The complex financing programs are considered one of Atlanta's most powerful tools when it comes to revitalizing blighted neighborhoods or other areas where developers might fear to venture. Property taxes from new developments in the districts are used to pay for road, sewer, and other infrastructure improvements, but have also been spent to help fund museums, hotels, and condominiums.
But a new city audit says the programs, which are operated by Invest Atlanta, the city's economic development arm, deserve more oversight by city officials.
Between 2001 and 2009, says the report conducted by City Auditor Leslie Ward and staff, Atlanta issued $636 million in bonds for five of its 10 TADs: Princeton Lakes, Westside, Eastside, Beltline, and Atlantic Station. Most of the planned projects in those districts are complete, but "neither the city nor Invest Atlanta systematically tracks progress toward meeting redevelopment plan goals," says the 79-page audit, which the Atlanta City Council received today but was obtained by CL on Friday. "Consequently, the city lacks a mechanism to tell when a redevelopment plan is substantially complete and no more public subsidy is needed."
Without a change in policy, the audit says, "the city could spend more than necessary on soft costs, continue to subsidize development when public support is no longer needed, or let resources sit idle."
In addition, the city has little oversight for how Invest Atlanta spends excess cash collected in these districts - which, depending on which study you read, total anywhere between $68 million and $226 million. One district in particular - the Westside TAD, which includes Vine City, English Avenue, and downtown - has been so successful that Invest Atlanta recently explored how to spend that extra public cash, including OK'ing a program that offers up to $8 million to help downtown property owners make their buildings more energy efficient.
The audit recommends, among other things, that the city take steps to require more reporting and evaluation about the TADs, such as seeking the Atlanta City Council's approval of any changes or additions to the districts' redevelopment plans. It also recommended the city's chief operating officer conduct an annual review of the excess cash once the TAD's redevelopment plan is substantially completed and establish a criteria for how that money is used - including possibly returning it to participating jurisdictions, which could use the money for basic services such as public safety and schools.
Also recommended: requiring Invest Atlanta to more clearly define and monitor its administrative operating costs.
"While Invest Atlanta has process in place to control developer costs, it does not subject its own operating costs and those of its affiliate Atlanta Beltline Inc. [the nonprofit entity planning and developing the 22-mile parks, trails and transit loop], to the same scrutiny and oversight," the audit says.
Invest Atlanta quibbled with some of the auditor's suggestions in written responses included in the report. In a statement issued today, the organization's management says it agrees with some of the audit's main conclusions - some of which Invest Atlanta had already identified and is currently addressing.
"After coming on board last year, Invest Atlanta's new management team quickly determined that the TAD program needed a more proactive evaluation and implementation strategy for creating jobs and economic activity," the statement says. "Accordingly, in December 2011 Invest Atlanta hired an outside consulting firm to conduct a strategic review of the TAD program in light of current economic conditions and national best practices." That report is scheduled to be finalized later this week.
The agency welcomed additional oversight but added: "... Invest Atlanta recommends that additional requirements be designed carefully so they do not significantly increase financial and administrative burdens that might have the effect of slowing the program's ability to create jobs and grow the economy."
There's lots of info to digest in the report. Saporta Report's David Pendered has a thorough look at the audit. And be sure to check out Greg Bluestein and Jeremiah McWilliams' take on the report, which includes input from Christopher Leinberger of the Brookings Institution and John Woodham, the Buckhead attorney who successfully challenged the state's law creating TADs all the way to the Georgia Supreme Court.
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