First BeltLine Bonds Sold
November 14, 2008
Atlanta Development Authority News
First BeltLine Bonds Sold
On October 31, the City of Atlanta closed on a private placement of BeltLine Tax Allocation District (TAD) bonds worth $64.5 million, slightly more than half (54 percent) of the original bond authorization approved by City Council in August 2008. Two local institutions, Wachovia Bank and SunTrust Bank, each purchased $32.25 million in bonds.
Consistent with the City Council-approved bond allocation, fifteen percent of the net proceeds, approximately $8.8 million, will capitalize the BeltLine Affordable Housing Trust Fund, and another portion will be allocated to the Economic Development Fund. The remainder of the net proceeds will cover transit-related property acquisitions, including the full repayment of the debt on the Northeast Corridor property, working capital and bond issuance expenses.
“This is yet another milestone for the BeltLine which will preserve and add to the project’s momentum,” said Terri Y. Montague, president and CEO of Atlanta BeltLine, Inc.
“We are grateful that Wachovia and SunTrust, two longtime financial partners of the City of Atlanta, have demonstrated their confidence in the BeltLine by investing in these bonds,” said Valarie Wilson, executive director of the BeltLine Partnership. “We are also thankful for the City Council’s crucial and continued support for this historic and visionary project.”
The bond financing includes a provision to refinance the bonds on or after July 1, 2009. The city plans to issue the remainder of the $120 million bond authorization at the time of the subsequent bond refinancing or when market conditions become more favorable.
While the Atlanta City Council initially approved a bond sale of $120 million for the BeltLine TAD in August 2008, the global financial crisis and the lack of activity in the municipal bond market delayed the city’s ability to issue these bonds, along with several other bond sales. By proceeding with a smaller bond sale at this time, the project met the deadline of October 31 to finalize the acquisition of the Northeast Corridor property. It also satisfied a provision of the Fulton County Consent Resolution, which mandates that BeltLine TAD bonds must
be issued before the end of 2008 to ensure Fulton County’s participation in the TAD.
The Atlanta BeltLine is a $2.8-billion redevelopment project that will shape the way Atlanta grows over the next 25 years and beyond. The project proposes a network of public parks, multi-use trails and transit along a historic 22-mile railroad corridor circling downtown and connecting many neighborhoods directly to each other by streetcar or light rail. The BeltLine is the most comprehensive economic development effort ever undertaken in the City of Atlanta and the largest, most wide-ranging urban redevelopment currently underway in the United States.
For more information about the BeltLine, visit www.beltline.org.
Georgia Voters Say ‘Yes’ To TADs
On November 4, the voters of Georgia affirmed tax allocation districts as a tool for local jurisdictions to attract economic development in the state of Georgia. In supporting Amendment 2 to the Georgia Constitution, which passed with 51.5 percent of the vote, Georgians moved forward in preserving a school district’s option to participate in TADs in Georgia.
The next step in the process will be asking the Georgia General Assembly to re-enact the Georgia Redevelopment Powers Law in the next legislative session.
Support for the use of TADs in community redevelopment came from voters not just in metro Atlanta, but from all across the state, in places such as Albany, Valdosta, Savannah, Augusta, Columbus and Macon. This vote isn’t the first time Georgia’s voters have championed community redevelopment. Seventy-one percent of Georgians backed the use of TADs through their support of the Georgia Redevelopment Powers Law, enacted in 1985. This legislation was enacted with the intent of allowing cities, counties and schools to invest future tax revenue for redevelopment purposes.
TADs are a national best practice. Atlanta’s first TAD was created in 1992 around what is now Centennial Olympic Park. This tool has since helped finance Atlantic Station and the renovation of the Ellis Hotel, and revitalized the areas around CNN Center, Georgia State University and Auburn Avenue. Camp Creek Marketplace, just west of Hartsfield-Jackson Atlanta International Airport, would not have been possible without public financial support of new infrastructure for commercial development and residential subdivisions in Princeton Lakes.
It is expected that with the re-enactment of the Redevelopment Powers Law, TADs can be restored to their full effectiveness, as before the Georgia Supreme Court ruling in February 2008 that prohibited school district participation. Redevelopment in areas suffering from disinvestment will once again be within reach. Atlantans will experience the many benefits of TADs through the creation of more walkable urban places, more affordable housing options and an improved and sustainable quality of life in these areas. The local economy will receive a boost from the jobs created and investment attracted by the TADs. Perhaps most important, Atlanta Public Schools and families with school-age children will see the neighborhoods and schools within and near the tax districts improve and stabilize.
For more information about TADs in Atlanta, visit www.atlantada.com.