Courtney Knight Managing Director Redevelopment Revitalizing Atlanta Redevelopment Programs 2 TAX ALLOCATION DISTRICTS Revitalizing Atlanta Creates incentive for development that would otherwise not occur ID: 633667
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Slide1
Tools for Redevelopment Courtney KnightManaging Director, Redevelopment
Revitalizing AtlantaSlide2
Redevelopment Programs 2Slide3
TAX ALLOCATION DISTRICTSRevitalizing AtlantaSlide4
Creates incentive for development that would otherwise not occurTax increment financing (TIF) is a tool used to publicly finance certain redevelopment activities in underdeveloped or blighted areasLocally, TAD creation results from legislation passed by the City, County, and Atlanta Public Schools
TADs attract private investment which results in increased development, new jobs, reduced crime and greater economic vitality
New development within the TAD increases property values and thereby increases tax revenue
What is a Tax Allocation District?Slide5
How do TADs work?Slide6
10 Tax Allocation DistrictsTo date, approximately $560 million in TAD bonds have provided gap financing for over $3.4 billion in private development
Assessed property values in TADs have grown 20% since 1998 while City of Atlanta has grown at 5%
Incentivize development in blighted and underdeveloped areas of
City
Beltline
Exception:
Other
TADs’
tax increment or bond proceeds are
used
primarily as developer incentive, while the Beltline TADs increment or proceeds are used to fund the construction of Beltline infrastructure.
City of Atlanta TADsSlide7
Livable Centers Initiative (LCIs)
Atlanta Regional Commission
City
of Atlanta and Invest Atlanta will jointly submit an application to Atlanta Regional Commission for Livable Centers Initiatives (LCIs
).
LCI designation will
provide funding for major transportation improvements that will
improve access
to
the
University
site by
improving
access to the
main
roads north of the site.Planning grants to enhance connectivity, accessibility by multiple transportation modes, walkability, and mixed-use development in activity centers, town centers and corridors.Slide8
PRIVATE INVESTMENT PROGRAMSRevitalizing AtlantaSlide9
Federal program enacted by Congress in 2000 to attract private sector investment to communities with high rates of poverty and unemploymentNMTC investment finances commercial and mixed-use projectsInvest Atlanta’s NMTC entity has $148MM in NMTC Allocation
Federal priorities for NMTC investments:
Job Creation
Jobs Accessible to Low-Income Persons
Goods and Services to Low-Income Communities
Flexible Lease
R
ates for Locally-Owned Businesses
New Markets Tax CreditsSlide10
Project receives a 7-year below-market rate loan.
20% of loan does not have to be repaid at
end
of term
.
80% Developer Funds:
Bank
Loan, Grants or
Charitable Contributions
20% Equity
: Tax Credit Investor Contribution
NMTC Investment Fund
New Markets Tax Credits –
Deal StructureSlide11
Invest Atlanta has been awarded $148 million in NMTC allocation since 2007.
$48 million of NMTC allocation
is currently
available (as of October 2014)
New Markets Tax Credits ProgramSlide12
United States federal program created in 1990 to attract foreign investmentProgram allows families to expedite US citizenship process with investment of $500,000Program targets investments to projects in low-income areas
Invest Atlanta is creating a new EB-5 regional center to match investors with eligible projects
T
arget
Areas for Investment
EB-5 Foreign Investment ProgramSlide13
EB-5 Program requirements for developers:Target Area – Projects must be located in low-income areasJob Creation – Each $500K investment must create 10 jobsDeveloper Loan – Typically funds are provided as a 5 year loan
Ideal Deal Size – $5 - 20 million range is best for EB-5 tool
Matches foreign investors to local projects
Collects $500,000
f
rom each investor
Funds are combined then released when project is ready
Investors get a visa for residency when project is complete
EB-5 Foreign Investment Program
Invest Atlanta EB-5 Regional CenterSlide14
EB-5 Program Financing for Development ProjectsAmountInvestor #1$500,000
Investor #2
$500,000
Investor #3
$500,000
Investor #4
$500,000
Investor #5
$500,000
Investor #6
$500,000
Investor #7$500,000Investor #8$500,000Investor #9$500,000Investor #10$500,000Total EB-5 Investment$5,000,000Development projects typically get a 5-year loan with 4-6% interest rate
EB-5 Job Creation RequirementsFor each $500,000 invested, 10 jobs must be created.
In this example, the project must create 50 jobs.
Once funds are received and construction
starts, visas can be issued.EB-5 Foreign Investment ProgramSlide15
Business Financing InitiativesSlide16
Property Assessed Clean Energy Financing (PACE)
Private financing for building owners to make energy efficiency upgrades.
Funds provided 100% upfront.
Repayment over 20 years along with annual property tax bill.