Locals to vote yea or nay in November on issue, but what are TADs exactly?

BY ALAN RIQUELMY

Election to decide fate of TADs

Columbus is on track for a special election this fall that will decide if the city will get the power to create Tax Allocation Districts.

The Muscogee County Board of Elections and Registrations voted unanimously Tuesday to call for the Nov. 6 referendum. The most recent step in a procedural dance, Columbus has already gotten legislation from the state allowing it to call for the referendum. Councilors voted in May to authorize Tuesday's vote by the elections board.

Columbus State University has the task of educating the public about TADs, which is tentatively slated to begin mid-September.

"I think they've got a training job to do," chairman Walter Wright said.

Nancy Boren, executive director of the elections office, said she expects less than 20 percent of registered voters will go to the polls in November.

Columbus will spend $85,000 to hold an election this November on one question: Should the city have the power to create Tax Allocation Districts?

How does a government educate its constituents in five months about an issue that involves millions of dollars, public and private partnerships and phrases like "tax increment financing?"

Get a pair of scissors. This one's a clip-and-save.

TADs are special districts where future property taxes are used as collateral. Borrow the money now, use it to redevelop the district and pay back the money with future tax gained from the new properties.

It could be the railroad yards underneath the 13th Street Viaduct, transformed into a series of retail shops with a hotel. It could be a housing project that's relocated so the land can be used for a different purpose. There will have to be a plan and the cooperation of the city and school board before a TAD can become reality, but if it does occur, proponents claim it can be the best incentive cities have in their toolbox to bring in development.

"Basically, it's a very simple idea," said Kenneth Bleakly, president of the Bleakly Advisory Group.

When a TAD is made, a baseline of existing tax revenue is created. The city and school board will continue to get that amount of money from those properties each year.

TAD bonds are issued with an eye on the future property tax revenue of the development, and the money typically used to improve infrastructure. Once the development becomes reality, the property tax revenue starts to climb and anything over the baseline goes into a special fund that pays off the TAD bonds. When the project is completely paid off, the city and school board start getting all the tax revenue and the community has a development that didn't exist before.

Simple, huh?

"What changes is that when new development comes in, it pays more taxes," Bleakly said. "You won't even see it on your bill."

Allowing TADs

The process starts with local legislation in the General Assembly, already in place for the city of Columbus. The city council requested the legislation in its yearly wish list to local lawmakers, who introduced the bill during the 2007 legislative session. The bill sailed through and was signed by Gov. Sonny Perdue in May.

That bill enabled the council to call for a referendum, which is scheduled for Nov. 6. On that day, Columbus voters will go to the polls and decide if their government should have redevelopment powers -- or the ability to create TADs.

Creating TADs

If it passes, the city would have to devise a redevelopment plan for each TAD created, Bleakly said. Every taxing entity would then have to sign off on the plan before it became a reality -- in the case of Muscogee County, the school board would have to give its OK.

The next stop is the state, and as long as it gives its approval of the district by Dec. 31, the TAD is formed and the tax gears start to turn.

"TADs are a creative way to finance public works without increasing the tax burden on the citizen," said Teresa Tomlinson, executive director of MidTown Inc.

Some TAD supporters decry the use of the word "tax" in the acronym, calling it a misnomer. Tax money doesn't come from homeowners or shoppers, but instead from future development in the TAD, Bleakly said.

"You're basically helping the developer with equity up front," he added.