The Fayette County Commission last week gave its support to the Fayetteville Tax Allocation District (TAD) redevelopment initiative. The Fayette County Board of Education did the same Monday night on a 3-1 vote.
Board members Barry Marchman, Leonard Presberg and Mary Kay Bacallao voted in favor and board member Bob Todd opposed. Chairman Marion Key was absent.
Todd said supporting the measure would be synonymous with using school system tax revenue for capital improvements of private property.
Bacallao said she wanted to support Fayetteville and its voters who passed the TAD referendum last year with nearly 70 percent of the vote.
Presberg said redevelopment in Fayetteville using a TAD would help everyone. Presberg noted that the portion of taxes to be frozen was too small to make much of a difference in the tax base.
The TAD redevelopment plan identified 132 parcels on 215.5 acres, mainly along the Ga. Highway 85 corridor. The areas on the map represent 3.68 percent of the city’s taxable digest.
An example of one of the parcels identified for redevelopment is the 692 Shopping Center on North Glynn Street, former home of the Longbranch Restaurant and other businesses. Situated on 3.9 acres with a building totaling 41,975 square feet, the parcel sold in 2001 for $1.8 million. In 2006 the fair market value had dropped to $1.747 million. In 2007 and continuing through 2011 the fair market value was $1.308 million. In 2012 had decreased to $1.166 million. Diminishing proportionately over the past few years was the amount of property taxes collected.
Now approved by the city, county and school board, the current property tax rate on those parcels will be frozen. Tax revenues will continue to be collected at the same rate each year through the 10-to-25-year term of the TAD.
Yet unknown is whether a developer might want to use the TAD mechanism to redevelop one or more of the city’s older commercial areas that continue to serve fewer tenants and dwindling customers.
If issued for larger redevelopment projects, a TAD bond is used for improvements such as site preparation and clearance, environmental remediation, infrastructure improvement and structured parking.
If all the TAD areas were developed, a $17.3 million bond is projected to attract $209.2 million in private redevelopment investment and represent a leverage ratio of $12 private dollars for every $1 covered by the bond.
Without the TAD as an incentive for redevelopment, it becomes a question of whether a developer would choose to undertake a project in one or more of the areas that continue to deteriorate and are subject to attracting fewer business tenants and their customers.
