Due to the subscription requirements, Atlanta BeltLine Inc, has received permission to reprint the below Op Ed in its entirety. It originally appeared in the Atlanta Business Chronicle.
The Atlanta BeltLine: Winning for children, schools, and city
by John W. Somerhalder II
As former chairman of the Atlanta BeltLine Partnership, and as the current chairman of Atlanta BeltLine, Inc., I have seen the transformative impact this initiative has had on our city, neighborhoods, and families.
But this transformative momentum is at risk. Without the help of the Atlanta Public Schools board, the Atlanta Beltline’s expansion could come to an end.
The Beltline’s success is real and winning for Atlanta public schools. More than $400 million invested into the BeltLine from public and private resources has created more than $2.4 billion in private development. For every $1 invested into the Atlanta BeltLine, $6 is created in private development.
- The historic Fourth Ward Skate Park and the Eastside Trail.
- New $43 million investment in the Westside Trail.
- $60 million in City Water Shed and Park Funds to fund Historic Fourth Ward Park and the acquisition of the quarry that will one day be Atlanta’s biggest park: the 350-acre Bellwood Quarry Park.
- $50 million in philanthropic dollars invested in greenspace and trails.
- $200 million in private investment to transform the former Sears building into the Ponce City Market.
Future investments will connect 45 Atlanta neighborhoods and create 22 miles of rail, 33 miles of trails, 1,300 acres of parks, 700 acres of rebuilt parks, 46 miles of new and rebuilt streets, 5,600 units of affordable housing and 1,100 acres of brownfield remediation, all while attracting new investment, creating 30,000 new permanent jobs, increasing property values, increasing tax revenue and building a better Atlanta that we can all enjoy.
By 2030, the BeltLine investments and new private developments will increase our tax base by a projected $20 billion.
For this to continue, the BeltLine needs the help of the majority of the nine-member APS board to survive.
What is our connection with the APS board? The Atlanta BeltLine is a joint redevelopment initiative of the City of Atlanta, Atlanta Public Schools and Fulton County.
The APS board, city of Atlanta and Fulton County agreed to forego future property tax revenue increases on underutilized properties along the proposed BeltLine. They would forego increases over the next 25 years and dedicate the monies to building the Atlanta BeltLine.
Put simply, the BeltLine helps increase the values and taxes of this property, and those increases help fund the BeltLine.
Rather than forego all of its future property tax increment during the 25-year period, the APS board negotiated in 2005 annual fixed cash payments out of the Beltline tax fund. These fixed payments were negotiated to be 5 percent of the total projected BeltLine fund of $3 billion over 25 years. The APS board would receive approximately $7.5 million per year over a 20-year period, starting in year six of the program, which is 5 percent of that $3 billion.
But then the Great Recession hit, dramatically lowering the projected property tax revenue increases from $3 billion to $1 billion. This means the APS board’s 5 percent share today would be $930,000 year, not $7.5 million per year. But the APS board is still requesting the $7.5 million fixed payment per year, which is significantly higher than 5 percent.
So far, the APS board has received 20 percent of the total revenue, approximately $28 million, far exceeding the 5 percent it was intended to receive.
What impact will this continuous $7.5 million payment to the APS board have on the BeltLine? It stops BeltLine expansion to new neighborhoods. All money for operations would be gone and Atlanta BeltLine Inc. shuts down.
How do we save the BeltLine’s funding? The answer: the APS board should accept 5 percent from the BeltLine fund annually, as originally intended. Such an easy, obvious solution will impact APS finances by less than 1 percent. Without this simple solution, the impact on BeltLine finances could be devastating.
Once authorized by the BeltLine board, I will submit a proposal to the APS board: honor our 2005 deal, continue to invest in the Beltline, and accept a 5 percent annual payment for this project. This agreement ensures the BeltLine’s financial survival.
By accepting 5 percent, the APS board receives a fair share of tax revenue while the BeltLine continues new investment in 45 neighborhoods.
I will be happy to meet with APS board members, the superintendent and others to explain the benefits of investing in the Beltline. As a businessman, I see the return on investment for our schoolchildren, including an expanded property tax base that increases funding for schools, more sales tax revenue from economic development, an influx of new families into Atlanta school districts, and increased school enrollment, to name a few.
All that vanishes if the BeltLine cannot continue.
With a funding agreement, our children win, our schools win and our city wins.
John W. Somerhalder II is chairman, president and CEO of AGL Resources Inc.