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Flowery Branch downtown plan draws questions from county

POSTED: December 5, 2012 11:30 p.m.

Flowery Branch City Council is voting tonight on a plan to use special tax district money for downtown improvements, an effort that has raised concerns within Hall County government.

In a Nov. 21 email to Commissioner Billy Powell obtained through an open records request, County Administrator Randy Knighton addressed a question that had been raised over whether the council can use up to $225,000 in tax allocation district money to buy 2.72 acres at 5318 Railroad Ave. and 5404 Church St.

“The (state) Redevelopment Powers Law allows TAD funds to be used for the acquisition of property,” Knighton wrote. “Further, (one section) of the same law identifies real property assembly costs as acceptable redevelopment costs associated with a TAD.

“Use of TAD funds, as contemplated by Flowery Branch, is consistent with both the Redevelopment Powers Law and the city’s (intergovernmental agreement) with Hall County government.”

According to emails from the open records request, the issue appears to have started with a Nov. 19 email from former Flowery Branch Councilman and current South Hall Commissioner Craig Lutz to Knighton and Vickie Neikirk, county finance director.

In the email, Lutz asks basic questions about TAD agreements, including how the money has been spent.

The following day, Lutz sent an email to fellow commissioners, without referring to any particular city.

“In the case of the investment I have called you about, the city plans to purchase property, which will decrease the tax revenue by excluding it from the tax digest,” he wrote.

“This is why I believe it is an inappropriate use of TAD funding. I believe it is time for the county to re-evaluate our participation in these projects given the fact that the projects use mostly county property tax dollars to actually do harm to the tax digest.”

A check by The Times with Hall’s other cities that have TADs revealed that Oakwood has committed TAD money to buy property while Gainesville hasn’t.

“TAD funds have already been approved and allocated for land acquisition-related costs on our Oakwood 2030 town center project,” City Manager Stan Brown said. “The funds are committed, but not yet spent.”

Kip Padgett, Gainesville’s city manager, said that using TAD money to buy property “is not out of the realm of possibility, if there is a property of strategic importance in the development of the Midtown Greenway.”

Such a move, he added, would be “subject to TAD Advisory Committee and (City) Council’s approval.”

Lutz couldn’t be reached for comment, but he agreed through Katie Crumley, the county’s spokeswoman, to answer prepared questions. In the past year, Lutz has declined to answer questions, citing a New Year’s resolution about not speaking to The Times.

He said the “intent of the TAD is to finance the investment that is intended to increase the tax digest, and the increase of the tax digest is what pays for the TAD.”

Lutz said he doesn’t believe Flowery Branch is violating the Redevelopment Powers Act.

“They’re just not using the TAD correctly,” he said. “... I support the TAD when it’s used properly. I hope to see growth in Flowery Branch and development in the Old Town area, because, with private growth and development, the city of Flowery Branch and Hall County both win as the tax digest increases.”

Knighton also addressed Lutz’s point about a possible re-evaluation of the county’s participation.

“What this is referring to is the ‘Three Year Review’ portion of the (intergovernmental agreement),” Knighton wrote. “The review period commenced in January 2012 and is not up for consideration again until January 2015.

“If the county has intentions of withdrawing from the TAD, notice would have needed to be given as specified in (the agreement).”

The 16-page agreement, signed in September 2008, states that if the county chooses not to participate, it needs to pass a resolution “expressing its intent, which shall be delivered to the city ... within 90 days after the end of the applicable three-year period.”

Knighton also states in his email that “it is my understanding that it is $2,641 that would come off the (county) tax roll as a result of the acquisition.”

He added: “The Mooney property, which has a building scheduled for demolition, has had a couple of incidents in which the county fire department had to respond: one incident where a kid broke in and fell through the skylight and broke his pelvis (and) the second incident resulted in a fire from a car accident.”

Asked why he addressed the email only to Powell, Knighton said, “Commissioner Powell called me and asked me about the Flowery Branch TAD and how it was set up and so forth.”

Powell couldn’t be reached for comment.

Knighton and Tom Oliver, chairman of the Hall County Board of Commissioners, are members of Flowery Branch’s Tax Allocation District Advisory Council, which voted on Nov. 13 to recommend that City Council make a slate of downtown improvements using TAD money.

The council also comprises Mayor Mike Miller and council members Mary Jones and Joe Anglin, as well as City Manager Bill Andrew and City Planner James Riker.

“The county has representation on our TAD committee ... and it’s sad a county commissioner would try to undermine what the city is trying to do to grow and better ourselves,” Miller said of Lutz’s involvement in the matter. “Trying to undermine that is just ridiculous.”

In addition to buying property, the council is looking at using TAD financing of up to $152,000 for asbestos abatement, demolition and air quality testing at the old Mooney Manufacturing building at 5702 E. Main St. The plan is to turn the site into a green field.

The council also will consider spending up to $95,000 to prepare a downtown redevelopment plan.

The meeting is set to start at 6 p.m. in City Hall, 5517 Main St.


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