$1.4B Economic Corridor Plan unveiled
December 2, 2018, by James Swift
Bartow County got its first glimpse of a pro- posed tax allocation district (TAD) in and around Emerson Wednesday morning, as plans for the $1.4 billion Etowah-Allatoona Economic Corridor were revealed to the public.
The plans largely revolve around two major pro- posed economic developments — a 1,000 acre- plus commercial and residential mixed-use site, called Etowah Highlands, and a revamped Allatoona Landing project with 30,000 square feet of retail and 200 vacation rental units.
The Etowah Highlands project would be con- structed atop the old Page Mine property, abutting the Etowah River to the north and Red Top Mountain Road to the south. Plans for that development
include 900 single family units, 2,100 active adult facility units, 300 town homes and 75,000 square feet of medical office. The completed development is projected to top out at around 3,700 residential units and 565,000 square feet of commercial and residential property.
The Allatoona Landing project would include a 100-key hotel, 500 marina expansion slips and an 8,000-square-foot amphitheatre.
The plan was presented as part of a public hearing concerning a resolution to authorize a TAD “down around the proposed Jacoby development at Page Mine Road,” said Bartow County Administrator Peter Olson.
Jim Jacoby, the Atlanta-based real estate developer referenced by Olson, hasn’t been secretive
about his plans for Bartow County. Earlier this year his company Ja- coby Development Inc. announced plans to construct Villages at Red Top, a mixed-use project that would include 2,000 residential units and as much as one million square feet of retail and commercial properties.
Subsequent project documents detailed plans for a massive, 1,500- acre development broken up into three main areas — Downtown Etowah, Lakeside Village and The Highlands. Other components of the project include a river walk amenity and a commercial district modelled after famous downtowns from all over the country, including homages to New Orleans’ Bourbon Street and Memphis’ Beale Street.
While Olson said Jacoby was the one who came to Bartow officials with the TAD proposal, the county administrator said no for- mal agreements have been made yet with any developer for the properties included in the Etowah- Allatoona Economic Corridor.
But what is presented in the re- development plan does reflect “the generalized plan” Jacoby has dis- cussed with the county, Olson said.
“Trying to redevelop the Allatoona marina into an entertainment hotel/complex, the notion of redeveloping the Paga Mine property into a mixed-use retail/commercial district with some residential … it’s been all very high-level discussion,” he said. “They’ve been talking to, I know, big national developers, so once they get the partners they know they want in place, then they’ll sit down with us, in a great deal more detail, and they’ll get into the specifics of what we might be willing to use TAD funding for.”
At the moment, the county has no hard numbers on how much Ja- coby might invest in the community, nor a development timetable.
“The importance of getting this done by Dec. 31 is the TAD’s got an annual cycle, so either you create it effective this December or you’ve kicked it a year to Dec. 31 next year,” Olson said. “We want to go ahead and get it done, but whether or not Mr. Jacoby will get all of his financing lined up and all the hundreds of millions he’s looking at doing, we’ll just have to see.”
Geoff Koski, president of Atlanta-based consulting firm Bleakly Advisory Group, prepared the redevelopment plan for Bartow County’s government.
“The projects that are mentioned in here are really hypothetical,” he said. “The idea is that this really could be a step forward for the county, being able to provide a 21st century mixed-use district — single-family housing, a retail core, and the TAD allows this to happen because of the infrastructure costs that are needed there.”
Sharon Gay, managing partner of the Atlanta office for global law firm Dentons, explained the technicalities behind the TAD authorization.
“What that gives the county the power to do is to prepare redevelopment plans, to determine if there’s an area in need of redevelopment that meets one of the criteria in the code,” she said. “The way a TAD works is what we call the base value, the value of the property tax digest that exists today within that redevelopment area, is
certified by the state revenue commissioner as the base value … So the county will continue to receive revenue on that base value for the life of the TAD, and if the board of education chooses to consent, they can consent to include their share of the new increment in the TAD, and they’ll continue to receive the property taxes on that base value, so nobody gives up a dime that they’re getting today.”
In essence, she said the TAD would pay off the upfront costs of redevelopment — such as infra- structure building, utilities installations and environmental remediation — in order to spur “vertical” residential and commercial investments.
“Right now the county’s getting about $85,000 a year in taxes from this proposed redevelopment area, and the county would continue to get that $85,000 through the life of the TAD,” she said. “The idea of the increment is that once this tool is unleashed, the new development, the new value that’s created as a result of redevelopment within the designated area, would generate new property tax revenue. That money will flow into a separate fund — literally the tax commissioner will separate it all and send the county two checks, one for the general fund and one for the special fund.”
Only a small percentage of the total redevelopment project would be financed through TAD funds, she said. The majority would still come from developers, lenders, investors and other private sector sources.
The TAD designation, she continued, is not a “tax freeze” or “tax abatement.”
“Typically what we do is issue tax allocation bonds, so that increment pays for the debt service on those bonds until the bonds are paid and the redevelopment costs are completed,” she said. “And at that point, the TAD is dissolved by the county and all that new revenue would then flow back to the county and then if the school board consents, to the board of education.”
While Bartow County would have the ability to issue bonds for redevelopment projects within the proposed economic corridor, Gay said officials would also have a “pay-as-you-go” option, similar to what officials in Augusta chose to draw a major business investment to the area.
“They had a big manufacturing facility that came in and they entered into an agreement, ‘OK, manufacturer, you get the benefit of your share of the increment every year for a certain period of time,’” she said.
The proposed economic corridor includes 32 parcels totalling 1,497.74 total acres. According to Bartow County Board of Assessors data, the current combined fair market value is about $25.6 mil- lion.
“Today, there is less than $300,000 in real estate taxes and personal property taxes being collected out of this property,” Koski said. “If the property were to realize the vision laid out in this plan, that increment could grow to about $16 million a year … that’s what’s going to potentially be pledged to pay off the bonds.”
Per Koski’s redevelopment plan projections, the estimated value of the “private investment in Etowah and Allatoona” in the project would surpass $1.42 billion and in- crease the taxable digest value of the area from $10.2 million to $523 million.
“This would result in approximately $16.7 million in new real estate and personal property tax receipts when Etowah Highlands and Allatoona Landing are fully built- out,” the proposed redevelopment planning document reads. “The proposed commercial mixed-use development at Etowah Highlands and Allatoona Landing will create more than 1,894 new jobs with an annual payroll of $68 million.”
As for the monetary amount of a potential TAD bond, Koski estimated a total of $171 million in bond debt could be issued “over a likely series of financings,” with the total potential proceeds avail- able to a developer hitting $129 million at build-out.
Concerning estimated TAD expenses, Koski projected $28 mil- lion going toward utilities, $20 million going towards structured parking and $12.8 million going towards traffic enhancements and intersection improvements. About $25 million is allocated to “other project-specific economic development purposes,” comprising about one-fifth of total TAD proceeds expenditures.
Olson, however, said he does not see Bartow County “going to the maximum” on that bond request.
“The investment from the public ought to be 5 percent or 10 percent of the whole investment, so if they’re going to put $200 million in capital investments, maybe $15 million or $20 million to go into the roads and that sort of thing — that ratio feels more appropriate to me,” he said. “We don’t want to be a third of the investment or more coming off the public funds. It needs to be just the bug-for amount … if they truly invested over $1 billion, you might consider getting up towards that number over the course of many years, but that’s a lot, I guess, to accept upfront.”
Ultimately, Olson said he’s sceptical that any developer would land in Bartow and spend $1 billion over the course of just three- to-five years. “It might take 10 or more years to spend that kind of money,” he said. “Lakepoint talked about a $1 billion investment, too, but here we are several years in and it’s been more like $130 million.”
One Bartow County School, South Central Middle, is included in the proposed economic corridor. Per a school district impact analysis, Bleakly Advisory Group anticipates the TAD affecting 0.5 percent of the school district’s tax digest and adding about 480 new students over a “multi-year build- out” of Etowah Highlands development.
By 2030, Koski said the TAD should generate about $2.5 million annually for the school district in the form of increased real estate, personal property and ESPLOST tax revenues.
Neither the county or Bleakly Advisory Group anticipates any residential, commercial or business structures currently within the corridor being removed to allow redevelopment.
“At this time, it appears that no existing residencies or businesses will need to be relocated,” the planning document reads. “How- ever, if it any time in the life of [the TAD] relocation of any residences or businesses is required, relocation expenses may be provided for under all applicable federal, state and local guidelines.”
Olson reaffirmed the Bleakly re- port, stating the county would not invoke eminent domain to facilitate development in the corridor.
“I don’t think the commissioner would have interest in displacing people,” he said. “He would prob- ably just tell the developer ‘Make the deal with them and buy them out.’ We’re not interested in doing condemnation to benefit private development.”
Koski said property owners in the economic corridor should see “zero impact” to their current property tax bills. And he noted that, pending no agreements have been signed, the county does have the ability to suspend the TAD at any time.
“As long as there hasn’t been any bond issues, as long as there’s not any outstanding debt that is as- sociated with the TAD, at some point in the future you could choose to eliminate the TAD and just say ‘It’s not working out for us,’” he said. “And if there is increment in the TAD fund at that point, it just gets distributed back into the general funds, and if the schools were to participate, their funds get distributed back to them.”
Olson said the proposal is com- parable to the county’s investment in the Highland 75 industrial park, in which officials borrowed money to build infrastructure and used SPLOST and other revenue sources to pay back the debt once developments began.
“This is not a tax abatement, this is a different tool to try to encourage development,” he said. “We’re not putting upfront money in, we’ re borrowing against the investment that the private developer will make if the development comes. The development itself basically funds the infrastructure and makes the property more valuable to develop.”
Major developments have been proposed in the vicinity before — including the planned $750-mil- lion Avatron Smart Park — yet thus far nothing has come to fruition at the old ochre and barite mining site.
Moving forward with the TAD, Olson said the county is being very strategic and selective about what will be constructed within the corridor.
“We haven’t agreed to anything and we want to be cautious that we treat the public’s money properly and we don’t go out on a limb and we have a good investment. There have been other major plans for that property that have fallen through and there have been other people talking about different things that haven’t worked out,” he said. “We can get residential development without having to put all of that kind of public money in. The more interesting and valuable part of it that generates sales tax and generates property tax and generates jobs, that would be the retail/commercial/office stuff. That’s what we’d really like to start seeing, white collar office-type jobs with higher wages coming to the community — we think that would be good for everything.”
Bartow County Commissioner Steve Taylor will approve or deny the TAD resolution at a public hearing, scheduled Dec. 5 at 10 a.m. at the Frank Moore Administration and Judicial Centre at 135 West Cherokee Ave. in Cartersville.
As Gay noted, Taylor will only be making a decision regarding the adoption of the redevelopment plan and the authorisation to create the proposed TAD. “Any future decisions to actually finance projects would be done in a separate process at a future date,” she said.