GM Redevelopment Plan? Taxpayers Beware.

When a county commissioner talks about spreading “risk” and “cost,” taxpayers should run in the other direction.

Those words were quoted from a recent edition of the DeKalb Neighbor (click for link) in which Commissioner Jeff Rader talked about the potential redevelopment of the Doraville GM plant: “We … need to spread risk and cost of this to other stakeholders. [Otherwise] the county will have to service the debt and use taxpayer funds to pay back that money.”

The GM redevelopment is a project that taxpayers need to be watching closely. Very closely.

New Broad Street, the developer of Florida’s Celebration community (click for link), is proposing a partnership with DeKalb County where the developer and the county will acquire the GM site and build a supersized mixed-use center with condos, apartments, retail stores, office space, and hotels. The county is proposing to use a special allocation of federal stimulus bonds known as recovery zone bonds to help finance the redevelopment of the GM site. The “benefit” of using these bonds is that the federal government subsidizes 45 percent of the interest.

However, the remaining principal and interest on the bonds would have to be paid out of the county treasury. That’s our tax dollars the county is gambling with. Whenever you read news stories that the county is thinking about shutting down recreation facilities and judges are reading the Riot Act to the CEO and county commissioners about the judicial budget (click for links), you have to wonder what the county is thinking when they consider using the very same tax dollars for risky development projects.

Some officials in the county government are going so far as to talk about increasing our property taxes to help pay for the bonds to redevelop the GM site. That should be a complete non-starter.

When Commissioner Rader was talking about spreading “risk” and “cost,” he was talking about the county’s efforts to shake down the Doraville City Council to use the city’s funds to help pay for the project, because the GM plant is located inside the City of Doraville. That’s still using tax dollars. It’s robbing from Peter to pay Paul. Doraville would be right to say no.

The DeKalb County Development Authority would be responsible for issuing the bonds to help pay for the New Broad Street project. Generally speaking, in DeKalb County, the use of our tax dollars to support the projects of a quasi-governmental authority requires a voter referendum. This referendum requirement is the result of a law I authored in 2007. As part of this year’s House Bill 203 (click for link), however, the General Assembly granted the county a one-time exemption for the stimulus bonds now being proposed for the GM site.

The reason for the exemption is that the stimulus bonds had a June 30th “use them or lose them” deadline. It would have been impossible to hold a referendum under this time constraint. The consequence of not meeting the deadline would be that DeKalb’s allocation of stimulus bonds would be reallocated to other local governments in Georgia. Those local governments would then be able to use the bonds for infrastructure projects like improvements to roads and sewers. Infrastructure is the real purpose of these particular stimulus bonds, not risky development projects. DeKalb either has obtained or is attempting to obtain an extension of the June 30th deadline.

Furthermore, I considered it an important safeguard that the county commission would have to conduct an open public vote on an intergovernmental agreement to spend our tax dollars to repay the stimulus bonds. This safeguard exists whether or not the referendum requirement applies to these bonds. The county commission has not yet voted on an intergovernmental agreement to use our tax dollars to repay stimulus bonds for the New Broad Street project at the GM site. In addition, the commission would have to vote to approve any property tax hike that is proposed for this purpose.

The commissioners absolutely should oppose such an agreement or tax increase. The county is in no position to bear the “risk” and “cost” of a supersized development project using our tax dollars. In a recent article in the Dunwoody Crier (click for link), Commissioner Elaine Boyer appeared to suggest that a majority of the county commission is prepared to reject a tax increase for the GM redevelopment plan.

To make sure this happens, your county commissioners need to hear directly from you. You can find their contact information at if you would like to voice your opposition.

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