Official: Private sector seeks changes to TAD policy
by Jon Gillooly
February 23, 2013 12:00 AM | 1751 views | 0 0 comments | 3 3 recommendations | email to a friend | print
SOUTH COBB — Sam Olens has only been gone from the Cobb Board of Commissioners a few years, but the county staff he left behind is already trying to alter the strict guidelines he put in place for using tax allocation district subsidies for developers.

The topic arose on Friday, when Dana Johnson, the county’s planning division manager, told the South Cobb Redevelopment Authority that the private sector didn’t approve of the county’s TAD policy.

A tax allocation district is an incentive for developers to build in blighted areas to increase property values. TAD subsidies involve freezing the tax value of the subsidized property, with taxes at the existing valuation continuing to go to local jurisdictions — but any new taxes generated by the presumably higher valuation after redevelopment — called “the increment” — going to pay off the development bonds.

The private sector would rather see the county have a policy that allows “area-wide” TADs rather than the “project specific” TADs the county’s policy currently calls for, Johnson said.

The former allows for multiple developments to be built in a particular set of boundaries while the latter is tied to a single project.

“The first step is to amend our policy because what we’ve received from the private sector is that our existing policy as it is right now isn’t really an incentive that’s going to drive redevelopment because it’s too outside of the norm or it doesn’t really do the job of what the purpose of a tax allocation district financing is,” Johnson told the Authority. “So based upon that advice, we think it’s probably beneficial to get our policy altered first and once we have that policy alternated then we can actually pursue an area TAD if that’s the way the board considers.”

The Authority voted unanimously to ask the Board of Commissioners to consider revising the TAD policy.

Prior to his election as state attorney general, when Olens was county chairman he limited the use of TADs to specific sites so that the Board of Commissioners would know exactly the kind of project that was being developed.

The alternative, as critics pointed out at the time, was “buying a proverbial pig in a poke.”

“The history of TADs has been contentious to say the least, and I think it behooves us to get this right,” Authority member Robin Meyer said.

The use of TADs became particularly controversial under the administration of former Marietta Mayor Bill Dunaway, prompting Smyrna Mayor Max Bacon to say the city of Marietta had given TADs a bad name for all governments. The use of TADs has also given members of the Cobb Board of Education heartburn from time to time since TADs divert education taxes to the development in question. Former Cobb school board member Johnny Johnson once referred to TADs as “a golden egg” the government gives developers.

Dana Johnson declined to answer questions after Friday’s authority meeting.

Michael Hughes, the county’s economic development director, responded to questions about who from the private sector was telling the county its TAD policy wasn’t working.

Hughes mentioned the names of Sharon Gay and Steven Labovitz, attorneys with McKenna Long & Aldridge.

Gay and Labovitz were the two attorneys Dunaway brought in for a seminar in order to promote the use of TADs when he was mayor.

Meyer said after the meeting that the last effort to form a TAD in Mableton was about eight years ago, although it never came to fruition.

“I think any economic incentive to a private party on the part of government is necessarily and properly subject to a great deal of scrutiny, and so just the word ‘TAD’ in some corners in this county evokes an immediate negative response, and in some cases it’s because just the impression of what has transpired – they don’t necessarily know the details – and in some cases it’s because the experience actually was bad,” Meyer said.

That’s why it’s important to learn from the past, she said.

“If we have impressions of what transpired before we need to understand what transpired before,” she said. “I’m trained as an archivist. Over the doors of the National Archives is ‘the past is prologue.’ OK. So let’s read the prologue before chapter one.”
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