The Oakwood City Council held a public hearing Monday evening to review the boundaries, requirements and expectations for the city's first tax allocation district that would fund development of a town center.
On Sept. 18, Oakwood voters approved the referendum for the district, which is an economic tool used to spur growth and development.
Consultant Gary Mongeon of the Bleakly Advisory Group said a tax allocation district generates funds for infrastructure without increasing taxes.
He explained that the new infrastructure brings in developers and residents, raising property values.
That, in turn, increases property tax revenues.
The extra money can be used to spur development in the district after the Hall County government and school board agree to forego the difference in revenue.
"It's a way that we can encourage private development in an undeveloped area and allow the development to pay its own way," said Stan Brown, Oakwood city manager. "The idea being that the infrastructure investments would be paid for by the properties in the district and not
by the taxpayers at large."
Mongeon explained that funds from the district can be used to increase sewer service, build and maintain streets, improve water supply, build parks, control traffic, do landscaping, buy property and improve the environment.
The proposed district covers about 436 acres, including the corridor between Plainview Road and Thurmond Tanner Parkway, the corridor along Interstate 985, portions of Old Mundy Mill Road and the Wal-Mart Supercenter.
Brown said the proposed district excludes developed residential areas such as the Prestwick subdivision, Oak Crest Apartments and The Cloisters town homes.
The redevelopment plan for the 436-acre district is designed to provide the financial resources necessary to implement Hall County's vision for Oakwood as outlined in the County 2025 Comprehensive Plan. The plan aims to establish a balance in the city between urban, suburban and rural development that "will be accomplished by promoting a more compact form of growth ... with a particular emphasis on high quality commercial, industrial and business development."
Mongeon said the proposed district qualifies as a redevelopment area because, in comparison to Hall County and nearby areas, specific areas of Oakwood have experienced slower population growth and have below average household incomes. In addition, the proposed district contains a smaller portion of owner-occupied housing than nearby areas and the houses are older.
According to Mongeon's assessment, the estimated full market value of the district totals $45.8 million, with a taxable value average of less than $96,000 per acre, which Mongeon said was extremely low. He added that the area within the proposed district generates less than $360,000 per year in combined city, county and school property taxes.
But with the implementation of the district as planned by the Bleakly Advisory Group, the redevelopment area could support more than 835,000 square feet of new commercial space and more than 400 housing units in the next several years. Mongeon said this development could generate roughly $122.3 million in future private investment, along with $964,000 per year in new tax revenue to help finance capital improvements.
Ultimately, with revenue projections based on 2007 general fund property tax rates, the projected tax increment could be sufficient to finance approximately $9.95 million in future tax allocation district bonds.
Mongeon quickly added that bonds are not the only way to finance the redevelopment plan, and there are other financing options that include borrowing from a lending institution or using a "pay as you go" method.
Oakwood City Council will consider approving the city's first tax allocation district at its Monday meeting.
If approved, the district will become effective on Dec. 31, and could exist for up to 30 years.