, Manager of Economic Development Chris McGahee informed me that "no TAD projects have been created." In fact, the Duluth TAD that the Peachtree Corners presentation cites as the 'Duluth-Buford Hwy Corridor' was recently cancelled by the City of Duluth because the base property values had dropped so low that a TAD became economically unfeasible. Duluth redrew the lines around their downtown area and re-issued the TAD. This is what our city leaders classify as success? No wonder Ms. Wheeler didnt want to answer the question!

I do not wish to ascribe ulterior motives to our city leaders, but based on the information coming from city hall it is apparent that either they don't understand the Redevelopment Powers Act, or they don't want us to understand it. And until we all understand it, and are confident that they do, we shouldn't vote for it.