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A divided Avondale Estates City Commission establishes new tax district for downtown businesses

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A divided Avondale Estates City Commission establishes new tax district for downtown businesses

Avondale Estates residents and business owners raised concerns about a special service district during the city commission meeting on Dec. 13, 2023. Photo by Zoe Seiler.

This story has been updated.

Avondale Estates, GA — The Avondale Estates City Commission, at its Dec. 13 regular meeting, established a special service district and adopted the 2024 operating budget and capital program.

The city commissioners were divided over the special service district, which would be a separate tax levy for a defined area, in this case the city’s downtown business district. The city commission approved the special service district with a 3-2 vote. Commissioners Brian Fisher, Lisa Shortell and Dee Merriam voted in favor and Mayor Jonathan Elmore and Commissioner Lionel Laratte were opposed.

The city commission will set the millage rate for the special service district in June. The commission hasn’t made a final decision on what that rate would be, but they have discussed a potential three mill levy.

A special service district creates a way for the city to generate additional revenue to be spent in the boundaries of the district. The district encompasses downtown Avondale Estates and means an additional tax can be levied on commercial and residential property owners in that district to generate revenue for transportation and stormwater projects in downtown.

The 2024 operating budget that was approved does not account for the special service district. The budget plans for $5.1 million in revenue and expenditures. If the millage rate for the district is set at three mills, it would generate about $275,000, bringing the city’s total revenue to $5.4 million in 2024.

The capital budget will begin in 2024 with about $5.7 million in revenue. The city anticipates receiving about $12.7 million in revenue for the capital projects budget in 2024 and 2025 bringing the total revenue to about $18.4 million.

The special service district caused some disagreement among the commission. Laratte said he couldn’t support the SSD because he doesn’t want to hurt small businesses.

“What I see with something like this happening is that at some point in the future, and it may in the near future, we will see small businesses leave,” Laratte said. “It will be untenable for small businesses and what we’ll have coming in are larger commodity type businesses, national chains.”

Laratte has owned three small businesses and said he empathizes with small business owners.

“I know what it’s like to not get a paycheck of my own because I’ve got to meet payroll. Amounts that may seem miniscule in the grand scheme of things has a large impact on the small businesses,” Laratte said. “I can’t find a way to come to the conclusion that this would not hurt small businesses in our downtown.”

Elmore suggested the city commission wait until next year to create the district, so the city can evaluate how construction of the U.S. 278 complete street project will impact traffic and businesses.

“I think that to create a district that needs love…[and] needs roads, sidewalks, stormwater and infrastructure improvement, to levy a tax that will benefit only that district is logical. I think it’s fair. I think it’s fine,” Elmore said.

For years, money that was spent in the central business district mainly came from residents. Most of the city’s property taxes comes from residential properties.

“One of the things we’ve been trying to do up here…is to create a more balanced revenue stream so that there’s a little less burden on the residents and, yes, a little more on other revenue sources including property tax in the business district,” Elmore said.

Elmore also said he thinks the service district is a good idea, but the U.S. 278 construction will be disruptive. He suggested the city commission talk about the service district again in a year.

“I don’t think anyone can honestly say they know what that impact’s going to be,” Elmore said. “It’s going to be a stress on our [central business district] primarily as far as business goes.”

Mayor Pro Tem Brian Fisher added the district could be created, and the millage rate could be set at zero. He also acknowledged that residents in the service district boundaries will also be impacted.

“I think the hard part of creating the district is an important thing to go ahead and do. As we’ve had conversations over several weeks, I don’t want to discount the impact it will have potentially to businesses,” Fisher said.

The service district would give the city the ability to invest in downtown at a quicker rate. The revenue generated from the service district has to be used for projects in the district, he added.

“It should have a direct impact on your roads, your streets, your stormwater, your sidewalks, all of those things,” Fisher said.

Business owners in Avondale Estates have raised concerns about the special service district, which will be an additional tax on them. The Avondale Estates Business Association shared letters with Decaturish that say the association is firmly opposed to the special service district.

“We would first like to express our wholehearted support for the growth and development that our city has witnessed in the past few years. We understand that much of Avondale’s progress has been the direct outcome of very hard work by Avondale’s public servants, working in tandem with us—your local businesses,” the AEBA’s letter to the city commission states. “We believe that the SSD will negatively impact our businesses, residents, and the overall vibrancy of our community. We believe it will hinder rather than help our collective goals.”

The AEBA suggests that the city commission either raise the millage rate across the city to cover expenditures or consider imposing a vacancy tax on undeveloped or underused properties in the central business district.

To view the association’s letter to the city commission, click here. To view the AEBA’s community letter, click here.

Aimee Shari with Little Cottage Brewery urged the commissioners to think about the business owners and put themselves in the shoes of the business owners.

“It would be one thing if none of our other expenses increase, we could pay a little bit more in taxes. But the fact that last year, our property taxes – even though we are renters, we have the pass through – they went up 60%. Our general liability insurance is going up 60%,” Shari tearfully said.

For Little Cottage, and other business, the additional tax raises concerns about if they will still be open in six months because more people aren’t buying their products, she added.

“Going forward, really look at it from our perspective. If there was another way to bring in this potential income, let’s shoot for that first instead of isolating this one small area so that this one small area of people are now going to be penalized,” Shari said.

Residents of Locust Lofts in downtown Avondale also raised concerns about the additional tax they will see. With creating the service district, the area has to be contiguous and areas cannot be carved out. So residents living in the central business district will see the additional service district tax levy as well.

Resident Brittany Gabey said it would be an inequitable tax.

“We’ve seen our property taxes increase over the last few years, and then having the additional tax rate in the service district on top of that would be more insult to injury for us,” Gabey said.

Gabey, and other residents, asked the city to consider the long term residents in downtown that plan to stay in their homes and not sell their properties any time soon.

“We also want to be sympathetic to the many business owners that are our neighbors and know what impact that has on their small business,” Gabey said. “We do completely agree with all of you that the infrastructure does need to improve, but what we might want you to consider is that that tax should be shared across the entire city as the entire city, not just the downtown district, not just the businesses and not just the residents of that district, would immensely benefit from those infrastructure improvements.”

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