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Lakeshore Mall pulls request for tax funds
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What exactly is a TAD?

Gainesville has two tax allocation districts — the midtown area and Lakeshore Mall — wherein increments in property taxes resulting from new growth are invested in redevelopment projects.

After establishing a baseline of property taxes owed, any increments resulting from an increase in property value is pumped into the TAD account funds 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.

Gainesville City Council approved new policies and procedures late last year for the ways redevelopment projects seeking TAD financing are evaluated and approved.

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.

Joshua Silavent

Owners of the Lakeshore Mall in Gainesville have pulled their request for nearly $2 million in tax subsidies to support ongoing renovations.

A meeting of local government officials had been scheduled for Wednesday to consider the request but was canceled.

“We’re still looking at the option to (seek subsidies),” said Ken Bleakly, president of the Bleakly Advisory Group in Atlanta who represents the mall’s owner, Garrison Investment Group. “We didn’t want to go to the meeting and not have everything all figured out.”

The funding request for the Lakeshore Mall tax allocation district was tabled by an advisory committee twice last year, first in order to establish stronger guidelines for approving requests and then because it lacked support.

Gainesville has two tax allocation districts — the midtown area and the Lakeshore Mall area — where increments in property taxes resulting from new growth are invested in redevelopment projects. It’s a finely tuned and controversial way to grow private industry with tax dollars.

County government participates in the midtown TAD, but not in the Lakeshore TAD, and that has proved to be a complicating factor.

Garrison had asked for about $1.842 million in TAD funding to help pay for continued upgrades to the mall.

The company has committed nearly $21 million to redeveloping Lakeshore, which was purchased for $6.5 million in 2010 and now features four anchor stores: Belk, J.C. Penney, Sears and Dick’s Sporting Goods. If approved, TAD funding would account for about 9 percent of the total investment.

But because the majority of the investment has already been made, county officials said they have little appetite to support the TAD funding request at this time, adding future redevelopment efforts at the mall could bring them into the fold. (The J.C. Penney store is poised for renovation at the retail company’s expense).

Before that happens, Garrison will likely have to adjust its numbers, which some county officials said painted too rosy a picture.

Garrison projects the recent and ongoing improvements will grow property taxes on the mall to about $340,000 from about $107,000.

But that figure is based on an assessed property value of $28 million, even though the current building and land value totals just $13.3 million.

“I don’t see it, in a couple of years, doubling,” said Hall County Commissioner Jeff Stowe. “So your assumptions and your math are a little off.”

Proponents of TADs say they inspire a “halo effect,” with renovations of one property leading to redevelopment elsewhere.

Tim Evans, vice president of economic development at the Greater Hall Chamber of Commerce and a member of the TAD advisory committee, said TADs encourage additional investment and result in job growth, and that future renovations at the mall could prompt tax-based funding.

“I think we’re certainly open to it,” he added. “We didn’t think it was reasonable to assume or base TAD investment in the project based on that number today.”

Critics, however, are suspicious of subsidizing corporations to the tune of millions of dollars.

“So why don’t I do a TAD for the Gainesville Times?” said Hall County Commissioner Scott Gibbs. “I’ll do a TAD so y’all can put in a new press.”

Gibbs said while he supports using tax dollars to spur economic development on vacant properties in Gainesville’s midtown area, doing the same for the mall is too costly to local governments that rely on property taxes to pay their bills.

“Lakeshore Mall is there,” he added. “It’s an existing building that’s up and running and collecting rent. I don’t think that’s what the TADs were ever meant for.

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