City Responds to Common Criticisms About Downtown Development

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In the September issue of the Decatur Focus, the city has compiled many of the commonly heard criticisms of commercial and mixed-use development downtown and provides replies…

Downtown multiple dwellings caused the increase in our current school population.

More multi-family developments will do the same. In the six downtown multi-family developments completed since 1999, there is a total of 45 students registered for the current school year. Seventeen attend elementary school, two attend FAVE, 11 attend Renfroe and seven attend Decatur High School. That is 45 students out of 641 units. This accounts for only 2 percent of the student population growth. The school system’s current student growth projections include estimates, developed by consultants, for the number of students likely to enroll from the projects currently under construction.

Downtown multiple dwellings have a negative impact on our school system.

Decatur School Board members have stated that it takes at least a $700,000 single-family home to generate enough local school tax revenue ($7,000) to cover the local cost of one student. For each additional school-aged child living in that house, the education costs have to be covered by other tax payers. The estimated combined value of the six multifamily buildings already occupied in downtown Decatur is $167 million, generating a total of $1.6 million in local school tax revenue each year. The total estimated cost to the school system from local funds for these 45 students is $315,000. That provides the school system with more than $1.2 million per year to be used to educate other children

The Callaway property would be more beneficial to the school system for school expansion.

The Callaway property is a 4.7-acre site that was owned by DeKalb County. As a tax-exempt property, it does not pay property taxes. The City of Decatur worked for 10 years to acquire this property for redevelopment to create new tax revenues to benefit City Schools of Decatur and the City of Decatur. A conservative estimate of the local property taxes of the redeveloped site is more than $400,000 per year, or enough to cover the local tax share for more than 55 students. We continue to work with the developer to increase the amount of office space proposed for the site because there is a growing need for new office space downtown.

Apartment developments will ruin downtown and our community.

 

A similar concern was heard when the downtown condominiums were being developed 15 years ago. A mix of housing choices is necessary to provide options for singles, young professionals and empty nesters who do not want to own property, and is at the core of Smart Growth Principles. Apartment developments are also treated like commercial property. Unlike residential condos, apartments aren’t eligible for homestead exemptions so pay the full tax rate to the city and the school system.  The residents of these new downtown dwelling units, like the residents of the downtown condominiums, will become part of the downtown neighborhood that provides much of the market support for Decatur’s restaurant and retail businesses. They are an important resource in establishing and maintaining a successful community.

We need a plan for downtown development.

We have followed a consistent plan for development in downtown Decatur for the past 30-plus years. Our residents developed the first plan in 1982. It was updated in 1988, in 2000, and again in 2010. In addition, there are design standards in place that were upgraded last year after a year-long public input process. Over the years, the goal has been to encourage a mixed-use downtown community that offers walking, bicycling and transit options with less dependence on automobiles. Downtown Decatur is often used, regionally and nationally, as an example of how to manage planned, quality growth resulting in a vibrant and attractive place to live, work and play. The city works closely with the Atlanta Regional Commission’s Livable Centers Initiative Program to develop regular updates to the plans governing growth in our commercial districts.

We have too much development taking place in downtown Decatur.

Currently 85 percent of our property tax value is generated by single-family homes, leaving only 15 percent from commercial districts. This ratio should be more balanced but there is a very limited inventory of commercially zoned property and a very large number of tax-exempt properties in the downtown commercial district. To better balance the tax digest and reduce the local property tax burden for single-family property taxpayers, existing commercial properties in downtown Decatur and in East Decatur need to be developed at a reasonable density. Without development of commercial property, more of the local tax distribution will be shifted to single-family residential property owners.

Photo courtesy of Jane

46 thoughts on “City Responds to Common Criticisms About Downtown Development”


    1. Not so fast. This is helpful analysis regarding the numbers of students and tax revenue that multfamily residential brings. However, I remain unconvinced that the best use of the Callaway property (not building) is 100% commercial. There is a creative solution for mixed use that includes educational facilities. Develop school facilities along the East and South Sections, which are already adjacent to DHS. Build resi above retail/office along northern and western frontage. An easy solution that addresses multiple issues. The entire main/original 3 – wing section of DHS fits on the eastern third of the property, leaving plenty of room for commercial on the other sections. As student enrollment rises, there will be additional need for athletic and extracurricular programming, as well as classroom space. The south portion of the property, contiguous with DHS is perfect It just seems so obvious. The proposed “second main street” along Trinity can still work.

      *”The City of Decatur worked for 10 years to acquire this property for redevelopment to create new tax revenues to benefit City Schools of Decatur and the City of Decatur. ”

      10 years ago no one predicted that demographic shifts, exacerbated by problems in neighboring school districts would happen so fast. This statement does not carry the weight of facts that other bullets do and does not make this point compelling.

      *”We continue to work with the developer to increase the amount of office space proposed for the site because there is a growing need for new office space downtown.”

      I’m skeptical. What are occupancy or vacancy rates for class B office in downtown Decatur?

      1. New space would likely be considered Class A office. There’s about 1.7 million square feet of Class A and B office space within a one-mile radius of the old courthouse. In 2011 that space was about 15% vacant. Today it is about 7% vacant, which is below the regional average, which is good. In 2015 asking rents and absorption are up. The office market is greatly improved since the end of the recession – in Decatur and around the region.

      2. The city’s point was one of taxable vs. tax-exempt. That’s a key parcel and it needs to be revenue producing. Much of CSD’s space increasing potential from the Calloway site could be accomplished with them leasing converted space from the development. That would keep the property fully on the tax rolls, add to CSD’s menu of options in dealing with space challenges, and not lock us into as many newly built facilities, should enrollment ever peak and then fall off to some degree.

    2. I would also point out that the answer to the first question is based on the impact that six developments over the last 16 years have had and does not appear to take into consideration (beyond whatever the consultants said would “likely occur”):
      1) The impact that the additional six (I think) developments, or 12 developments total, will have on the school system. I find it hard to believe that the consultants can accurately base enrollment projections for the 6 new developments off of 6 previous developments, given the number of variables at play, not the least of which is the plan for a new ELCC next door to public transportation options. For example, I’d pay a tad bit more for a condo/apt if it meant that my child could go to CSD and I could still get to work.
      2) The fact that Dekalb County and Fulton County schools have taken big hits in the last several years, something that buyers will absolutely consider when purchasing a home, whether it be an single family, condominium, or apartment home
      3) Attitudes towards home ownership (house vs. condo/apartment) have changed in the last 16 years, with many young professionals with school-aged children choosing quality of education over size of house.

      For those reasons and others, I’m not convinced that the new developments will only contribute to 2 percent or less student population growth at CSD.

      1. I think you point out something very important here. Future demographics cannot be inferred from the relatively distant past. We need to look at who has moved into multi-family dwellings in the past 12, 24, 36 months to determine what the likely impact of building more apartments & condos is. To say that the future buildings will have a positive financial impact on CSD based upon the current demographic makeup of multi-family dwellings is misleading at best.

        1. “To say that the future buildings will have a positive financial impact on CSD based upon the current demographic makeup of multi-family dwellings is misleading at best.”

          How is it misleading? They can only go by the current numbers to make projections about the future. On the other hand, what you and others are claiming is pure speculation, as there is no evidence to support your beliefs.

          1. I am unsure how you were able to infer my beliefs from my brief comment. Who is moving in is relevant. Who is already there is not. I do not know what the relevant data will show because I have not seen it. The data sited in the story above describes who is already there, not who is moving in.

            1. Sorry if I mistakenly inferred that you believe many more kids are going to move in than are there now, a belief for which there is no evidence.

              1. What I don’t think you get is that we don’t have the relevant data therefore we are not in a position to draw any meaningful conclusion. It would be interesting to see the makeup of the new tenants in the newly developed Place on Ponce. That would tell us much more than anything stated in the city’s response above.

                1. As Scott pointed out, the numbers include current enrollment, which is less than a month old (and would include the first phase of The Place on Ponce). I don’t see how you can get any more relevant than that.

        2. Forward projections might be dubious or misleading if CSD became a hot commodity yesterday. Or if downtown as a place to live was a new phenomenon. But neither is true. CSD has been red hot for years. Surrounding school systems have been experiencing a multitude of scandals or ineptitudes for years. Downtown, despite the gut-punch of the housing crash, has been performing as a desirable place to live for years, offering a variety of both owner occupied and rental options in our existing condo projects.

          Over the course of those years, especially the last 5-10, downtown living has been a viable and attractive option for anyone who wants to get into CSD for less money than a single family home. And now, we have practically up-to-the-minute data on exactly how many students that scenario has produced — down to current enrollments in this school year.

          Are you really suggesting that all of this is unrelated to what we might expect continuing down the exact same path, with the only real difference being the addition of more (and similar) units?

          I agree with Bulldog that various factors do and continue to evolve but that would be true whatever level of data we might have. How could we have better indicators than these in setting realistic expectations?

          1. “And now, we have practically up-to-the-minute data on exactly how many students that scenario has produced — down to current enrollments in this school year.”

            Maybe some would prefer a crystal ball reading…

            “Are you really suggesting that all of this is unrelated to what we might expect continuing down the exact same path, with the only real difference being the addition of more (and similar) units?”

            What does what’s actually happening have to do with anything?

          2. Knowing that there are 45 students registered from the recently built multi-family developments does not tell us what the impact of doubling the number of multi-family units will be at this point in time. We need to know who is moving into units which are turning over. For instance, what if I told you that 50 units turned over in the past 12 months and half of the units which turned over now have a family with school aged children? Would that concern you even if the total number of students registered from these dwellings is only 45? The data as presented is insufficient to support any claim, for or against building further units. As I stated above the most useful data I can think of offhand would be the stats on who has moved into Place on Ponce.

            1. “For instance, what if I told you that 50 units turned over in the past 12 months and half of the units which turned over now have a family with school aged children? ”

              I don’t live here anymore, so no, but if I did, also probably no because it’s too small a sample size. But the point is you can’t tell me that, while the city can tell me how many kids from multifamily are currently enrolled, which is a very recent number and includes the most recently opened units.
              And this is all rather a moot point anyway isn’t it? These developments aren’t going away, so perhaps a better focus would be on keeping seniors and other empty-nesters in their single-family homes, which will almost certainly turn over to being revenue negative if rising taxes cause them to sell.

            2. “The data as presented is insufficient to support any claim, for or against building further units. ”

              Given how very far in the black the current up-to-date numbers are in terms of net revenue provided to CSD by existing units, I’d say that it’s your claim that lacks sufficient support.

          3. “Forward projections might be dubious or misleading if CSD became a hot commodity yesterday. ”

            This is a very good point. The influx of kids is coming from where it has all along: single-family houses.

      2. As Scott has stated before, the bigger concern is the majority of people in single family homes who don’t, or no longer, need the schools. The tax bill is going up, and I can make a lot of money when I sell, no doubt to an eager family with kids. Finger on the trigger . . . More commercial development is essential to better balance the equation, keeping taxes lower and holding onto more people who don’t have kids in the schools.

      3. You can be not convinced all you want, but you don’t have any evidence to support your opinion. The City, at the least, has the current numbers which make a very solid case.

        1. Thanks. The whole point is that current numbers don’t mean much when there are other factors that need to be considered in the projections.

          1. Why do the current numbers not mean much? There is no actual evidence on which such a statement can be based. I’d say they mean a lot, even if there is a modest increase in the number of students that result compared to the very low current numbers.

    3. +1. It’s helpful to see the actual numbers. but common sense alone should have indicated that the multififamily downtown is big-time revenue positive.

  1. None of this changes the fact that I moved here in 1994 and I want Decatur to be just like it was in 1994. That means buh-bye hipsters and craft beer and high achieving demon spawn in our schools. Out with fancy farm-to-table and in with Speros and the Square Table. When people report gunshots in McKoy Park, that better be an honest to goodness Glock and not some kids playing with fireworks. It’s time to tear down the apartments and McMansions and turn back the clocks to when nobody wanted to live here. Who’s with me? I’ll meet you at the Grog Shop!

    1. well said, but 1994 was the start of the decline (not that your arrival had anything to do with that). 1992 was Old Decatur’s golden era — when we moved to Winnona Park, I was told repeatedly that was “on the wrong side of the tracks” and we were broken into enough that I almost came to believe it.

      after drinks at the Grog Shop, dinner at Moghul Salute is on me

    1. Can you clarify what you’re getting at? Those costs are borne by the developer in the course of meeting the requirements of the development code. A percentage of green space is required, per development. Water quality (assuming you’re referring to absorption, etc.) will, at worst, perform equally to the surface parking lot being replaced and, at best, be considerably improved through new infrastructure. And fire, assuming you mean the capacity of DFD to meet needs, is not an issue. Nothing is built in Decatur, or has been, that’s beyond the fire department’s present inventory of equipment and personnel.

  2. Again, it is the tax payers in Decatur who have no children in the school system who are being burdend without any consideration. The CDS budget has more fat in it than the Feds. Older citizens who invested in Decatur prior to exploding the schools are being driven out.

    The increased tax digest should have an improved decrease in the tax burder for over all homes in decatur given the projected property values. This savings is not being adjusted back to the tax digest.

    There is some over runs and lack of efficency . This is what Dekalb County still has issues with. I would like to think Decatur has observed what happens in that arena.

    1. As I understand it, millage rates went down for both CSD and City and are to go lower in 2016.

      So far as the ‘fat’ and over-runs you allude to in CSD, I am curious what data supports that claim. Can you help me out?

      1. The millage rate did go down, but less than the increase in tax revenue due to increase in home values. This was therefore a net revenue increase for the City.

        If millage is expected to decline again in 2016, how much will this offset the proposed GO bond increase?

  3. 7,000 to cover the cost of one student per year (per CSD).
    $75,000,000 bond divided by $7,000 = 10,714 students for 1 year or approximately 2,143 students for 5 years
    —————-
    Currently, 4,658 students. 6,527 students predicted for 2020 (per CSD).
    From the info provided:

    “Currently 85 percent of our property tax value is generated by single-family homes, leaving only 15 percent from commercial districts.”

    Therefore, 15% of property tax value is not single-family homes –
    “The estimated combined value of the six multifamily buildings (641 units) already occupied in downtown Decatur is $167 million, generating a total of $1.6 million in local school tax revenue each year.” No data for condos/town homes.
    15% = 167 million from 641 units, resulting in 1.6 million for schools or $2,496 for schools per unit
    85% (single family homes; majority w/out CSD students) = 946 million?, resulting in 9.06 million for schools?

    So currently, 1.6 million (multifamily buildings/apartments) + 9.06 million (sfh) = $10,660,000 revenue for schools? $10,660,000 divided by $7,000 per year for each student = 1,522 students provided for with property taxes per year, but there are currently 4,658 students?

    New apartments if Callaway approved equals 1,834 units. If 641 units (currently) = 1.6 million for schools then a rough estimate of the of the new apartments would be roughly 4.58 million generated for schools? So the new apartments would provide revenue for approximately 654 students using the current ratios. The unknowns being the number of bedrooms for the new apartments vs. current apartments and also the number of possible students?

    1. Marty – just to clarify – the $75 M GO Bond is not for operating costs for CSD. The Bond is a capital raise to fund investment in infrastructure to build more capacity.

  4. Understood. Hope there will continue to be a healthy discussion moving forward including growth projections in relation to impact on operating costs.

  5. There is a FATAL FLAW in this analysis. The majority of the units already built are condos. They were also uniquely marketed, for the most part, as empty nester developments. Decatur was popular, but it wasn’t totally trendy. Yes the schools have always been good, but as others have stated, there wasn’t major education upheaval in Dekalb and APS at the time those units came to market.

    Now there is an appetite for CSD that is greater than it has been in quote some time. I cannot tell you how many times recently I’ve had parents w/ school-aged children ask me about renting in Decatur since the costs is so high to purchase.

    1. But we have stats (really just one data point) that say there is a huge pent up demand for rentals by single folks and childless couples in COD. The stats (one data point) are so bullet proof we should not think about it any further and build right away. There is no way possible the new apartments could have more kids than the older apartments and condominiums. No way I tell you!!

      1. Which one data point are you referring to: the multiple condo units available for rent at any given time over the past 5-10 years; the 1.2 million dollars in post-service delivery, net revenue that has flowed directly from downtown residences to our schools; the 16 years in which our downtown housing experiment has been underway; or the 45 students spread across 641 units that have emerged in that time, comprising 2% of CSD’s enrollment growth?

        No one is saying new apartments won’t have some students. The theme of this thread is that there is no evidence, other than fear of people with different priorities, to suggest that any uptick will be so dramatic as to offset the, in my opinion, irrefutable financial benefit that the schools presently receive as a result of our downtown housing.

        I challenge anyone who wants to somehow prevent the legal and entitled development of downtown property to articulate an alternate path forward. The one I see is making up the lost revenue on the backs of homeowners, but I’m sure you have a different plan.

        1. We have 45 students from 641 units. That is one data point. Do you see another? I don’t see data from rented condos in the past x months. Do you? I don’t see data which details the number of children in Place on Ponce. I see one single data point which does not paint the whole picture. No one is challenging anything. However it would be good to have a complete picture painted before it is too late. Contrary to some pre-conceived notions I like the increasing density of downtown but I do believe we should plan for the effect it could have on the CSD.

          1. The other data point is the huge surplus those 641 units provide in revenue to CSD. It would take a dramatic change in the make-up of those units and the new ones to change that ratio significantly. No real evidence to indicate that will happen.

            1. I’m sorry but that is not an additional data point. It is simply an extrapolation from the single data pint provided. Is more information in some way threatening or harmful in your opinion?

        2. “I challenge anyone who wants to somehow prevent the legal and entitled development of downtown property to articulate an alternate path forward. The one I see is making up the lost revenue on the backs of homeowners, but I’m sure you have a different plan.”

          With that, I believe you can drop the mic and walk off stage 😉

        3. Scott, if they wanted to provide a more accurate data point, it would be the number of bedrooms in the current multi family untis of CSD kids. The you come up w/ a % of that unit w/ kids. Project that out against the number of bedrrooms coming on market. Not 100% accurate, but a little more acurate re: trying to gauge demand.

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