BeltLine officials need cash to finish the trail network. What will it cost Atlanta?

To tax or not to tax—that is the Special Services District

BeltLine officials need cash to finish the trail network. What will it cost Atlanta?
The Atlanta BeltLine Eastside Trail (before the pandemic)

Photograph by John Becker

When the Atlanta BeltLine was proposed in the mid-2000s, the year 2030, the date the project was scheduled to be completed, seemed far off. But as trail pavement was poured and dirt moved for new parks, the Great Recession walloped the project’s main funding source, known as a tax allocation district. In short, a TAD is a financing program that uses increases in property values to pay for infrastructure like paths, parks, and rail. But lawsuits over whether the BeltLine’s TAD should even exist, tax breaks for developers, and other legal battles also sapped the project’s funding.

Those blasts to the budget left Atlanta Beltline Inc., the nonprofit tasked with building the BeltLine, $1 billion short of the cash it needs to complete the loop. And though nearly a decade remains until that 2032 end date, BeltLine officials now say they need $350 million to complete the wildly popular trail network—and time to raise that cash is running out.

“The bottom line of this is, we will not finish the BeltLine trail in the next 10 years if we don’t do something different than just waiting on the TAD as our go-to resource,” says Clyde Higgs, the CEO of Atlanta Beltline Inc. “The math doesn’t work out in our favor if we do not do something literally now. This is a significant opportunity in front of us.”

The solution, according to the BeltLine: draw a line around commercial properties and multi-family apartments near the project and levy what they consider a slight tax increase. Mayor Keisha Lance Bottoms supports the measure, known as a Special Services District, and the Atlanta BeltLine Partnership, the project’s fundraising arm, is also on board, along with BeltLine visionary Ryan Gravel. If the Atlanta City Council agrees, the so-called Special Services District could start hitting tax bills later this year.

Under the proposal, owners of commercial properties and multi-family apartments will pay slightly more in taxes for 10 years. Project officials would use that revenue to issue bonds that will raise an estimated $100 million toward completing the BeltLine trails. Higgs says the philanthropic community—both he and Rob Brawner, the executive director of the partnership, declined to name exactly who—has pledged to give $100 million. The TAD would contribute $100 million to the effort. BeltLine officials expect to receive the remaining $50 million in grants.

Starting next year, officials say, crews could start building out the remaining roughly 14 miles of the original 22-mile loop trail. Design-ready projects like the Southside Trail segment that will connect Adair Park and Grant Park could also start soliciting bids and starting construction. Once complete, the trail network will total roughly 33 miles, stretching not only around the city but also spurring off into neighborhoods such as English Avenue, Blandtown, and Buckhead.

Juan Calle, the owner of Buena Vida Tapas along the Eastside Trail in Old Fourth Ward, says he’s supportive of the proposal; he became familiar with the concept of self-taxing to pay for improvements when Big Sky, a restaurant he owns in Buckhead, became part of the neighborhood’s community improvement district. “If the BeltLine continues to increase its footprint, it’s going to benefit every single neighborhood, as well as the neighborhoods connected to it,” he says.

According to their estimates, BeltLine officials say, the tax hike on approximately 95 percent of the affected properties in nearly all the segments will come out to less than $1,000 a year until the district collects $100 million, for up to 30 years. (In the northside and northeast study areas, those percentages are 65 and 79 percent, respectively.) But the size of the property, its location, the year it was bought, and many other factors mean the tax will hit property owners differently. Landlords will likely pass that cost to their tenants. And while some businesses or property owners who can afford to set up shop (and stay in business) on the BeltLine might have the cash to soften the blow, others might not, putting them more at risk for potential displacement.

The boundaries of SSD roughly follow the path of the BeltLine loop and its planning area, but also veer into and away from the city in some areas to capture more commercial properties. Helping the proposal’s political chances, it excludes single-family homes, condos, and townhomes. In a commercial district like Little Five Points, some parcels fall just outside the proposed self-taxing district; Beltline officials say commercial properties along Moreland Avenue like Junkman’s Daughter, the Vortex Bar and Grill, and shops along Euclid Avenue fall outside the planning area. Sections of the Westside, where the trail has logistical and financial hurdles to overcome, appear to make up the largest chunk of the taxable properties.

Johnny Martinez and Brandon Ley, the owners of the Georgia Beer Garden and Joystick Gamebar, located half a mile from the BeltLine on Edgewood Avenue, question why their and their neighbors’ businesses are included. He says they see zero traffic or revenue from the BeltLine, and think the self-taxing measure will make it more difficult to rally fellow businesses and property owners to create a community improvement district for Old Fourth Ward, which could pay for public safety and infrastructure improvements specifically for the popular nightlife area.

“City Hall tends to have a preference for figuring out ways to make improvements to the city that encourages people to move to the city, then we’re not really doing the things we need to do for the people who already live in the city,” Martinez says “The reality is, the better you make things for the people who live in the city, the more people are going to want [to live here].”

The SSD proposal has also drawn criticism from BeltLine Rail Now, an advocacy group pushing project officials to build out the BeltLine’s transit program. They argue that a pot of funding like the Special Services District could also help raise the cash for rail alongside the trail—the foundation of Gravel’s graduate student thesis that started the entire BeltLine project—and affordable housing. During a recent virtual town hall meeting hosted by Atlanta Beltline Inc., attendees pressed the issue, and even asked why BeltLine officials were aiming so small with the amount of money that could be collected.

BeltLine officials say that finding a new source of funding for the trail network would free up tens of millions of dollars in TAD funding for affordable housing, and they have plans for Atlanta Beltline Inc.-owned property to include affordable space for small businesses. And with more trails comes more development, which builds density and thus support for transit along the BeltLine. The question for property owners and the public is whether the project deserves the financial pinch, as small as it might be.