Gainesville, Hall County and city Board of Education officials have tabled three requests for taxpayer funding to help renovate 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 Tax Allocation District Advisory Committee said they need to identify just how long it would take to recoup this funding, as well as identify parameters and evaluation criteria for approving funding.
They hope to revisit the matter in about 30 days with sharper policy guidelines to direct their votes.
Gainesville has two tax allocation districts — the midtown area and Lakeshore Mall — wherein increments in property taxes resulting from new growth are reinvested in properties.
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. 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 is one of the more prominent examples of the use of TAD funding in the state.
Proponents say TADs inspire a “halo effect,” where the renovation of one property spurs redevelopment elsewhere.
Critics, however, charge that TADs represent little more than corporate welfare.
The TAD committee meeting Thursday was the first since 2010. The lack of funding requests in recent years is reflective of the constraints placed on new development as the economy went south.
The long interval between meetings proved problematic, with officials expressing concern about approving funding requests without hard numbers on how much property taxes would increase as a result of redevelopment.
Several other questions emerged, begging answers that could not be given Thursday.
• For example, what percentage of the total project budget should TAD funds be restricted to supporting?
• Should there be requirements about the level of private investment that must be made before TAD funding is approved?
• How much should be kept in TAD fund accounts at all times?
• And with other projects likely coming down the line and seeking TAD funding, will officials be cornered into picking winners and losers?
The Gainesville City Council would have to give final approval of any funding, then sign a development agreement that would ostensibly stipulate how the funding is to be doled out, as well as mandating oversight of expenditures.
Garrison Investments Group has requested about $1.8 million in TAD funding to complete renovations of Lakeshore Mall.
That funding is part of a $21 million redevelopment of the mall, which included the demolition of vacant stores and the addition of Dick’s Sporting Goods as an anchor along with Belk, J.C. Penney and Sears.
About 70 percent of the redevelopment is complete, meaning TAD funding would essentially help reimburse some of those costs.
The property has a market value of about $8.1 million, and annual property taxes total more than $105,000.
However, city finance officials said there is currently no money in the Lakeshore TAD fund, meaning a bank loan would likely be needed to cover the funding request, with increments in property taxes generated used to pay off the debt.
The county does not participate in the Lakeshore TAD, a potential point of contention for approving any funding to help redevelop the mall.
Meanwhile, Looking Glass Surveys has requested $95,500 in midtown TAD assistance for the acquisition and renovation of the old Pure Oil gas station on Green Street.
Project costs total more than $413,000, with additional funding coming through bank financing and the developer’s own equity.
The building has a market value of about $190,000, and property taxes total $3,744 annually.
The Midtown TAD fund has more than $700,000 in its account.
But if officials approved this funding request, it could take decades to see a return on their investment.
Finally, the city of Gainesville is asking for about $419,000 in midtown TAD funding to complete the midtown multiuse trail.
The total budget for this second phase is about $1.043 million, and is supported by $500,000 in Georgia Department of Transportation funding and $125,000 in city matching funds.
This funding request differs from the other two because officials consider it a type of public works project, with the entire community standing to benefit.
However, this project would not produce any property tax revenue.