The Atlanta Journal-Constitution
Beltline needs cash, so new tax targets must pay
The Atlanta Beltline will run short of money before completing the full 22-mile loop by 2030, the planned end-on date.
That means someone must pay to make up the shortfall. And that would be shopkeepers, commercial and industrial property owners, and apartment-dwellers within a halfmile of the Beltline.
On Monday, the Atlanta City Council will almost assuredly pass a $100 million tax to finish up the popular concrete ribbon. The new funding source is called a Special Service District (SSD), a targeted tax area in which a 2-mill real estate tax increase will be levied on the entities named above.
City and Beltline officials say this new tax won’t be that terrible.
About half of the 3,555 properties affected — 2,945 commercial and industrial parcels and 610 apartment buildings — will pay an additional $250 a year or less, according to the Beltline’s website. I quote the Beltline’s website because its flesh-and-blood execs sometimes get shy about talking to the press.
The Beltline’s webmaster looked at an apartment complex and said it would cost residents there about $13 more a month in rent if the landlords “chose to pass that on to their
tenants.” Something tells me they will.
The Beltline continued its sales job, saying “this short-term tax increase from the SSD will result in long-term mobility benefits and equity to make sure the Beltline reaches all the neighborhoods located around the 22-mile trail loop.”
The “short term” tax could go on as long as 30 years. Atlanta Councilman Matt Westmoreland, who is shepherding this for the City Council, said he covered the Beltline’s creation in 2005 for the Grady High School newspaper. This tax could end when he’s a grandpa.
Single-family homeowners who live near the Beltline and enjoy the path, as well as their rising home values, will be left out of having to pay the new tax for obvious reasons: This is an election year and City Council members are not stupid when it comes to getting themselves re-elected. They know that nobody complains, and votes, like single-family homeowners.
Beltline officials estimate that it’ll take $350 million to finish the grand loop. So far, 7 miles have been completed with 15 miles left to go. They figure the SSD tax will raise $100 million, the existing Tax Allocation District (I’ll explain what a TAD is later) will raise $100 million, philanthropists will kick in $100 million, and the state and feds will pony up $50 million. This would not include the cost of whatever transit may be built along the line.
Those are very suspiciously and perfectly round numbers. I say “suspiciously” because city officials were off by more than $1 billion in their original estimates of what the TAD would ultimately raise. A TAD is a zone where property tax collections are frozen, and future increases in property values — and the ensuing increases in taxes — are used to fund improvements in that area.
In 2005, the city acknowledged that estimating future dollars is tricky. The ordinance setting up this tax scheme noted that “the city recognizes that the Beltline is a long-term, complex project.”
There have been several road bumps for the Beltline. There was a lawsuit that halted its implementation for a while; there was a Great Recession; and also the Atlanta School District wanted more of the increased real estate tax money along the Beltline that the TAD was taking away.
I must note here that in the next decade, officials estimate that just $100 million of TAD funding will go to finishing the Beltline trail. That seemed strange to me, because the TAD brings in about $50 million a year and is expected to raise $307 million more in the next five years alone.
But, that $307 million coming in is merely the gross. Once you pay off debt service for old bonds that have been issued and the schools and other expenses, that $307 million just ain’t what it was.
Hence, the need for the new funding source.
The problem with the Beltline is that it wasn’t built all at once, which of course would have been impossible. A stretch near Piedmont Park was completed first to give the public a taste of what could be. Now people in other parts of the city, especially northwest of downtown, are tired of waiting for their chunk.
“I am loath to support another blank check for the Atlanta Beltline; after 16 years they have not even begun to put money into our area,” Renee Wright, a member of the Blandtown Neighborhood Association, told a City Council committee. “The west side of the Beltline has supported the east side of the Beltline for a decade.”
Jim Martin, who heads the Neighborhood Planning Unit in that area, said in an interview that “our complaint is we’ve been dead last on the priority list from the beginning.”
He, like many others, asked the council to slow down on the effort, one that was made public in January and is expected to be OK’d Monday. By comparison, the city’s new tree ordinance has been debated long enough for an oak to get two or three rings around the trunk.
“They have seemed to go out of their way to not be public,” Martin said. “The meetings haven’t been public and haven’t even been meetings.”
Property- and business-owners also have complained, saying a tax hike during a pandemic that has crippled many businesses borders on heartlessness.
Some, like Scott Pendergrast, one of the owners of the old theater that houses Variety Playhouse in Little Five Points, said his property sits more than a half-mile from the Beltline and gets little to no benefit from it.
He told the council his building pays $33,000 in real estate taxes each year, with $7,775 going to the city. With the new tax, he’d be paying $1,900 more in taxes. (Actually, his figuring was based on a higher rate the city had considered. It would now probably be more like a $1,500 increase.)
The business, one that cannot effectively practice social distancing, has been shut down for a year, Pendergrast said.
Councilwoman Natalyn Archibong said the plan seems to be tone deaf. “We have a federal government passing a $1.9 trillion bill trying to help small businesses. At the same time, in the city of Atlanta, we’re considering imposing an additional tax that will impact businesses in ways that we don’t know.”
Beltline CEO Clyde Higgs told the council the plan was desperately needed, otherwise they’ll be “in danger of not completing it by 2030.”
Archibong asked Higgs how long this plan has been cooking. He told her that once they had “significant support from the property-owners,” Beltline officials talked to council members and the mayor. “Then we felt it was really in motion,” he said.
The councilwoman suggested it might have been the other way around.
“One of the questions I asked, and it still disturbs me, was, ‘How many business associations or small groups of entrepreneurs have you engaged in this process?’ And the answer was, ‘None, can you help identify where they are?’ That’s very disturbing,” Archibong said.
“I appreciate your topdown perspective. You have your eight votes,” she noted, referring to the council votes needed to push the tax plan through.
“But at a granular level, in the middle of a pandemic, I’m concerned,” the councilwoman warned.