Beltline-APS dispute still no closer to resolution

ABI chairman urging school system to accept new contract

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  • Joeff Davis
  • Failing to resolve issue could stifle Beltline progress, ABI board chairman says

John Somerhalder, the CEO of AGL Resources and chairman of the Atlanta Beltline Inc. board, wants to call a truce and spark a new deal that would keep payments owed to Atlanta Public Schools coming — and ensure the successful smart-growth project stays afloat.

Since early 2013, ABI and the City of Atlanta have ducked scheduled payments owed to APS. The dispute stems from a contract inked in 2005 that called for ABI, the city-created agency overseeing the project’s development, to pay the school district approximately $7.5 million over 20 years to offset the property tax revenue the school system agreed to forego to help fund the Beltline.

That amount equated to 5 percent of $3 billion, or what the Beltline’s main funding source, the tax allocation district, was expected to generate over the life of the project. But then the unexpected — a lawsuit effectively halted the Beltline’s TAD and the Great Recession — happened.

So the city stopped paying. The dispute has sparked a tense political and financial battle pitting the mayor of the city against its school superintendent, and by proxy, the future of public education and an economic development magnet.Discussions have been held for more than a year but the two sides aren’t close to negotiations. City councilmembers have pitched their own ideas.

On April 24, Somerhalder took to the pages of the Atlanta Business Chronicle urging the two sides to redo the agreement. He’s proposing — and could possibly introduce to the Beltline board next month for approval — that APS acknowledge the revised estimate of the Beltline TAD’s total financial impact, which is now $1 billion. And that means receiving roughly one-third of the amount the sides originally agreed upon.

“The original agreement was made in a different time,” he says. “The world has changed. It’s important for people to stop and say, ‘What’s really important?’ And what’s important is the win for everyone.”
If APS is going to enjoy the long-term perks of the Beltline — more tax revenue feeding the school system’s coffers and students filling classroom seats — Somerhalder says striking a new deal makes sense. And for the Beltline to stay in operation, a new agreement must be made. It’s a win-win, he argues.

Failure to work out an agreement soon could hamper additional projects, including extending the Eastside Trail, partnering with private companies to help build out the trail and transit, or issuing more bonds to fund parks or affordable housing. If the original agreed-upon payment were made today, ABI would have to shut down.

APS officials, who have a legally binding contract on their side, say pitting schools versus the Beltline is a false choice. APS Spokesman Billy Linville notes that the city boasts of $130 million in reserves. In addition, officials dispute some of Somerhalder’s figures. Barring any breakthroughs, a judge might have to help.

“If progress can’t be made on discussions then the courts may have to decide,” Linville says.