Making Sense of Georgia’s Revitalization Tools

1. Making Sense of Georgia’s Revitalization Tools Martha Reimann Office of Downtown Development Georgia Department of Community Affairs October 21, 2008

2. 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

3. 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

4. Max State Job Tax Credits Local Enterprise Zone Benefits Local Redevelopment Powers Focused Geographic Areas – 15 to 20% Poverty For-Profit Businesses & Banks Non-Profit Partners CDBGRedevelopment Area Strategy (RAS) CDBG Funds Other Federal & State Programs Opportunity Zones

5. 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

6. 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

7. 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.

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

10. A Master Plan with “Teeth” • 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.”

11. 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.

12. May Promote Redevelopment with Tax Exempt Revenue 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.

13. 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

14. Allows Local Governments to Waive Inappropriate Development Regulations • “. . . 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

15. 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

16. 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

17. Preparing and Adopting an Urban Redevelopment Plan Components of the URP 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 review Advertise and hold a public hearing to get comments on the plan Adoption of the final URA plan by City Council

18. 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

19. Preparing an Urban Redevelopment Plan Components of the URP Required 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

20. Preparing an Urban Redevelopment Plan Components of the URP • improved traffic • public transportation • public utilities • recreational/community facilities and other public improvements • Relocation strategy for displaced • - residents • - businesses

21. State Enterprise Zone What 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.

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

23. State Enterprise Zones • 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 Text Text Text Text

24. 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 excluded • Enterprise must maintain a minimum of five jobs Text Text Text Text

25. State Enterprise Zones Public Benefit Thresholds Qualifying 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 Text Text Text Text

26. 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

27. State Enterprise Zones Enterprise Zones must meet at least THREE of these FIVE criteria: Pervasive povertyusing 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. Underdevelopmentevidenced by lack of building permits, licenses, land disturbance permits, etc. lower than development activity within the local jurisdiction. General distressand adverse conditions (population decline, health and safety issues etc.). General Blightevidenced by the inclusion of any portion of the nominated area in an Urban Redevelopment Area. & Text Text

28. 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

29. 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)

30. Opportunity Zones 1 or more Census Block > 20% Poverty * Enterprise Zone Eligible OZ *Or otherwise meeting 3 out of 5 EZ criteria

31. Opportunity Zones Urban Redevelopment Area (OCGA 36-71) 1 or more Census Blocks > 15% Poverty Eligible OZ

32. Opportunity Zones Eligible OZ

33. Opportunity Zones 20% Poverty Brownfield Site Warehouse Distired Historic Mill Houses(Low Income) Proposed Residential Infill Downtown

34. HB984 -- Opportunity Zones 20% Poverty State EZ Brownfield Site Uptown Warehouse District Historic Mill Houses(Low Income) Proposed Residential Infill Downtown

35. HB984 -- Opportunity Zones State EZ 20% Poverty URA Redevelopment Area Brownfield Site Uptown Warehouse District Historic Mill Houses(Low Income) Proposed Residential Infill Downtown

36. Questions: Brian Williamson – 404.679.1587 bwilliam@dca.state.ga.us Glen Misner – 404.679. gmisner@dca.state.ga.us Steed Robinson – 404.679.1585 srobinso@dca.state.ga.us Martha Reimann – Enterprise Zone URA Plans 404.378.2307 mreimann@dca.state.ga.us