The Cobb Board of Commissioners will consider changes to a tax allocation district subsidy for the developer of the Belmont Hills property at tonight’s meeting, resetting the clock on the deal.
The subsidy works by freezing the property taxes at a certain level, called the base, for the developer.
Excess revenue above the base is used to reimburse the developer for certain expenses related to construction, such as demolition of buildings currently on site or grading of the property.
The TAD was created in 2003 through an agreement between the county, city of Smyrna and Cobb Board of Education.
Commissioners plan on voting to establish 2013 as the new base year, according to the agenda for the meeting.
County Chairman Tim Lee said the TAD as originally agreed upon would expire if the developer didn’t meet certain milestones, such as building permits, by a specified day.
After the recession hit, development at the site slowed to a halt. To keep the TAD as is, rather than have to negotiate a new agreement, Lee said county officials decided to “reset the clock.”
There is nothing structurally different about the new deal, but the deadlines have been moved forward, Lee added.
Smyrna Councilwoman Teri Anulewicz, who represents the area, has been involved in the project for years. She said she was pregnant with her daughter when the old shopping center was demolished in 2009; her daughter is now in first grade.
The development could not have happened without the TAD, Anulewicz said.
“This is an area that was very much, and is still very much, in transition. And when you talk about what is going on in terms of what the market can support, you need that little bit of extra oomph from the city,” she said.
The Belmont Hills development is at the corner of Windy Hill and Atlanta roads.
After the TAD is agreed upon and property taxes are frozen for the site, the county can either issue tax allocation bonds, the proceeds of which will be given to the developer for expenses, or the developer can do a “pay-as-you-go” approach, said Michael Hughes, the county’s economic development director.
“In this case, there were no bonds issued. So there’s no public debt into the property. But what they’re doing is they’re doing a pay-as-you-go-approach. So as the value increases over the base, they’ll take that tax revenue and pay for eligible redevelopment expenses for the project.”
The TAD will end when the developer receives a certain amount of reimbursement, Hughes said.
“They’re only asking for about $12.8 million of redevelopment expenses. And once they hit that threshold, then the county, the city and the school board, in this case, will begin to benefit, if you will, from the increased property value going forward,” he said.
TADs encourage developers to come to areas in need of redevelopment, said Jim Pehrson, director of finances for the county.
“An investor may not want to come in to a particular area and take that risk, but for the incentives offered in a TAD, they might be willing to do that,” he said.
The developer of the property, Halpern Enterprises, has split the property into several tracts. The Cobb School District purchased a portion of the land and built the new Smyrna Elementary on it; the school started its second year earlier this month.
The other portions of the land have been sold to other developers, Hughes said.
Anulewicz said Houston-based David Weekley Homes is planning to build 154 single-family homes on the southern-most section on Atlanta Road, and Atlanta-based Wood Partners has closed on the northern part of the property on Windy Hill Road, where it will build a multi-family development, likely with 275 apartments. Halpern Enterprises will build the commercial and retail space in between them, she said.
The three developers will hold a groundbreaking ceremony on the site on Thursday at 9:30 a.m.
As a resident who lives nearby, Anulewicz is glad to see the project begin.
“I’m on the council, but I’m also a homeowner and resident who lives within walking distance of Belmont Hills. And I’m very eager to see this project get started.”