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Friday, June 13, 2014

Will the Eastside TAD live to see another day?

A effort by Mayor Kasim Reed to retire a special tax used to fund redevelop efforts in Atlanta's eastside neighborhoods is likely to be left out of the city's upcoming budget.

The Atlanta City Council on Monday is expected to sign off on the 2015 fiscal year budget, which starts on July 1. Since Mayor Kasim Reed unveiled his proposed budget, which included the controversial retirement of bonds associated with the Eastside Tax Allocation District, Council has pushed back on that recommendation.

Reed's office projected that the retirement of the Eastside TAD would have given the city $5 million in new revenue. But that idea now seems quite unlikely. WABE's Jonathan Shapiro reports that Council has isn't on board with the mayor's plan:

Council finance committee chair Alex Wan said Wednesday Reed's proposal to retire the Eastside Tax Allocation District will be stripped from the budget.

"We were not comfortable having that assumption included," said Wan. "This was kind of sprung on us so we just sent the signal that, no, you need to take it out."

The comments come just days before City Council plans to vote on the budget. Reed's proposal assumes $5 million in new revenue from retiring the Eastside TAD.

The Eastside TAD was first established in 2003 to help fund economic development efforts in "distressed neighborhoods that have suffered from a history of neglect" and to help make Downtown more walkable and improve its look and feel.

As Saporta Report's David Pendered pointed out last month, there was some initial support got the mayor's proposal, which would have freed up cash to fund other projects including a small part of the potential $250 million infrastructure bond package. He explains:

As Councilmember Yolanda Adrean said in a budget hearing this month, without referring to a specific TADs, that the districts, "were meant to be retired. Mission accomplished. Yeah! Close it."

Along with wanting to regain greater control over the city's tax base, some on the council talk about the need to retune the city's budget to the realities of post-recession Atlanta.

In addition, a consensus is emerging behind the mayor's concept to borrow $250 million to fix roads, bridges and sidewalks throughout the city. Simply by closing the Eastside TAD, Atlanta would have access to nearly a third of the $16.5 million annual payment that's projected to pay off the infrastructure bond.

But support for Reed's plan quickly waned amid opposition, namely from Councilman Kwanza Hall, who represents a large swath of the area that the Eastside TAD is intended to help. The AJC's Katie Leslie writes:

But critics say retiring the district is premature and takes away a critical economic development tool in a part of town that is just now starting to blossom. The area has seen a boom in recent development, including the new Atlanta Streetcar, set to begin operation later this summer.

District 2 Councilman Kwanza Hall called the budget proposal "penny wise and pound foolish."

Though the Eastside TAD was created in 2003, it hit several snags and didn't get off the ground until just before the recession hit, which effectively halted construction.

We're told that the mayor's administration is now responsible to find that $5 million elsewhere in the city's budget. It's unclear what changes made will be made to the budget. But those amendments could be introduced on Monday.

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