What is a TAD?
A tax allocation district is an area where incremental increases in property taxes resulting from new growth are reinvested in properties.
Gainesville City Council has approved new policies and procedures for the ways redevelopment projects seeking Tax Allocation District financing are evaluated and approved.
City, county and school board officials tabled three requests in August for taxpayer funding to help renovate the Lakeshore Mall, a building along Green Street for Looking Glass Surveys and for completion of phase two of the midtown multiuse trail.
Officials on the TAD Advisory Committee said they needed to identify just how long it would take to recoup their investment, as well as identify parameters and evaluation criteria for approving funding.
The committee only makes recommendations to the City Council, which must sign off on any funding.
Gainesville has two TADs — the midtown area and Lakeshore Mall — wherein increments in property taxes resulting from new growth are reinvested in properties.
The county participates in the midtown TAD, but not the Lakeshore TAD.
After establishing a baseline of property taxes owed, any increments resulting from an increase in property value are pumped into the TAD account and reinvested in improvements. But only the growth in property tax revenue is funneled to the fund.
According to the city’s website, “In simple terms, the increased property taxes that would be generated by a development’s improvements are temporarily used to fund those improvements. Once the improvements are paid for, a development’s taxes are then distributed traditionally.”
The Atlantic Station development in Atlanta is one of the more prominent examples of the use of TAD funding in the state. Proponents say TADs inspire a “halo effect,” wherein the renovation of one property spurs redevelopment elsewhere.
Critics, however, charge that TADs are an unwise use of taxpayer money that represents little more than corporate welfare.
The new policies regarding TAD funding outline the types of eligible redevelopment projects, including public works; telecommunications infrastructure; street improvements; parks improvements; transit facilities upgrades; pedestrian amenities; and site preparation.
All projects must generate sufficient tax increments to pay back the city’s debt, and should help reduce service costs, attract private investment and encourage new construction, according to the new policies.
In addition, projects that receive TAD funding must include a minimum $100,000 private investment.
All projects are subject to financial review, and applicants may be charged fees associated with securing financing.