City of Atlanta Sets Aside Paltry Sum for Massive Beltline Debts Owed to Schools
The Council could have made an outright good faith payment, but decided to put it in a contingency fund, pending a settlement agreement.
The problem is, Atlanta Beltline Inc. owes much more to the city’s school children: at least 13.5 million dollars, plus interest.
As Atlanta Progressive News has reported, APS joined the Beltline Tax Allocation District (TAD) in 2005, agreeing to forgo tax revenue from properties within the TAD for twenty-five years, in order to benefit from higher tax revenues generated by Beltline development further down the line.
In return for the foregone APS tax revenue, the agreement included annual payments of 7.5 million dollars from the Beltline to APS.
The Great Recession threw a wrench in that plan; property values did not increase at the projected rate. The Beltline and APS renegotiated the deal in 2009, but since then, the Beltline has defaulted on its payments.
The Beltline’s own financial and operational practices, not just the Recession, are a factor in its supposed inability to pay up.
“APS schools have cut music program offerings and foreign language classes. That’s the exact opposite of what we should be doing if we’re talking about college and career readiness for all of our children. Some of those cuts could have been avoided if the Beltline paid what they owe,” Erica Long, PTA president at Perkerson Elementary, told APN.
The Atlanta City Council voted 14 to 1 on June 24, 2015 to set aside four million dollars for the Beltline debts, as an amendment to the new fiscal year budget.
But back in January, Councilmember Natalyn Archibong introduced legislation, on behalf of Council President Ceasar Mitchell, to pay the full thirteen million dollars.
Archibong told APN that the figure was not negotiated down from 13.5 million to four million, nor decided upon in anticipation of a four million dollar settlement offer.
Rather, she said that at the end of the budgeting process there was four million dollars that had not been allocated, and Councilmember Kwanza Hall (District 2) introduced a budget amendment to pay it to APS.
“I think this is an opportunity for us to really show good faith and step in the right direction in a collaborative fashion,” Hall said at the Council Meeting.
“Our children are very important to all of us. Some of the great initiatives like the Beltline are also high on our priority list, so figuring out a strategy where we can come together and resolve it, really is something that I’m committed to,” he said.
Hall’s framing of the two as competing priorities echoes Mayor Kasim Reed’s heated defense of the Beltline last year, when he claimed the Beltline is “more popular” than the public school system.
Long is concerned, however, there is pressure on APS to accept a low settlement.
“I worry about the precedent APS might set by accepting a partial payment, especially with a party that has been uncooperative up until this point. I wouldn’t want the four million dollars to encourage them to accept less than what’s owed to our children,” she said.
The one dissenting member of the Council was Felicia Moore (District 9), who expressed concern about the City getting in the middle of the dispute.
“I think the mechanics of how we do it is important. Because if we want to set a precedent of every time the Beltline or Invest Atlanta [the Atlanta Development Authority], or any other arm of the City does not pay or honor any agreement that they have with another entity that we are going to backfill it, I think that’s problematic,” she said.
In an editorial earlier this year, APN took the position that the City does have an obligation in the matter:
“The Beltline may be a separate organization, but it is carrying out development projects for, and in conjunction with, the City of Atlanta. It is a nonprofit created by the redevelopment arm of the City of Atlanta, Invest Atlanta,” the editorial stated.
“Stakeholders like APS got involved with the TAD–allowing tax revenue that was supposed to pay for education to go to the Beltline–because the Beltline is perceived as an extension of the City. Therefore, the City of Atlanta should pay, even if the Beltline cannot, because of all the salaries, champagne, and overhead that it is putting before its obligations to APS,” the editorial stated.
As APS previously reported, the Beltline’s Board did not include any money in its 2016 budget for settling the debts owed to APS, despite the fact that their budget increased $13.1 million from last year. Among those opposing any payments to APS included Mayoral candidate Cathy Woolard and Fulton County Commissioner Joan Garner (District 3).