Kellin Dobbs is anxious to get going on a $15 million development planned for downtown Flowery Branch.

But he's looking at a couple of unpredictable factors - the economic downturn and the Nov. 4 statewide vote on schools helping to pay for redevelopment efforts - as he pushes along the project.

"Developments just like mine have been stifled because of the loss of the school board tax (share)," said Dobbs of Hortman & Dobbs Developers in Buford.

Government officials in Oakwood and Flowery Branch are anxiously awaiting the outcome of the vote, as school taxes would be the largest financial contributor to "tax allocation districts."

"The school increment is critical to us in creating the capital investment" for the district, said Flowery Branch City Manager Bill Andrew.

But he believes it's also an investment for the Hall County school system, which stands to reap benefits through its 1-cent sales tax program, as undeveloped areas begin to blossom commercially.

A tax allocation district is an underdeveloped or blighted area that local governments can target for improvement using property taxes from future developments as the primary funding source.

Oakwood has a plan to redevelop 436 acres, including the downtown area, Thurmon Tanner Parkway and off Mundy Mill Road.

Flowery Branch has crafted a 567-acre district, with plans to enliven its downtown district, such as through Dobbs' Old Town development, a mixture of boutiques, eateries and homes, and breathe life into vacant areas around Thurmon Tanner Parkway and Phil Niekro Boulevard.

Taxes generated by the districts would be expected to pay off bonds that would have been used up front to pay for infrastructure, such as roads, water and sewer.

To proceed with such projects, governments must first get the blessing of local voters to create the districts, which Oakwood and Flowery Branch have done. Then they must enter into agreements with all taxing authorities.

Oakwood and Flowery Branch were headed that way in February when the Georgia Supreme Court ruled that school funding in a tax district violated the state constitution's educational purpose clause.
Overnight, the cities' redevelopment plans suffered a stiff blow.

Flowery Branch had hoped to accrue $11.2 million and Oakwood $9.9 million over 25 years. More than half of those amounts would come from school funding.

The Georgia legislature passed a resolution this year to hold a statewide referendum on a constitutional amendment allowing the use of school revenues for redevelopment projects.

In the meantime, Flowery Branch and Oakwood have worked on getting agreements approved with Hall County.

And earlier this month, Oakwood rolled out its "Oakwood 2030" plans that show a vastly redeveloped town center, featuring a new city hall, amphitheater, commuter rail station and walking trails.

City officials are bracing for the worst, however, expressing concern that the referendum's wording shows the author or authors' bias against having school funding as part of the equation.

"It basically makes it sound like the schools are ... just wanting to give away money," said Oakwood City Attorney Donnie Hunt at the council's Oct. 6 meeting. "The odds of it passing probably aren't very high."

Councilman Gary Anderson said, "It's still a good deal even without the (school increment)."
If the referendum doesn't pass, "it doesn't mean we won't use (county and city increments in the district)," Oakwood City Manager Stan Brown said. "It's just that it limits the amount that would be available."

And there are other funding sources, such as the city's 1-cent sales tax allocation, with the Oakwood 2030 plan.

Brown was asked about the referendum when the city unveiled its Oakwood 2030 plans before the South Hall Business Coalition.

"I've been told I can't voice an opinion on that, but I would encourage you to get educated on that question," he told those gathered for the event.

"Don't just answer it yes or no based on what you read on the ballot. Read about it and understand what it's about."