If approved, it would give the city the ability to create tax allocation districts (TADs), which are used to assist in the financing of a blighted area or under-developed area of a city.
"I knew there would be some immediate interest," said Mayor Mike Mason in his opening statements acknowledging that some residents would be concerned that it would grant additional powers to city leaders.
"This has nothing to do with the three city services," said the city's Community Development Director Diana Wheeler as she explained its purpose.
The name, redevelopment powers conjures up images of unfettered power by city leaders acknowledged Wheeler. "But it's a financing mechanism, that's all it is," she explained. "It's a Georgia law enacted almost 30 years ago to help cities finance areas that needed to be redeveloped."
A few fast facts about redevelopment powers:
1. The Georgia Redevelopment Powers law was enacted in 1985 to help with the redevelopment of undeveloped, under-developed and economically depressed areas.
2. The law authorizes the use of tax allocation bonds to finance infrastructure such as parking garages, public plazas and town squares within a tax allocation district (TAD).
3. Redevelopment Powers are not new. Voters in over 30 cities in the state have approved the law including Alpharetta, Marietta, Kennesaw, Duluth and Roswell.
Wheeler provided the following example on how TADs work:
- Say the property taxes on a vacant piece of property are $10,000 per year.
- Then the property is developed and the taxes on the improved property is $100,000 per year.
- If the property is part of a TAD, the property taxes are frozen at the vacant land rate ($10,000 per year).
- After the land is developed, the property owner pays the improved property rate ($100,000).
- However, the $90,000 difference between the $10,000 and $100,000 in property taxes is kept in a separate account and pledged (over a period of 20 years) toward improvements to a specific project.
However, one citizens urged that the city use caution moving forward. Ali Stinson, who spoke during the public comment period, was concerned that the referendum would come before voters in an off year when voter turnout is generally lower.
"We need maximum voter turnout," said Stinson who said that referendums should only be placed on the ballot on "major voting years."
The law requires that citizens decide by referendum vote whether to approve the redevelopment powers for the city.
"It's an excellent tool," said Wheeler. "It allows TAD funds to pay for public improvements that would otherwise not get built. We owe it to our community to try."