Avondale Estates business owners raise concerns about special service district tax increaseBusiness owners raised concerns about a potential special service district during an Avondale Estates City Commission work session on Nov. 8. 2023. Photo by Zoe Seiler.
Avondale Estates, GA — The Avondale Estates City Commission is considering creating a special service district in downtown to generate additional take revenue from commercial property owners. But business owners say they may not be able to afford an increase in taxes.
The city commission continued discussing the special service district during its work session on Nov. 8.
The draft 2024 operating budget proposes about $5.3 million in revenue and expenditures. The revenue total for 2024 includes a special service district that would encompass all of downtown Avondale. A three-mill levy would be placed on the properties in that district, and all revenue would service transportation and stormwater projects in the central business district.
The special service district is anticipated to bring in $275,000 in revenue for the city. The revenue raised through the special service district has to be spent for a specific purpose in the district, in this case, that would be the payment for transportation and stormwater.
If the city commission moves forward with a special service district, it would need to do establish the district before the end of the year in order for it to be able to generate revenue during the next tax year. The millage rate, however, would be established in June.
The city commission had previously discussed having the special service district for the Town Green, but there is a funding mechanism in place for that project.
The city commission approved the issuance of revenue bonds on Nov. 15. The city is borrowing $8.59 million to pay for the Town Green, market pavilion and North Woods project.
The city commission first discussed the potential of creating a special service district during its strategic planning session on Aug. 31. It would be a way for the city to diversify its revenue.
“One of the items at the strategic planning session was to look for ways to generate additional revenue, especially in light of the change in policing strategy, which would reduce some revenue that the city otherwise collected via fines and forfeitures,” City Manager Patrick Bryant said.
Bryant said at a previous city commission meeting that the police department is no longer aggressively pursuing traffic violations along U.S. 278, which has reduced the number of citations issued.
“Based upon previous conversations and general goals of this board to not only diversify revenue streams but to have essentially revenue streams that aren’t solely reliant on residential property taxes, staff proposed this concepts as a potential solution to that,” Bryant said.
In order to create the district, the city would have to set the purpose of the district. City staff have proposed that revenue from the district would go toward various capital projects. Those projects include the U.S. 278 complete street project, Laredo Drive cycle track, paving Pine Street, stormwater infrastructure on Franklin Street, constructing new downtown roads as part of the street grid, the Washington and Pine stormwater project.
“Now, unless the board decided to levy a tremendous millage upon those properties, the full cost of those projects would never be covered by the special service district levy, however, it would provide an additional revenue stream to assist with those projects on an ongoing basis,” Bryant said.
Bryant also provided some examples of what the three-mill levy would look like. Banjo Coffee, located at 38 N. Avondale Road, would pay an annual tax of $313. The Lost Druid at 2866 Washington Street would pay an additional $1,716 per year. Olive and Pine would pay an additional $2,971 and Avila would pay an additional $6,054.
Lost Druid Owner Stacia Familo-Hopek added that her business is made up of two parcels.
“Every month, I have to put aside almost $3,000 just for the property taxes on my two parcels, and I have less than an acre. That means I have to make at least $9,000 in revenue every month just to set aside that amount of money to be able to pay that at the end of the year,” Familo-Hopek said.
She asked the city commission to find a more equitable way to generate additional revenue, and “try to find a way to make other properties get the right assessment or pay more to encourage them to actually develop their properties.”
She also suggested adjusting the millage rate across the board and not just in a specific district. Small businesses are struggling in the current economy.
“There’s so many people that have been out of work because of the various strikes that have happened through the year,” Familo-Hopek said. “They’re not spending their money, so we don’t have the revenue coming in that we might have otherwise had in a typical year.”
David Brim, chief executive officer of Brown Manufacturing, asked the city commission to slow down. He leases a space on Oak Street and had seen his taxes go up significantly over the last several years.
“The rent that I paid back in 2006 to what I pay now, I pay more than double,” Brim said. “It’s neat to see that Avondale is finally coming around, but the tax burden that you all are putting on, so quickly, business owners is what I have a problem with.”
Brim, and others, encouraged the city to find a solution that would make underperforming properties, like the 13 acres owned by Avila, pay even more.
“What you really need to do is get the properties that are not performing to tax them in such a way that they start to perform and so you don’t feel like you need to come at us with money,” Brim said.
Bryant added that the city cannot tax properties differently if they are all in the same special service district.
The city however could create multiple special service districts and they could have different millage rates. City staff has said that is an option, but has not proposed multiple districts.
It has been said that the Town Green benefits local businesses by attracting visitors to the city and into stores and restaurants. But several business owners said that they don’t directly benefit from the Town Green.
“We do not see a benefit from events at the Town Green. It takes away from our business,” said Aimee Shari with Little Cottage Brewery. “There’s a lot more to consider than just they need to pay more, because how are we going to pay more if we’re already struggling to pay what we have to pay now.”
Little Cottage Brewery leases their space, but the brewery owners pay the property taxes.
Residents and business owners also raised concerns that the construction of the U.S. 278 complete street project will impact businesses. Commissioner Lionel Laratte said he wants to make sure that small businesses can continue to work in the city.
“My primary concern about this is that it would do something to, not necessarily drive out, but to make it tougher on small businesses,” Laratte said.
Mayor Pro Tem Brian Fisher added that the special service district is important to reduce the tax burden on residents. A majority of Avondale’s tax revenue comes from residential properties.
“These investments are going into your central business district. They’re going into infrastructure. They’re going into stormwater. They’re going into streets. They’re going into things that will improve the business environment in our city,” Fisher said.
He added that the city is at a point where commercial property owners need to be paying more to balance out the tax burden put on residents.
“If we’re going to continue to move the city forward, continue to be pro business, continue to be a place that is a destination for people to be, we’re going to have to make sure that everyone pays their fair share of getting us there, because it can’t happen just off the backs of our residents alone, and thus far it has,” Fisher said.
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