Making Sense of Georgia’s Revitalization Tools

Making Sense of Georgia’s Revitalization Tools

Martha ReimannOffice of Downtown Development

Georgia Department of Community AffairsOctober 21, 2008

Incremental Changes in Georgia’s Redevelopment Statues Since 2004 Intended to:

• Utilize State’s existing redevelopment tools in an innovative fashion

• Reward local governments that place “skin in the game” with access to maximum State Job Tax Credits

• Operate state-wide, wherever “pockets of poverty” exist in rural, urban and suburban communities

• Support bottom up, locally driven community and economic development initiatives through local collaborative partnerships

Goal: To Integrate Benefits of These Statutes:Statutes

• Enterprise Zone Employment Act – O.C.G.A. 36-88

• Georgia Urban Redevelopment Law – O.C.G.A. 36-61

• Georgia Business Expansion & Support Act – O.C.G.A 48-7-40.1

Opportunity Zones

Focused Geographic Areas – 15 to 20% Poverty

Max State Job

Tax Credits

CDBGFunds

Local Redevelopment

Powers

Local EnterpriseZone Benefits

Other Federal & State Programs

Non-ProfitPartners

CDBGRedevelopment Area

Strategy (RAS)

For-ProfitBusinesses &

Banks

Creating an Urban Redevelopment Area The Brainstorming Phase

• List all possible local applications for the Act• Highlight potential redevelopment areas

containing these potential projects on a map• Eliminate any area that might not be

appropriate for political or other reasons• Superimpose block group boundaries meeting

20% poverty criteria

Definition of a “Slum Area”

Any area where there are a predominance of buildings or improvements that are conducive to:• ill health,• transmission of disease,• infant mortality,• juvenile delinquency,• crime, or

What is a Slum Area?Caused by the such buildings or improvements being;

dilapidated, deteriorated, old, obsolescent, inadequately designed for ventilation, air,

light, sanitation, or open spaces, over populated.

• Raising property values and tax revenues• Reclaiming underutilized land with existing infrastructure investments• Providing more intown housing• Promoting innovative development• Humanizing blighted areas

A URA Plan allows the imposition of conditions more specific than existing land use regulations.

Conditions in the URA plan run with the property and control development above and beyond other land use regulations: “the provisions of the plan with respect to the

future use and building requirements applicable to the property covered by the plan shall be controlling with respect thereto.”

A Master Plan with “Teeth”

Tax Exempt Bonds

Redevelopment entity may issue tax exempt bonds to be repaid with profits from the urban redevelopment project. May be secured by mortgages on property within the district.

Bonds issued under this Code section shall not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction

Bonds can be retired from sources such as grants, loans and other revenues.

Redevelopment entity may issue tax exempt bonds to be repaid with profits from the urban redevelopment project. May be secured by mortgages on property within the district.

Bonds issued under this Code section shall not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction

Bonds can be retired from sources such as grants, loans and other revenues.

May Promote Redevelopment with Tax Exempt Revenue Bonds

Intergovernmental Contracts

• Can bind local governments for specific periods of time, even if elected officials or political climate changes

• Allow things that a local government cannot do directly

“. . . to plan or replan, zone, or rezone any part of the municipality or county or make exceptions from building regulations”

Examples: Cottage development, narrower streets, mother in law suites

Allows Local Governments to Waive Inappropriate Development Regulations

Property Purchase and Disposition under the Act

• Sale of property acquired under the act need not be to the highest bidder

• Competitive RFP’s may be solicited and evaluated

• Bidder’s qualifications and the desirability of their concept plans may be considered

• Conditions related to URP must be attached to deeds and will run with the land

Taxes and Fees

Property owned by the URA is not taxable unless/until sold to a private party

Local government has the power to levy special taxes and assessments within the urban redevelopment area

The First Legal Step:Adoption of a resolution by the city or county finding that:

• one or more slum areas exist, and• rehabilitation, conservation, or redevelopment of

such area is in the interest of the public health, safety, morals, or welfare of the residents of the city or county.

Next:Prepare the plan draft and put make it available for reviewAdvertise and hold a public hearing to get comments on the plan Adoption of the final URA plan by City Council

Components of the URPPreparing and Adopting an Urban Redevelopment Plan

Preparing an Urban Redevelopment Plan

Data Supporting the Slum Designation Lower than average growth in assessed tax value• Fewer new building permits than elsewhere• Deteriorated housing and building conditions• Visual Blight and litter• High crime statistics• Unemployment• Vacancy rates• Bankruptcies and business closings• Substandard public infrastructure• Bad street or lot layout• Fractured or unclear property ownership (clouded

titles)• Delinquent property taxes

Components of the URPRequired information: proposed land

acquisition demolition and removal (needs to be fairly specific)

redevelopment improvements

zoning and planning changes anticipated

Relationship to definite local objectives

appropriate land uses

Preparing an Urban Redevelopment Plan

improved traffic public transportation public utilities recreational/community

facilities and other public improvements

Relocation strategy for displaced

• - residents• - businesses

Components of the URPPreparing an Urban Redevelopment Plan

State Enterprise ZoneWhat is it?

In 1997, the General Assembly enacted the Enterprise Zone Employment Act, recognizing the need for revitalization in many areas of Georgia. The State Enterprise Zone program intends to improve geographic areas within cities and counties that are suffering from disinvestment, underdevelopment, and economic decline, encouraging private businesses to reinvest and rehabilitate these places by providing local tax abatement.

Note: Must be “blighted” , not intended for prosperous or greenfield areas.

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• Property tax exemption -- OCGA §36- 88-3(1) • Abatement or reduction in occupation taxes, regulatory fees, building inspectionfees, and other fees that would otherwise be imposed on qualifying business -- OCGA §36-88- 9(a)

State Enterprise Zones

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• Area may include one or more abutting parcels that meet designation criteria

• County & Cities may jointly designate zones• Area may be re-designated if it continues to meet criteria after expiration of initial 10 yr. term• County Property tax exemptions capped at 10% of digest


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Property Tax Exemption for Qualifying Enterprises Not to Exceed:

100% for first five years 80% for next two years 60% for year eight 40% for year nine 20% for year ten

School taxes, sales and use taxes, and taxes imposed for G.O. debt are excludedEnterprise must maintain a minimum of five jobs

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Public Benefit ThresholdsQualifying business or service enterprise must create five or more new full-time job

Provide “economic stimulus” with sufficient quantity and quality as shall be determined by local government(s) that designated zone; and when possible”, 10% of new employees shall be low-and moderate-income individuals

If residential and/or rehab of an existing structure where value of improvements > 500% of land value, exemptions apply to ANY entity


Qualifying business or service enterprise (for normal EZs)

• “business enterprise” means retail, manufacturing, warehousing & distribution, processing, telecommunications, tourism, research & development, new residential construction and rehabilitation

• “service enterprise” means finance, insurance, real estate activities listed under SIC 60 – 67 or entities engaged in day-care


Pervasive poverty using 1990 Census data. Each block group must have at least 20% poverty.

Unemployment Rate (average for preceding yr.) at least 10% higher than State or significant job dislocation.

Underdevelopment evidenced by lack of building permits, licenses, land disturbance permits, etc. lower than development activity within the local jurisdiction.

General distress and adverse conditions (population decline, health and safety issues etc.).

General Blight evidenced by the inclusion of any portion of the nominated area in an Urban Redevelopment Area. &

TextText

Enterprise Zones must meet at least THREE of these FIVE criteria:

Promising Uses for Opportunity Zones

Blighted industrial, commercial and residential areas: Brownfields (contaminated industrial sites) Declining commercial corridors (greyfields) Deteriorating in-town neighborhoods (housing and

infrastructure) Pockets of urban poverty in otherwise affluent

counties Rural areas with sluggish economies Underperforming industrial parks in poor census

tracts

HB984 – Job Tax Credits under Georgia Business Expansion & Support Act Compared to Regular Enterprise Zones an Enterprise Zone within in an Opportunity Zone:

• Broadens types of eligible businesses (any legal businesses within the area)

• Lowers threshold to 2 jobs to qualify for the state’s maximum job tax credit ($3,500 per job for 5 years)

Opportunity Zones

Enterprise Zone 1 or more Census Block

> 20% Poverty *

*Or otherwise meeting 3 out of 5 EZ criteria

Eligible OZ

Opportunity Zones

1 or more Census Blocks > 15% Poverty

Urban Redevelopment Area (OCGA 36-71)

Eligible OZ

Opportunity Zones

1 or more Census Blocks > 15% Poverty

Redevelopment AreaState Enterprise Zone

Eligible OZ

Opportunity Zones

Warehouse Distired

Historic Mill Houses(Low Income)

BrownfieldSite

Downtown

Proposed Residential Infill

20% Poverty

HB984 -- Opportunity Zones

Uptown Warehouse District


BrownfieldSite

Downtown


State EZ20% Poverty

HB984 -- Opportunity Zones

Uptown Warehouse District


BrownfieldSite

Downtown


State EZ20% Poverty URA Redevelopment Area

Questions:

Brian Williamson – 404.679.1587 [email protected]

Glen Misner – 404.679. [email protected]

Steed Robinson – [email protected]

Martha Reimann –Enterprise Zone URA Plans 404.378.2307

[email protected]

mailto:[email protected]




Documents

Making Sense of Georgia’s Revitalization Tools