Brookhaven TAD Vote Nov 4

What is a TAD? A tax-allocation district (TAD), is an area where property taxes above a certain threshold are allocated for a specific project. These projects are typically for revitalization and redevelopment efforts.

Tax-allocation districts have attracted criticism as being subsidies for politically-connected developers. Some cities have discontinued their use but citizens in those cities will be paying off the debt from those tax-allocation districts for years to come.

In Georgia, TAD legislation is described in OCGA §36-44-5.

Note: Tax increment financing (TIF), is the term used in most municipalities outside of Georgia. For consistency, TAD will be used here but refers to both TAD and TIF.

General Criticism of TADs

• TADs subsidize big-box retailers to the detriment of independent businesses.
• Large retailers profit disproportionally - several billion dollars since the late 1990s.
• TADs often result in gentrification.
• TADs have been used to designate areas as "blighted" and condemn private property through eminent domain powers.
• The TAD process arguably offers advantages to politically connected developers, builders, and lawyers.
• Some cities using TADs have found that local school quality deteriorates.
• The use of TADs for residential development results in increases in public service expenses.
• With multiple TADs in the same region, there can be a race to the bottom as cities compete with each other to attract new businesses.
• There is insufficient accountability of project feasability. If a project fails the developers still benefit increasing the likelihood of project failure.
• Governmental subsidy of retail development is economically damaging.
   
  Sources:

• "Redevelopment: The unknown government"
• "Subsidizing Redevelopment in California"
• "Greenfields, and Sprawl: How an Incentive Created to Alleviate Slums Has Come to Subsidize Upscale Malls and New Urbanist Developments"
• Don't Subsidize Big Boxes at Local Shops Expense
• Fishing for Taxpayer Cash: Bass Pro's Record of Big-League Subsidies, Failed Promises, and Consequences
• Wal-Mart Subsidy Watch
• Big Tax Breaks for Big Boxes
• Reforming Tax Increment Financing (TIF)
  Specific Criticism of TADs for Brookhaven, Georgia

• Brookhaven residents are already on the hook for costly errors made by the City Council and staff.
• If redevelopment projects are not profitable, the citizens will be responsible for the debt, not the developers who stand to profit from any success.
• The Brookhaven City Council has repeatedly shown a willingness to ignore constituents.
• Developers have little risk with high potential for reward.
• The City Council has adopted a moral code which is not reflected by its citizenry.
• The City of Brookhaven is ill-prepared to make the fiscal and public policy decisions necessary to properly manage TADs.
• Many of the touted advantages of cityhood have been empty promises.
• The City Council would choose who will run the redevelopment agency responsible for managing TAD funds, leaving those funds to the discretion of unelected political appointees.
• Brookhaven has demonstrated a willingness to support developers and builders regardless of the environmental impact.
• Brookhaven has no economic need for TADs.
  Tax-allocation districts (TADs) and Tax increment financing (TIF) Exemplars

• St Louis, Missouri declared the West County Shopping Center "blighted" and provided $30 million to build a new mall.
• Chicago saw 30 percent of the money earned by the district over 24 years go to politically connected developers and allies in the final 12 months of the tax district rather than to the schools and parks.
• West Des Moines, Iowa provided $60 million to fund development of a new mall.
• Baraboo, Wisconsin declared a cornfield and an apple orchard "blighted" in order to make the site available for a Wal-Mart supercenter.
• New Orleans provided $20 million for redevelopment of public housing with a cost of $420,000 per low-income-unit.
• Denver subsidized projects do not contribute to public services, forcing taxpayers in the rest of the city to cover those costs themselves.
  Source: http://www.notad.org/