Al's Park: A Shocking Betrayal

The City has done a dramatic about face, canceling plans for Al's Park and turning it over to a developer who will build housing on the former park site. While still under construction, this is obviously not a park and the outcome is now all but certain.

The City proper is characteristically unhelpful, but those who know those in the know say they know what is really going on and it is not at all what it seems. And this is all on a need to know basis: off the record, on the QT, and very hush-hush.

First, the City learned that Al had no intention of spending his golden years "aging in place" to find eternal rest amongst the City's Founding Fathers in the soon to be acquired City of Dunwoody Cemetery. Al also seems to have lost interest in swimming, much like his flirtation with minor league ball during his midlife crisis twenty years ago. On the upside, the City Elite are pleased they never pursued plans to build Al's Ballpark.

But there is also some suggestion the City had other reasons to alter the Al's Park Plan. Apparently the financing for Al's Park was, shall we say, creative. As it turns out, the City never actually purchased the property. You know, as in the vernacular where the purchasing party, the buyer, pays the current owner, the seller, an agreed upon amount of "cash" at which time the seller transfers title, deed and ownership to the buyer. In fact, the City did not attempt to acquire the property through the more common avenue of a "mortgage", instead relying on a commitment from a third party to purchase the property and lease it to the City. One can only conclude that the City's credit rating sucks. Taking this deal to completion relied upon a "Parks Bond" that was surprisingly but soundly rejected by an unruly electorate.

It seems shady financing had as much to do with this turn of events as Al's fickleness.

On another positive note, the happy builder seems to have escaped a rather nasty process, known as a competitive bid, that while common in other cities does not encumber real estate transactions with our Smart City. While reluctant to discuss the process, this builder shows great pride in his workmanship. When asked about the wisdom of building a house on top of what had been a swimming pool he indicated that many homes in this area are sitting on potential swimming pools. Apparently the difference between a basement and a swimming pool is how the water gets in.

It should go without saying, but won't, that Al is a bit miffed. It is common knowledge that he came here to make his fortune, but like many an opportunist he arrived with no intention of spending is final years in a place like this. He rather doubts that those who sit in judgment plan to either.

Many also know that a recent trip back home reminded him of what he left behind and rekindled a desire to get it back. To return to a place where "blue collar" is not a put down, where local pubs sell local beer and barkeeps may "talk funny" but not with a trumped up British accent. A place where folks read, play euchre, and are proud of their bowling league. Where kids play afternoon basketball at the local school's outdoor court--because they can, because it is safe. Where baseball is a pick-up, empty lot, lazy summer afternoon activity, not a cause célèbre. Where the cemetery has been there for generations.

He realized he had given up so much of real value for so little--just to be a winning rat in a race it turns out no one was watching.

But the City is not done playing around with Al. In the event Al unloads his house in Dunwoody before he can "make the big move", the City has informally committed to turn a blind eye to a nearby zoning violation allowing Al and his family to live in a "step down" facility.

Unlike their formal commitments, this may stick. But Al is not so sure, viewing this as just another reason for Springtime in Sebewaing.

Al's Park Gets Natatorium

As has been detailed here, Al's Park is a "planned City park" to include luxurious landscaping, a modern water feature cascading into a swimming pool and a pool house. Now the City plans an upgrade. A natatorium. And construction is well underway.

Though it has been difficult to obtain an official reason for the upgrade, sources "in the know" have suggested this is directly related to Al being overheard saying "I can't wait for Speedo weather". This comment sent shudders down the spine of all who heard it, or heard of it, and caused quite a stir amongst parents of small children. A rather catty remark regarding "muffin tops" is grinding its way through the rumor mill.

While not denying the allegation, an unnamed city official reportedly explained that the city was powerless to regulate male swimwear, even in a City park. In fact, unless Al appears with "man-boobs" or stark naked there is absolutely nothing the city can do. Consequently a substantial structure is required as a "swimsuit cover up". And make no mistake about it, the City is committed to THIS park. 

As for Al, he will neither confirm nor deny that he owns or would wear a Speedo, but did observe that "every day I wake up Al's Park just gets better and I can't wait to see what's next."

Al's Park Gets Pool

Construction on Al's park is continuing on schedule. As shown below, excavation and preparations for the initial pour for Al's pool is coming along, well, swimmingly.

And this is not to be just any pool, this is quite the water feature with a cascading waterfall (located in the foreground) feeding a "pleasure pool" at the base of the falls. To the side (off camera) will be a single-lane lap pool and adjacent to the main water feature, but not connected will be a series of fresh-water aquatic environments suitable for fish and amphibians--expected to be the star attractions. Excepting Al himself.

The finished "bath house" will be located where the existing Comfort Palace now stands, or leans, much like the Tiltin' Hilton in Sebewaing. It is expected to include a shower and hot tub as well as a sauna, providing Al with year-round activities.

At first many were surprised that the park would include a pool and bath house. But this was cleared up with a trip to nearby City Hall where the Assistant Director of City Parks' Associate Director pointed out this park, including the water feature, has always been in the "Al Master Plan". Furthermore this plan has been well vetted and subjected to much public input and scrutiny. The Associate to the Assistant to the Director did concede that the project may have moved up the priority list due to the unexpected availability of the property at an attractive price. The City is reported to have paid no more than a fifty percent premium over market well within City purchasing practices.

And Al couldn't be more pleased. When discussing the progress with a neighbor, Al is reported to have remarked "I couldn't be more pleased". In fact, he looks forward to completion of the "Al's Park" later this spring so he can begin his life-long dream of learning to swim.

Al's Park Progressing Nicely

Al's Park is coming along nicely. As can be seen below, the pool walls are up and need only a few weeks curing before some serious "wet work" begins.

We're also seeing the beginnings of hardscaping that will enhance the curb appeal along the main thoroughfare (dare we call it a "parkway"?)  fronting the park.

The use of landscaping timbers resonates with the intended faux au naturale design of Al's park. It will also solve a long standing mystery as the installation of the wall provides some explanation for the "fire hydrant in the sky" that has stood tall and proud above the sidewalk for years.

A member of Council reportedly stopped by to update Al on the status of bidding on the work to complete the bath house, install the moon lighting and the security system. There is also a commitment, perhaps to be immortalized in writing, to ensure that these systems remain operational, unlike the nearby radar speed sign that has been out of service for six months.

It was previously mentioned that Al could not be happier. That has proven incorrect. Upon seeing the real progress and getting the update on "Works In Process", Al was so thrilled he nearly peed his pants.

Al's Park

Before Dunwoody 1.0 called it a Job Well Done, they knew it was only fitting and proper to honor a long serving and long suffering fellow citizen. Al. Plus, it completely zero-ed out the city reserves demonstrating that Dunwoody can be run just like a business. A non-profit business, but a business nonetheless.

Work has already begun on Al's Park. Land has been acquired and as you can see below, demolition is nearly complete.

Before you know it there will be a ribbon cutting ceremony with all the appropriate dignitaries in attendance to officially award Al his private park. Expect a beaming recipient. And surely this ancient oak will be the centerpiece of the ceremony that  day and his personal green space for years to come.

So if you enjoy a chance encounter with Al, be sure to congratulate him.You better suck up if you ever want to set foot on his park because that's the way Dunwoody works.

Don't It Make Your Brownfield Green?

The site of the old GM plant is known as a brownfield mostly because it is the site of the old GM plant. Now in a land nearby but a time long ago developers would have lined up to redevelop this site with their only contact with local government being around zoning -- consider upcoming development projects at Perimeter Center. And why did they do this? To make money and in particular to make profits. Fast forward and now any development larger than Al's Park is going to require that government Politicians pony up some public money -- think: Atlantic Station, Cobb's Brave's Stadium, Atlanta's Falcon's Stadium or the more disappointing Beltline project.

There are some tools, both raised in discussions around the GM plant available for Politicians to tap OPM on behalf of developers : Development Authorities, Tax Allocation Districts and Tax Abatement. Since there has been so much confusion around these tools let's take a closer look, shall we?

Development Authorities

Nothing is simple in Georgia, at least nothing involving politicians and power, and Development Authorities are no exception. The Atlanta Law Firm of Seyfarth Shaw have a very informative report De-Constructing Development Authorities : Learn Their Rules From How They Function focussing specifically on the types and behaviors of these quasi-governmental organizations here in Georgia. A key thing to keep in mind whilst perusing that document is that the Georgia Department of Community Affairs show the Downtown Development Authority of the City of Doraville as a single jurisdictional statutory Development Authority. Directors of these corporations are appointed by local politicians and you can rightly assume that Directors are not selected by an arms-length procedure but are a priori known to the politician. While these are unpaid positions Directors wield power and it is very common for power to be converted to money. It's magic, but it always seems to happen. It is thru the Development Authority that major Developers tap into public money for their profit.

Tax Allocation Districts

First and foremost TADs are interesting because no other place on the planet calls this technique a TAD, instead others use the more descriptive "Tax Increment Financing" or TIF. TIF is more descriptive because TAD or TIF, financing, AKA debt, is involved. Digging deeper let's move away from some of the confusing talk and look to an authoritative source: TAD Allocation Districts: How They Work from the Andrew Young School of Policy Studies. 

A depiction of how TAD/TIF's work with regards to underlying asset (property) values is this diagram from the above document.

The key takeaway is that for the period of the TAD/TIF taxing agencies (e.g., City, County and Schools) forgo all the potential tax in the yellow triangle in hopes of getting a pot of gold after a few decades.

There are lots of assumptions embodied in the diagram. Straight line asset appreciation. Really? Again, the "F" in TIF is "Financing" and these projects tend to be front-loaded in expense and asset value. It is more likely to follow an inverse exponential curve with the public foregoing significantly more than this simplistic depiction.

Has there ever been a development in it's golden years doesn't need to be torn down and redeveloped? What is life expectancy of the proposed development, how does that compare to the TAD period, what happens in the latter years of TAD and years thereafter? IRS depreciation schedule allows depreciation of commercial property over 39 years and residential property over 27.5 years. Depending on the length of the TAD the pot of gold may be skinnier than shown above.

Tax Abatements

Technically a Development Authority has no abatement powers which is why "abatement" almost always appears in quotes, but thru a very complex set of business arrangements they can reach a situation whereby the Developer gets a tax break, is awarded a grant and effectively leases the development over a period of years after which the title is transferred to the Developer. You'll find all the skinny in Understanding Property Tax "Abatement" courtesy of the Carl Vinson Institue and Seyfarth Shaw. 

This scheme relies on removing the property from the tax rolls by transferring title to the quasi-governmental Development Authority concurrent with a lease/purchase agreement with the developer and the issuance of a bond. 

The net net on this tool is that it is not as lucrative as a TAD and the property lease itself may be taxable, so "abatement" is negatively impacted. No one looking to profit from this endeavour favour this approach.

Current Kerfuffle

There is a developer who wants to get richer making money off the old GM Plant site and there are lots of Politicians who want to help make that happen. The Politicians' tool of choice is a TAD as it maximizes the amount of money Politicians get to funnel thru their Development Agencies to the Developers. Remember, money equals power and control of money is indistinguishable from having money. That is not to say that the artist's renderings of the redeveloped property are not beautiful. They are. They just do not surface any of the assumptions or risks. 

If you look at what is at risk in the context of a TAD you'll simply need look at your property tax bill. You'll note that your payments to the City, the County and the School System increase in that order with Schools dwarfing the others. If you look at this from that perspective you see a similar graph. 

If you take the position, as the Superintendent of DeKalb County Schools seems to, that the cost of service will increase over the period of the TAD possibly exacerbated by the addition of residents and students due to the TAD then you might not see this as a good idea. TAD proponents, many of whom benefit from the Power of OPM the TAD offers, point out that if the TAD fails a Tax Abatement will be used in which case the School's tax on that property will drop to zero for the abatement period. And, the pot of gold at the end of the journey will be smaller with abatement than with TAD. 

Perhaps. Perhaps not. 

While the Schools tax bill is quite high for the payer relative to City/County the question is what is the impact on the City given that this current revenue stream is a larger percentage of their overall revenue? 

A little perspective. 

A number of over $900,000 has been bandied about as the School's annual take from this property. Sounds like a lot of money. It IS a lot of money. But in the context of the 2016 proposed DCSD budget this amount represents less than one fourth of one percent of the revenue from local sources and less than one eighth of one percent of total revenue. Or look at it this way: it is the budgeted amount for the Superintendent. Or consider that if the budgeted amount for the School Board were reduced by a little over fifteen percent it would cover the lost revenue. Not much when compared to the tax base of the entire county, but what about GM plant city tax when compared to total for the li'l burgh of Doraville? Loss of that revenue might make a bigger dent and it may be that Developers and their Minions are playing a game of chicken with the Superintendent. Or will we see a noseless spited face?

What Can It All Mean?

The property in question is indeed a brownfield. But is is also fronting a major interstate with easy access to another, is surrounded by arterials, is adjacent to a MARTA rail station and located on the north side of the economic powerhouse of the southeast. It is hardly what one would call "blighted." It will be developed and the only question is when and who gets to put their fingers in what pie and pull out how many plums. And it can be done without decades-long tax-sucking schemes.

And were not all of today's blighted brownfields once a shining example of what could and should be? The pride of the community? It is probably true there will be higher asset values after completion of the TAD or abatement but to assume that values continue to rise without bound is absurd. At least in the absence of another infusion of public cash--after all isn't that really what this is all about?

Considering that DCSD is at their millage rate limit perhaps Superintendent Green feels that TAD related service costs will rise beyond what property value growth across the county can cover. Given we're talking decades, at least two generations of school children, it is probably beyond human capability to accurately project that far into the future and in that context it is reasonable that those who will bear the costs of bad predictions to exercise more caution than those who do not. The Lewis/Pope/Reed fiasco should have taught us to beware of school leaders who are readily attracted to expensive shiny objects. 

It is clear that the proposed development of the GM site will add to DCSD service cost but what is not clear is by how much and at what periods during the development. No known detailed model of projected service cost has been vetted. The revenue side is clear. With a TAD DCSD get the revenue they're getting now--in the absence of a detailed model of "property appreciation in adjacent areas" that is what is known. With tax abatement current revenue goes away.

Think of it this way: a child born at the beginning of this development may well have earned an advanced college degree and be launching their career before DCSD can tap into TAD's pot of gold. Carrying an increased service cost over 25-30 cohorts of students with many unknowns about if or how any of these costs are to be covered may explain Superintendent Green's position.