Thursday, April 19, 2012

Should the public pay to help retrofit downtown's skyscrapers and buildings?

Posted By on Thu, Apr 19, 2012 at 1:08 PM

The board members of Invest Atlanta, the city's economic development arm, OKed a program this morning that would allow owners of private buildings in downtown to tap up to $8 million in public cash to make their buildings more green.

The incentive-based program is part of the Atlanta Better Buildings Challenge, a voluntary effort based on the Better Building Initiative launched last February by President Barack Obama to make the country's buildings more energy efficient. Atlanta's set a goal to make commercial office buildings 20 percent more efficient by 2020 - and by doing so, attract more tenants and new businesses to the area.

Under the rough guidelines we came across (PDF), private property owners can apply to use the grants to conduct energy audits of their buildings. Invest Atlanta will then invite owners to apply for additional grant funding to "complete specific energy and water efficient upgrades identified in the audit." Property owners would have some skin in the game and be required to provide "at least 60" percent of the project's cost to receive the public cash. The Invest Atlanta board would still have to approve requests for the public funding.

Cash for the program comes from the Westside Tax Allocation District, or TAD. TADs are complex redevelopment tools that issue bonds to incentivize developers to build in what are supposed to be "blighted" areas. The debt is paid off with future property tax revenues in that area. A TAD helped transform a former steel supply company and brownfield into Atlantic Station. More than half of the Atlanta Beltline's funding will be generated by a TAD that borders the 22-mile loop.

The Westside TAD was created in 1992 and includes such impoverished neighborhoods as Vine City and English Avenue. Its area was expanded in 1998 to include downtown, which has allowed projects such as the World of Coca-Cola, the Glenn Hotel, Allen Plaza, and other buildings to benefit from the TAD funding. According to a 2012 audit, the financial tool's been a "tremendous success." Apparently there's enough cash to offer incentive programs such as what the Invest Atlanta board approved this morning.

Cheryl Strickland, Invest Atlanta's managing director of redevelopment, said the program keeps with the Westside TAD's mission and could give downtown a much-needed boost. Invest Atlanta, she says, is taking a long view of things.

"Until market demand for new commercial building is reestablished, one of the best ways to support economic development downtown and the continued revitalization of Atlanta's central business district is to encourage commercial retrofits, renovations and upgrades of the existing building stock," she said in a statement. "Despite a burst of new building activity over the past decade, there remains a host of aging, obsolete, underutilized and inefficient structures downtown."

She adds: "From the standpoint of economic development, this proposal is timely and reflective of today's market realities. A strong and competitive central business district is important economically. The relative strength of a city's downtown impacts its ability to attract and retain jobs and tourism, along with the city's overall brand and attractiveness to businesses, residents, and visitors. Repositioning downtown Atlanta is one of the most effective ways the TAD program can support economic development in Atlanta."

All of which sounds noble. (Believe us, we're all for making buildings more energy-efficient and helping the environment.) But should the public pay to help make sure that privately owned buildings gobble up less energy - and their tenants pay cheaper power bills - when the direct benefit to the public is hard to gauge? Especially when the pot of cash officials are tapping is the Westide TAD, which could be used to invest in infrastructure fixes to help turn around some of the city's most historic neighborhoods? That's an honest question.

NOTE: This post has been altered to correct an error about downtown projects that received TAD funding.

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