As Atlanta leaders weigh extending the timelines of the city’s tax allocation districts (TADs) until 2055 to fund the mayor’s $5.5 billion neighborhood revitalization plan, a high-stakes dispute has sprung up over a deceptively simple question: Should the original baseline from when the TAD was created decades ago be used to calculate how much future property tax revenue it receives — or a new one set at the time of extension?
The answer could determine whether the city of Atlanta captures billions of dollars in future property tax growth to fund the TADs, or whether Atlanta Public Schools (APS) and Fulton County instead keep that revenue. A tax increment baseline is set when a TAD is created and additional property tax revenue above that baseline goes to the TAD. APS contributes half of the tax increment revenue to each TAD, while Fulton and Atlanta each contribute a quarter.
Two North Fulton legislators, Rep. Chuck Martin (R-Alpharetta) and Rep. Jan Jones (R-Milton), say that if the city of Atlanta extends its TAD timelines, then it’s effectively creating new TADs — and it should use a new baseline pegged to that creation date. That would sharply reduce how much tax increment revenue the city of Atlanta, Fulton, and APS contribute to the TADs.
By contrast, using the original TAD baselines set between 1992 and 2006 would generate far more tax increment revenue, due to the significant growth in property values since then for the eight Atlanta TADS — Beltline, Westside, Eastside, Perry-Bolton, Campbellton, Stadium, Hollowell/MLK, and Metropolitan.
In an April 8 letter, Martin and Jones notified the Atlanta City Council, Fulton County Commission, and the APS board — which must approve any TAD extensions — of a legal opinion from the Georgia Office of Legislative Counsel on the matter. It says a TAD extended beyond its original termination date is legally considered a new TAD, so it can’t continue to use the original tax increment baseline, under Georgia’s Redevelopment Powers Law. The law, which governs TADs, does not explicitly address TAD extensions.
Martin and Jones warned in their letter that extending the TADs to 2055 using the current tax increment baselines could cost Fulton up to $85 million annually in lost property tax revenue. That amount is “roughly equivalent” to the cost of remediating the Fulton County Jail to comply with a federal court order, they said.
City pushback
The mayor’s office says resetting the TAD baselines would effectively erase the revenue needed to fund Dickens’ $5.5 billion Neighborhood Reinvestment Initiative, which aims to catalyze economic development in historically underinvested areas. It promises $1.5 billion for trails and greenspace, $1.8 billion for transit expansion, and $1.3 billion for affordable housing.
The Beltline TAD alone generates roughly $115 million annually, so resetting its tax increment baseline from its 2005 creation year to the present would wipe out that revenue stream, Dickens’ chief of staff, Courtney English, told Atlanta Civic Circle.
“If you were to start over — if you were to move the baseline — that increment will go to zero, and it would take up to 10 years to actually rebuild the increment to allow you to do anything meaningful within the TAD,” he said.
Resetting the tax increment baseline to the present for all eight TADs could reduce funding for the Neighborhood Reinvestment Initiative by as much as 75% or 80%, English warned.
The city’s law department is pushing back. In an April 14 letter to the Atlanta City Council, City Attorney Marquetta Bryan said the legislative counsel opinion supplied by Martin and Jones misinterprets the Redevelopment Powers Law and ignores decades of established practice.
Bryan pointed to a 2021 Georgia Court of Appeals decision, Franzen v. City of Atlanta, which she said recognized the city’s ability to extend the termination date of an existing TAD. Bryan also emphasized that the legislative counsel opinion is merely advisory for members of the Georgia Legislature, and not legally binding.
Brewing legal battle
With billions of dollars and competing public priorities at stake, the brewing dispute over whether a TAD’s tax increment baseline should get reset if the TAD’s expiration date is extended will likely play out in court.
“I’m sure there will be many lawsuits,” Martin told Atlanta Civic Circle. “There are hundreds of thousands of taxpayers that will be adversely affected in Fulton County if they try to barrel forward and take tax increment that clearly state statute says doesn’t belong to them.”
Atlanta’s largest redevelopment projects have routinely drawn legal challenges — from federal lawsuits over Beltline land seizures to legal challenges over Gulch developer CIM Group’s $1.9 billion tax subsidy package from the city. Any TAD extensions by the city are likely to face similar scrutiny.
Tensions are already running high among Atlanta leaders and the public over whether the city should extend all eight TADs, or just extend some and let others sunset on schedule between 2030 and 2050. Atlanta City Council members, who must approve any TAD extensions, also have conflicting opinions.
A March 31 report from the Neighborhood Reinvestment Initiative Commission — an advisory board created by the city council in January — unanimously recommended that the city find additional public funding sources for the $5.5 billion plan, beyond TAD revenue. The APS and Fulton members of the commission also balked at extending some or all of the TAD timelines.