A controversial proposal to impose a new commercial property tax along the Atlanta BeltLine to fund its trail component is headed to a possible City Council vote March 15, despite opposition from many business organizations, apartment landlords and transit advocates.

Atlanta BeltLine Inc., the organization that is building the 22-mile trail and transit loop around the city, says it needs a tax increase of up to 2.5 mills in a new “special service district” — roughly a half-mile on either side of the route — as part of a way to raise $350 million to complete trail work. The transit funding remains up to MARTA and an existing sales tax, ABI says.

Many opponents say the SSD proposal, first floated in January, is moving too fast with too little consideration, and if instituted in the fall as planned would hit businesses and residential tenants in the midst of an economy-battering pandemic. The transit advocacy group BeltLine Rail Now says that if an SSD happens, it should include funding for the light-rail transit component and not just the trail. 

ABI says an existing funding mechanism called a tax allocation district is falling short by a projected $1 billion due to recessions, legal challenges and other issues. The SSD and its “slight” tax increase are needed, ABI’s website says, “to allocate adequate resources for the completion of a project that is already transforming the city and generating jobs, development and greater equity for all.”

“I think raising taxes on businesses, especially during this pandemic, shows a total lack of empathy for the owners and their employees and their customers.”

Atlanta City Councilmember Howard Shook

City Councilmember Howard Shook of North Buckhead’s District 7 is among the opponents. He says he supports the BeltLine, but that the public shouldn’t make up for ABI’s “pretty crappy forecasting” of its existing funding. He is also concerned that the SSD would become a permanent tax and one imitated by other groups, such as community improvement districts. Several business groups around the city have also asked for a delay or a reworking of the proposal.

“I think raising taxes on businesses, especially during this pandemic, shows a total lack of empathy for the owners and their employees and their customers,” said Shook in an interview. “Never, to me, is government more callous than when they’re cheerfully explaining why it’s OK to raise taxes on other people.” 

A screenshot of an interactive map of the properties that would be within the Atlanta BeltLine’s special service district. To see the map and more information, go to the Atlanta BeltLine Inc. website here.

Another Buckhead-area City Council member, J.P. Matzigkeit, has a different view.

“I will be voting for the SSD. I don’t like raising taxes but I look at this in a way similar to a CID,” he said in an interview, referring to self-taxing business areas called community improvement districts. “And I’ve heard from a lot of people that would have been impacted, and certainly it’s not unanimous, but there were more people that are impacted that were telling me they were supporting it than people were against it.”

“It’s a signature piece for the city that has huge positive economic impact.”

Atlanta City Councilmember J.P. Matzigkeit

“It’s a signature piece for the city that has huge positive economic impact,” said Matzigkeit.

Regarding some of the opposition, Matzigkeit said he views the SSD as “really finishing the BeltLine” and that he would have to study the transit component further to have a position on that controversy.

At a March 1 virtual meeting for Buckhead and other Northside neighborhoods, one of a series touting the SSD plan, ABI offered estimates that a 2-mill tax increase would translate into relatively small numbers for most affected property owners. 

Citywide, about half of the properties in the SSD would pay an increase of under $250 a year, and 80% would pay less than $1,000 extra, ABI said. In Northside neighborhoods, however, those numbers are tighter: about 65% paying less than $1,000 extra and 48% paying less than $500 extra. ABI also offered estimates for particular kinds of properties, all with the gist of relatively low increases. For apartment tenants, if the landlord passed the cost on, ABI estimated rent increases around $3.50 to $13 a month.

However, there was some fuzziness to all of the numbers on a couple of key points. While ABI has been strongly promoting a 2-mill rate in the SSD, the proposal originally allowed it go as high as 2.5 mills. The version heading to council sticks with 2 mills, ABI says. And the total goal of $350 million is contingent on ABI using SSD money to leverage $100 million in contributions from “the philanthropic community.” Rob Brawner, executive director of ABI’s nonprofit fundraising arm, the Atlanta BeltLine Partnership, says there is a “firm commitment” for that money but would not identify any of the donors, citing confidentiality.

In the Northside meeting, ABI officials showed no willingness to change anything about the proposal in the face of questions and criticisms. 

The Beltline’s existing Northside Trail along Atlanta Memorial Park in Buckhead. (File)

The Atlanta Apartment Association, an industry group of major commercial landlords, is a prime critic. An AAA official said in the meeting that the organization’s own analysis shows that ABI could more than fund the trail with a much lower tax increase of 9/10 of a mill. 

AAA also questioned why rental residences are targeted for the SSD but homeowners are exempted even though they legally could be taxed as well. City Councilmember Matt Westmoreland previously said that homeowners were exempted due to concerns a tax increase could boost gentrification and displace them. But AAA is asking why the same concerns don’t apply to tenants. If the tax increases are already so insignificant, AAA asks, why not make them even smaller by spreading them across all properties in the areas?

Jill Johnson, ABI’s director of government affairs, said she would need to see AAA’s millage analysis to respond. As to why homeowners are exempted, Johnson said a basic reason is because they said they don’t want to be taxed and ABI and city officials chose to agree. “The short answer is, we’re not hearing an appetite for the special service district to go that way,” she said.

Shook said that political and business officials he declined to name have explained the politics of that decision. “It just also offends me — to put it bluntly, the point has been made to me over and over privately that, ‘They’re only renters. They don’t vote,’” he said.

Matzigkeit said that landlords have the choice as to whether to pass on any tax increase to their tenants.  “It’s a business decision, really, whereas a single-family homeowner would bear a hundred percent of it,” he said.

AAA spokesperson Chelsea Juras later said in an interview that ABI has already seen its numbers, as the two groups have been discussing the SSD concept for roughly two years. She said that while a rent increase of $10 to $40 a month might sound small to ABI, it is “real money for people who are living check-to-check.” She said AAA believes ABI could reduce the millage and, either way, should delay seeking the SSD until 2022 or 2023.

“Prior to the pandemic, we were concerned about affordability, and right now it seems unconscionable to raise rents and increase taxes on small businesses … when people are struggling and our industry is struggling,” Juras said.

Kara Keene Cooper, senior economic development project manager at Atlanta BeltLine Inc., presents ABI’s estimate of the special service district’s tax impact on an apartment building during a March 1 virtual meeting for Northside neighborhoods.

Transit funding was a major topic at the Northside meeting. The main agitator has been BeltLine Rail Now, which emerged in 2018 amid concerns that MARTA was putting the transit element on the back-burner. The underlying concern is that the trail alone is already sparking gentrification and displacement, and that the transit component is intended to serve everyone and increase economic opportunity. The group’s co-founder is Ryan Gravel, who conceived of the BeltLine and several years ago resigned a board position at Atlanta BeltLine Partnership, ABI’s nonprofit funding arm, in disagreement with its work on equity and affordability.

BeltLine Rail Now has called for transit funding to be included in the SSD so that both elements are built more or less at the same time, an argument that several commenters repeated at the Northside meeting. “What strikes me is, you all are shooting way too small,” said one commenter, arguing that the SSD “ties up a primo funding mechanism without actually funding the transit.”

“Transit remains at the heart of this project.”

Jill Johnson, director of Government Affairs, Atlanta BeltLine Inc.

“Transit remains at the heart of this project,” said Johnson, but added that MARTA is essentially leading that part of the project now and has “significant pots of money earmarked” for it already. She said ABI has heard the transit funding advocates. “On the other hand, we’ve also heard from a large number of people who want to make sure the funds associated with the special service district go to trail construction in their neighborhood… ,” she said.

A political issue for ABI’s Northside support is that, more than 12 years since the first BeltLine section opened, very little has been constructed in local communities. The only existing piece is a segment near Atlanta Memorial Park called the Northside Trail, which opened over a decade ago. In recent years, ABI has been planning a route for the Northeast Trail into southeastern Buckhead, but has run into right of way issues

In a burst of activity coinciding with the SSD proposal, ABI recently made two significant Buckhead-area announcements. Preliminary planning for the Northwest Trail corridor through the neighborhood will begin soon. And the nonprofit Partnership late last year bought two properties on Garson Drive as placeholders for possible trail and affordable housing construction.

For more about ABI’s proposal, see its SSD proposal webpage here.

Update: This story has been updated with comments from City Councilmember J.P. Matzigkeit.