Local officials begin planning to use new development powers

Published 11:33 pm Friday, November 14, 2014

Whitfield County voters rejected giving the county the power to create tax allocation districts (TADs) during the Nov. 4 election, but that might not prevent the county from getting involved with TADs, said Board of Commissioners Chairman Mike Babb.

Voters in Cohutta, Dalton, Tunnel Hill and Varnell approved referendums giving those cities the powers to create TADs. Voters rejected a measure that would allow the county to create TADs.

TADs are based on the idea that development in an area will increase property values. In effect, the taxes a local government can collect for general purposes inside a TAD are frozen at what the property was worth when it was created. Taxes collected on that additional value are dedicated to pay for infrastructure, land, buildings, public artwork or other amenities to attract a developer or developers to that area. That “extra” money does not go into general revenue.

Local governments can spend TAD money as it comes in, but they usually float bonds based on what they expect to receive in extra taxes. Those bonds are not general obligation bonds.

After reviewing the results of Tuesday’s election, Babb said he wasn’t clear whether TADs created by the cities would affect only city property taxes or whether the county’s maintenance and operations property tax as well.

Babb said he now has an answer.

“I’ve spoken to our county attorney, and while there is no definitive ruling from the attorney general’s office, it’s his opinion that if we sign an intergovernmental agreement with the city we can abate our taxes,” he said. “In other words, if a city has a piece of property and creates a TAD, we can sign an agreement with them that we will give the difference in our tax collections to cover the bonds.”

Babb said before the county signs any such agreements it will seek a legal ruling from the attorney general’s office.

Greater Dalton Chamber of Commerce President Brian Anderson said having the county participate in TADs can make them more attractive to developers. But he said developers could still benefit from them even if the county cannot take part.

“If you look at the typical tax bill in the city of Dalton, about 70 to 80 percent of the total bill comes from city taxes and city school taxes, so it’s still a viable option even without the county,” Anderson said. “But, yes, having the county as part of that would make it more attractive.”

In fact, Anderson said several developers have already contacted local development officials about the possibilities of TADs. He said no deals are currently on the table, but he expects something could happen “sooner rather that later.”

“We had one call the day after the election. There’s definitely interest,” he said.

Anderson said officials with the chamber and the Dalton-Whitfield Joint Development Authority will meet soon with officials in the cities to discuss how they will use TADs.

“We do expect to see some interest (in TADs), and when a developer does approach us, we need to be ready,” Anderson said. “There’s nothing quick about any of this. Let’s take the old Lee Printing site. If a developer is interested in that, we would create a redevelopment district around that. We would need to name the agency (to oversee it). We would need to make sure the city and county and city school system are in favor of it. We’d need to develop a plan and a budget and make sure the revenue was there to match that budget. Then we would advertise all that to the community.”

City Administrator Ty Ross says City Council members are scheduled to discuss what they need to do to be prepared create TADs at their work session on Monday.