Park Place area update from Mary Koponen 21-NOV-2008

From SummertownWiki

From Mary Koponen, Summertown HOA rep

[edit] Update on fundraisers

Mary Kay fundraiser: Two orders raised $24. Not too late to order today by replying to this email! (300 samples & fliers were passed out) 5 donations totaling roughly $80 were made in lieu of an order. The fundraiser was done in response to meeting suggestions that the Homeowner's Assoc. attempt more fundraisers. (PS. Of the few that have sent in additional donations, unfortunately it's mainly the same group of original donors/members who keep sending more. Three out of four homes have sent zero front entrance or other dues/donations to our HOA in 2008).

[edit] Security correction to my previous email

My previous statement that Park Place was starting a security force was incorrect. Evermore CID has hired Plaza Security to patrol the entire CID corridor. Patrols will be doubled during the holiday season. In addition, Evermore is planning a Security Task Force to facilitate communication between CID security & private security patrolling individual properties, and governmental agencies. If you have a business along Hwy 78 or are interested in getting involved, contact Valerie Blalock at 770-979-5800 or vblalock@evermorecid.org. New residents, FYI: The area undergoing improvements along Hwy 78 between Park Place and Snellville is called a CID (Community Improvement District), and the entire corridor has been renamed Evermore with the oak leaf symbol. Visit http://www.78cid.org/index.htm to read up on projects.

[edit] You might be living next to a TAD in the future; Explanation of how a TAD can improve property values.

What is a tax allocation district? Typically the counties designate TADS for the older, commercial/office areas that have high vacancy rates. By law, a tax allocation district may contain all types of properties not limited to commercial; however, in Gwinnett a TAD typically does not include outlying residential areas. The purpose of a TAD is to create an incentive for builders to redevelop blighted areas, rather than clearing forested lots & building 'new' developments which tend to worsen conditions at the older areas.

The TAD process: When a blighted area becomes a TAD, all property tax amounts are noted and considered a 'baseline' level. Next TAD bonds are issued to pay for infrastructure improvements which might include sewer, streets, utility lines, or removal of old buildings and structures. As the buildings are revamped and/or re-built, property values in the TAD go up, and so do property taxes. The bonds are gradually paid off from the increase in property taxes over the baseline level. As taxes are collected, schools and county still collect at baseline level - as if no revitalization had taken place - for as long as it takes to pay off the TAD bonds. Once the bonds are paid, the county and schools receive additional revenues over and above the baseline amount. Once the TAD boundaries are set, then specific TAD projects will still have to be approved by the County and School system on a case-by-case basis prior to any bonds being issued. Therefore, if a project did include too many homes, for example, the school could vote against including their portion of the tax revenue into the TAD bonds. TADs in many cases actually give schools greater say in rezoning and development than they've typically had in the past.

The TAD amendment was on the Nov. 4 ballot because the GA Supreme Court had determined TADs were unconstitutional based on the (now amended) law which stated all property tax revenue must go towards schools. If not for TAD assistance, revitalization would not be feasible because the risk is too great for a developer to take on a single property. Without a TAD incentive, developers would continue to choose "safer" options of developing new malls, leaving old properties to decline. TADs reduce the risk to developers and stimulate the redevelopment process without posing a risk to taxpayers.

Written by Mary Koponen with assistance from Brett Harrell

I (Mary) asked Brett Harrell, Hwy 78 (Evermore) CID manager the following questions: 1. What happens if a TAD fails and no one rents/moves in? Answer: If a TAD fails, the bond holders ONLY bear the risk of loss. TAD bonds are NOT an obligation of the Government or School system so the failure and loss does not fall back on taxpayers. Because the bonds are not backed by the good faith and credit of the government, they carry a higher interest rate and the bond buyers accept this higher risk for the higher interest rate.

2. If property taxes don't go up, is the TAD considered a failure? Who pays the bonds if there would be no increase in property taxes? Brett's answer: Lets look at this question step by step using the former Cub Food site as an example: The Cub food property is 11.2 acres zoned C-2 with a 63,000 sq ft empty building. The taxable value $1,157,370 this year and generates $12,731 to the County and $22,279 to the School system. That amount would be the baseline and every year the County and Schools would continue to collect the total $35,010 on the Cub food site. However, if we could get a new developer to revitalize the property it may look like this: Using the Publix shopping center at the corner of Killian Hill as a similar piece of property: 11.44 acres zoned C-2 with a 109,000 sq ft shopping center. The taxable value is $6,360,000. So, if the Cub were just revitalized as an operating retail center like Publix and nothing more: The County and School would continue to receive $35,010 and the additional increase in value would generate an additional $57,229/yr County and $100,151/yr School revenue to pay-off the bonds needed to do the deal. Once the bonds are paid, the County and School would receive the full value of the increased taxes or a total amount of $192,390 compared to $35,010 today.

3. What if the project stalls in the construction phase? Brett's answer: O.K. Here are some scenerios: We put together the financial package, getting guarantees of equity from the developer and other financing secured. The TAD Bonds are the very last part of the financing package and Gwinnett County will not consider a TAD bonded project unless all other financing and equity are already in place. Everything looks good, issue the bonds. Now you have cash in hand that includes the equity, bank financing, and bond proceeds. With all this cash up front, you start your project. You tear down the Cub building and do nothing more project fails. OK, whatever cash remains goes to the bond holders first, then if any left the bank, then if any left the original investors. The taxpayers pay nothing and if not enough money left the investors and bond buyers have a loss. The community still has a vacant 11 acres site, but without the ugly building attracting dumping, graffiti, etc. County and Schools still collect the $35,010 per year same as today.

Tear down building, put in sewer, and build a road improvement then project fails. OK, any money left goes back to investors and when the money runs out investors lose money. Taxpayers pay nothing and the community is left with a vacant 11 acre site, with no ugly building, with new sewer line and street. Now the next buyer has a much more attractive site price has probably increased already. County and Schools still collect the $35,010 per year same as today.

Developer builds everything but no one moves in. No money left, investors and bond holders lose everything. Taxpayers pay nothing and community has an 11 acre site with new building, new sewer, and new street. Tax value has increased and the property is more attractive to next buyer. County and Schools still collect the $35,010 per year same as today.

Bottom line: TADs are a bit complex, but they are basically just a financing mechanism to encourage development in projects with greater risk (redevelopment). Taxpayers, county, and schools are not on the hook for the bonds if they fail. County and Schools continue to receive current revenues unchanged and receive greater future revenues when bonds paid off. TADs do not abate taxes for anyone, TADs do not increase taxes on anyone, TADs do not take money away from our kids and schools and may in fact accelerate collection of school revenues. Sorry to be so long winded. Thank you for asking and giving me an opportunity to offer my take on TADs.

Thanks again, Brett