People vested in linguistics say that English is one of the toughest languages to learn because the same word can have completely different meanings, even if it spelled the same way. As it applies to the business world, consider “tad” vs “TAD.”

It sure sounds the same but it takes on a completely different meaning when it is spelled in lower case versus upper case.

According to the Merriam-Webster Dictionary, “tad” means “a small or insignificant amount.” According to the Georgia Redevelopment Powers Law, a “TAD” is a financing mechanism that more often than not means multiple millions of dollars.

Rome uses the Tax Allocation District law for what is essentially an incremental rebate to developers on the back side of a project.

The tax increment is the difference between the amount of property tax revenue generated in the base year the TAD is established and the amount generated after the property is developed or redeveloped.

When a TAD is created, the Georgia Department of Revenue sets the base value for the district. Any growth in the property tax revenue resulting from increases in property value above the base value is collected in a special fund and used for redevelopment costs solely within the TAD.

And only property taxes generated by the incremental increase in the values of these properties are available for use by developers.

Bob Ledbetter Jr., CEO of Ledbetter Properties in Rome, said the most common misconception is that the government is giving away taxpayers’ money — and that’s not the case. Developers only receive back a portion of the taxes they themselves pay.

“The added value the developer brings to the table is increased taxes,” Ledbetter said.

His company has used TAD assistance to bring a couple of projects, the RiverWalk shopping center and the new East Bend shopping center, to Rome.

When forming a TAD the community sets aside a specific geographic area that has the potential for redevelopment but suffers from blight, or underinvestment, or a lack of infrastructure.

To date, the underinvestment criteria has been the one most frequently used to justify creation of a target area within the city or county.

“When I think of underinvestment specifically, when you look at the area around State Mutual Stadium, that’s a classic example,” Rome City Manager Sammy Rich said. “You’ve got a first class facility, you’ve got great access to major highways, you’ve got great traffic counts, but it has been very slow to develop out there.”

Rich said the city is also at the cusp of major redevelopment along West Third Street, which is included in the same TAD geographic district.

“That’s pretty exciting to see the new opportunities that, if not for TAD, we would not be here talking about,” he said.

Thus far in Rome and Floyd County, the first TAD financial package was approved for Ledbetter Properties’ RiverWalk shopping center at Turner McCall Boulevard and Riverside Parkway. The second TAD-assisted project was the Courtyard Rome Riverwalk hotel on West Third Street. The RiverPoint Apartment complex by the stadium became the third.

Charlie Williams, whose Charles Williams REIC was the lead developer for the Riverpoint Apartments, said that project probably would not have happened without TAD assistance.

“It is almost impossible to make the numbers work without that type of a subsidy layer,” Williams said. “Any investor looks at the investment holding period. You analyze cash flows going forward. You look to achieve a minimum cash yield to determine if the project is feasible or not.”

The fourth TAD package was approved for Ledbetter Properties and the East Bend shopping center. The most recent package was authorized for Berry College’s new Fairfield Inn & Suites adjacent to the Rome Tennis Center.

Along the way, another TAD district was created by the city that includes Mount Berry Mall. It was requested by The Hull Property Group, which owns the mall. To this point, HPG has not followed through with their plans to demolish the former Sears end of the mall and redevelop outparcels on that side of the property. The Berry hotel project falls within that TAD property boundary.

That very first TAD district is geographically huge and currently includes two projects that are receiving the benefit of TAD financing aid, the Courtyard Rome Riverwalk and the Riverpoint Apartments.

Rome Director of Finance Toni Rhinehart said taxes collected within that large tax district in 2019 (2020 data is not yet available) totaled $773,175. The Courtyard and Riverpoint Apartments collectively got back $517,035 in TAD assistance. That left $256,140 in revenue that can be used by the city for improvements within that specific geographic district.

Rhinehart said that, in recent years, the city has used some of the excess revenue collected within that district to help finance street and sidewalk improvements along West Third Avenue.

The RiverWalk shopping district TAD generated $83,174 in tax revenue in 2019 and $62,338 was returned to the developers. The TAD reimbursement to Ledbetter Properties for the RiverWalk development will expire at the end of 2024.

Rich explained that the way the city has handled TADs, on a specific project-by-project basis, has worked well.

“We’re foregoing net new (property tax) revenue but, at the same time, you’re picking up instant net new sales tax, net new jobs — and so all of those benefits are completely tangible and immediate,” Rich said.

The East Bend shopping center project alone is expected to create close to 400 new jobs.

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