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Gwinnett could move ahead with 5 TADs, an idea not as popular in Hall
Old Town Flowery Branch has been designated a tax allocation district, or TAD. Officials are hoping the TAD distinction will attract investors and developers to revitalize the area. - photo by SARA GUEVARA

Tax allocation districts have been met with lukewarm reception in Hall County, but neighboring Gwinnett County is looking to approve five.

Tax allocation districts allow local governments to target blighted areas for improvement by issuing bonds to finance infrastructure improvements that will bring new businesses. The governments essentially count on property taxes from future developments as the primary funding source.

Alfie Meek, Economic Analysis Division Director for Gwinnett County, said he thinks the county is supportive of the TADs.

The five TADs will go before the Gwinnett County Board of Commissioners in the next month, and then if approved, will be considered by the Gwinnett County School Board.

"These are areas where in the past people have contemplated and talked about doing some projects so we think there’s some good targets," Meek said. "We think these are the areas where things will happen first."

The TADs are proposed on Jimmy Carter Boulevard, Indian Trail Road and Interstate 85, Gwinnett Place Mall, West Park Place area and Lake Lucerne area.

Meek said these would be the first TADs in unincorporated Gwinnett County, though there are TADs in some of its cities such as Norcross and Lilburn.

TAD consultant Ken Bleakly said TADs can be valuable tools in times of economic downturn.

"They had as a policy that they wanted to use TAD as the incentive to encourage property owners to reinvest and redevelop their properties," Bleakly said. "Their belief is particularly given the current down cycle, they’re going to need some kind of additional incentive to make this process work in these commercial areas."

Bleakly said the biggest challenge in redevelopment is getting the sites ready to be developed with site clearance, demolition and structured parking.

"Naturally what TAD does for you is it gives you a vehicle to prime the pump a little bit and get some of those things going," Bleakly said. "A lot of communities are looking and saying, ‘Hey, if this recession ends in the next year we want to have this place ready to go so when projects come along we can move those projects forward.’"

Meek said there has been opposition to TADs in the past, though he has heard no opposition toward the five proposed TADs so far.

"People better understand now what TADs are," Meek said. "I think with the education and probably with the economy ... I haven’t seen any (opposition)."

There is a public hearing scheduled for next month.

Though no agreements have been made, the Gwinnett County School System also appears to be on board.

"We’ve kept our school board well-informed," Meek said. "They’re very supportive."

Bleakly said he thinks many school boards would favor TADs.

"In a time when state support for education is challenged and every dollar counts, they say well if I can use this technique over the next five to 10 years to grow my tax base more quickly, particularly for commercial, that’s the best way to raise new revenue," he said.

School taxes are a significant portion of tax money received in tax allocation districts.

In Hall County, where schools receive about 60 percent of property taxes, school boards have not looked so favorably at TADs.

Gainesville and Hall County school systems have both declined to participate in TADs over the last year.

The Gainesville School Board backed out of a 2006 agreement with the city of Gainesville.

Under the agreement, the school system still would get property tax revenue from the 270-acre Midtown district, but revenues above the Dec. 31, 2006, taxable value would fund redevelopment projects in the area.

The Hall County School Board has not agreed to participate in TADs in Flowery Branch or Oakwood.

Both school systems faced huge losses in revenues this year and are not willing to agree to forgo any potential revenues.

The Flowery Branch City Council voted to make "Old Town" Flowery Branch a TAD by a 3-2 margin in April.

Flowery Branch City Councilman Craig Lutz said though he favors TADs in general, he voted against this one because of how it is being implemented.

"It all is great when the economy seems to be booming and tax values are going up ... The catch is we approved our TAD right before the bottom fell out (of the economy)," Lutz said. "Now we’re kind of in a situation where the city needs revenue and we have locked in all future revenue in that area to go to pay off things in that area so it can’t be shared with other parts of the city. It’s kind of handcuffed us."