Union City voters have been given the go ahead to decide in November if a Tax Allocation District (TAD) should be formed in a portion of the city. If approved, funds to make needed improvements would come from tax revenue generated within the district. TADs such as Atlantic Station and Camp Creek Marketplace have been used for area redevelopment.

The proposed area for the TAD has not been specifically determined, said City Administrator Terrell Jacobs, though it does generally include the area within a one to two mile radius of Shannon Mall and in the Royal South Parkway area near Flat Shoals Road and I-85.

“The area around Shannon Mall is the area in most need of redevelopment. We have several vacant big box stores,” Jacobs said. “That is why a lot of communities use TADs to help spur development and fill those vacancies.”

The area around Royal South Parkway presents other unique development opportunities, Jacobs said, due to proximity of I-85 and Atlanta’s world-class airport. He said the benefits of a Tax Allocation District to the community come in the form of new business that move into the district, accompanying sales tax from retail sales and increased jobs.

If approved by voters, property taxes in the Tax Allocation District would be frozen at the time the measure is implemented, with property tax dollars forming a base amount to be built on in successive years. Increases in property tax revenues within the TAD in succeeding years due to re-valuations would be used to pay off the bond money used for redevelopment rather than going to the General Fund.

“The city, the county and the school maintain the base,” Jacobs said. “The additional amounts of tax revenue generated beyond the base go to paying off the bond indebtedness that helped finance development in the district. The base cannot be more than about 10 percent of the city’s overall tax base and it looks to help establish development or redevelopment in a given area. In actuality, it freezes that base year of taxes and whatever the increase of appraised value in that area, in terms of future property re-valuations, that money is used to help take care of the financing of the bonds you would use for the development.”

Bond funds extend for 20 years and would be used to install the infrastructure, such as roads, streetscapes and other amenities and development costs, that would be needed to draw businesses to the area. Particular to the area is the presence of a large mass of granite just below the ground surface, a factor that presents time and money challenges to development. Overcoming some of those costs can also be addressed by bond funds, Jacobs said.

“This is an economic development tool used to help finance economic development in a specific area in a community,” said Jacobs. “The tax dollars are generated by the businesses in the TAD to help themselves. Funds used within the TAD are not generated by anyone outside the TAD, only by those within the district.”

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